In recent years, the illicit drug trade in Southeast Asia is becoming more integrated within the region as well as with the wider Asia Pacific region. With a well-greased supply chain to meet an ever-increasing demand, criminals are turning the regional drug trade into an underground economy that can rival the GDP of some small countries. By Lee Kok Leong, executive editor, Maritime Fairtrade
Southeast Asia’s illicit drug trade has grown to be one of the biggest in the world, helped in part by a steep increase in the manufacture of synthetic drugs, especially methamphetamine, which have reached countries as far as Japan, South Korea, Australia and New Zealand, where they account for about one-third of the total value of the meth market because of the high retail price.
Nevertheless, traditional opiates still remain a problem and the value is estimated at around US$10 billion annually. So, together with synthetic drugs, the total illicit drug market is worth a staggering US$71 billion annually.
At the same time, the many casinos spread around the region, particularly in Cambodia, Myanmar, Lao and the Philippines where there is a lack of regulatory oversight, are acting as a conduit to launder drug money.
While some countries in the region have robust law enforcement and border management, others are lax, and are affected by corruption, bureaucratic loopholes and limited cross-border cooperation. So, as with any other businesses, drug cartels will always seek out conditions that increase profitability, while minimizing risk and cost.
With regards to a relatively safe and reliable supply chain, they rely heavily on legal trade to camouflage their illegal activities, sometimes by mis-declaring the content and country of origin and embedding the drugs in legal cargo.
In recent years, most of the drugs ride on the same infrastructure and routes as legitimate trade, in part because of freer movement of people and goods facilitated by more regional free trade agreements and connectivity initiatives that aimed to boost economic growth.
However, some drugs are still smuggled clandestinely across borders through unofficial seaports or along jungle tracks, the same routes that were once used by criminals hauling opium and heroin on mules through the jungles of the Golden Triangle.
Joining the dots
Originally, there was a number of drug cartels operating in neighboring China but with heavy suppression from the authority, they have been forced to migrate into Shan State in Northeastern Myanmar.
Drug cartels operating in Myanmar are in partnership with the local militia and armed ethnic groups, where presumably, protection and safe passage are given to the manufacturing and trafficking activities in areas they controlled. In return, the cartels provide capital and access to overseas drug markets.
According to intelligence reports, many of these cartels, including the financiers, originated outside of the region and are based in Macau, Hong Kong, China, and Thailand with chemists coming from Taiwan.
Effectively, Myanmar, where there is a lack of both government’s will to take on major drug groups and serious commitment against money laundering, has become one of the world’s largest producers of synthetic drugs, which are trafficked throughout the region, including East Asia, South Asia and as far afield as Australia and New Zealand. Chemical precursors, vital to the production of synthetic drugs, are mainly sourced from China and India.
Myanmar is also the world’s second largest producer of illicit opium with an estimated poppy cultivation totaling 41,000 hectares in 2017, a decrease of 25 percent from the last survey in 2015. Shan State is the source of 91 percent of Myanmar’s poppy cultivation.
The drug cartels’ transnational tentacles
Drugs produced in Myanmar are smuggled into China, Thailand, Lao, Malaysia, Bangladesh, Cambodia and Vietnam using overland routes. There are indications that from Rakhine State in western Myanmar, drug shipments are transported using maritime route via the Andaman Sea to central and southern Thailand.
For countries further away like Indonesia, the Philippines, South Korea, Japan, Australia and New Zealand, air transport with couriers hiding drugs in carry-ons or checked-in luggage is used by the narcotrafficking groups.
However, given the almost universal restrictions imposed on air traffic because of the pandemic, air transport may be completely disrupted for the traffickers. Be that as it may, the pandemic did not seem to put a dent in the lucrative drug trade, as evidenced by the biggest drug bust in the history of Southeast Asia in Myanmar between February and April 2019 and the ensuing low street prices.
Given the enormity of the drug market profits and far-reaching implications to all the nefarious players, the opportunistic narcotrafficking groups are probably adapting quickly to changing market conditions and finding ways around the disrupted air trafficking. It would not be a surprise if they have already shifted to using more of the other modes of trafficking such as maritime transport and postal system.
Also, for synthetic drugs like meth, as it is relatively easy to produce in a lab and do not depend on land mass and seasonal harvest, if the disruption to the existing supply chain is getting more severe, then there is a possibility that production will move in-country to service the domestic market to avoid cross-border activities.
The exploitation of human weaknesses
The drug trade could not survive, let alone thrive, without significant levels of corruption that is more likely than not the key to facilitate the illegal movement of drugs at any stage in the supply chain.
Border checkpoints appear to be the most vulnerable to corruption, which can include corrupted officials passing information about patrol routes or customs inspections, assisting in the safe passage of shipments, omitting inspections and clearing them for entry, among others. In certain parts of Southeast Asia, the practice of bribery has become so entrenched that it is considered business as usual.
Sometimes, on top of corruption, criminals can compromise law enforcement, public agencies and even private companies, if need be, through blackmail, entrapment, coercion and violence in order to carry out their illegal activities.
They exploit human weaknesses and manipulating corruptible individuals to their advantage, knowing full well that the cost of failure is high, because in many Southeast Asian countries, the punishment for drug trafficking is the death penalty.