Is ASEAN Ignoring the Grey Border Crisis?

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Thailand’s decision to cut electricity, internet signals, and halt fuel sales to Myawaddy has exposed long-hidden issues such as online scams, human trafficking, drug trade, migrant labor, and illegal immigration. These are not just bilateral problems between Thailand and its neighbors but involve the expansion of transnational illicit market businesses and China’s active role in addressing these matters within ASEAN has led to questions about how the situation has evolved, impacting regional security and economic stability while also drawing attention from external stakeholders and challenging the principle of ASEAN Centrality.

The United Nations Office on Drugs and Crime (UNODC) estimated that in 2023, cyber scams caused losses of approximately USD 18-37 billion in East and Southeast Asia. This has turned the region into a hub for underground economies and money laundering, positioning it as a global center for transnational crime.

According to the United States Institute of Peace (USIP), transnational crime in Myanmar, Laos, and Cambodia has expanded since before the COVID-19 pandemic. Criminal networks exploited development gaps in Special Economic Zones (SEZs), such as Shwe Kokko, by falsely promoting their operations as part of China’s Belt and Road Initiative (BRI). These zones were planned as online gambling centers, attracting gamblers, tourists, and Chinese workers, with potential annual revenues of up to USD 145 billion.

When border lockdowns during COVID-19 disrupted these plans, transnational criminal groups shifted tactics by luring workers with high-paying IT job advertisements in Thailand. In Cambodia alone, an estimated 50,000 to 100,000 people worldwide were deceived and forced into illegal activities, with the situation in Myanmar possibly worse.

ASEAN’s infrastructure development—transportation, telecommunications, internet networks, and border trade facilities—has been exploited by transnational criminal organizations. The lack of effective government oversight, economic demand, and targeted industry investment has left economic gaps along borders. These gaps have been filled by grey-market businesses using SEZ casinos, hotels, and real estate as centers for underground economies. In 2024, over 400 online gambling companies operated in the Philippines, some near U.S. military bases in Manila. Many of these operations were shut down by the Philippine government, reflecting both the expanding influence of these networks in ASEAN and the authorities’ efforts to curb their activities.

Transnational crime networks have further diversified into Malware, Generative AI, and Deepfake operations, using Digital currencies for sophisticated money laundering. ASEAN governments have struggled to enforce laws, prosecute offenders, and trace financial routes to compensate victims.

The UNODC noted that these criminal groups exploit legal enforcement loopholes, targeting inaccessible areas or regions under armed groups’ influence, where state authority is weak. Such conditions make it easy to negotiate benefits with local power.. These organizations persistently relocate assets and extend their influence across borders, challenging government border management.

The key question remains: How did ASEAN allow this crisis to reach such a critical point? At last year’s ASEAN meeting hosted by Laos, progress was reported on developing the ASEAN Border Management Roadmap under the ASEAN Ministerial Meeting on Transnational Crime (AMMTC). The roadmap includes five main action areas:

1. Information sharing and coordination
2. Border management and control standard development
3. Capacity building and cooperation among relevant agencies
4. Joint law enforcement against transnational crime
5. Technological advancement in border management

However, these remain plans on paper, with no joint ASEAN operations officially underway.

While ASEAN has made strides in regional connectivity and trade facilitation, it lacks comprehensive measures to address negative impacts. There is also a lack of strong political will to prioritize this as an urgent regional issue. Criminal networks in Shwe Kokko are expected to relocate within ASEAN, much like after the crackdown in Sihanoukville, which left behind empty buildings.

Current solutions—isolated national actions or bilateral measures—fail to present a unified ASEAN response. This vacuum has allowed external actors to gain influence in ASEAN’s border regions, undermining the bloc’s long-term centrality and cohesion.

Author:
Mr. Khobtham Neelapaichit
Senior Researcher
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 38 Issue: 12846
Date: Wednesday, Feb. 26, 2025
Page: 8 (bottom-right)
Column: “Asean Insight”