Myanmar job scam and India's strategic interests

A Chinese-backed scam city along the Myanmar-Thailand border shows that the Myanmar military is no friend of India and Indians

On October 5, Arindam Bagchi, spokesperson for Indian External Affairs Ministry, tweeted that 45 Indians "trapped in fake job rackets in Myanmar" had been rescued with help from the Indian embassies in Yangon and Bangkok.

Earlier in September, the ministry had said over 150 Indians were trapped in Myanmar's Myawaddy township, right across the Thai-Myanmar border. It also issued an advisory, warning Indians to be wary of advertisements posted on social media by "dubious IT firms involved in (a) call-centre scam and cryptocurrency fraud" based in, among other countries, Myanmar.

Reports on the case published in the Indian media provide sparse details. Prima facie, the abductees, most of whom are from Tamil Nadu, are being held under duress by illegal Chinese companies in the Shwe Kokko area of Myawaddy district, which lies in eastern Myanmar's Karen State.

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Most of them were flown into Thailand by firms based elsewhere, such as Dubai, and then ferried into Myanmar. Testimonies of those rescued have further revealed that these scam hubs inside Burmese territory are protected by high border walls and monitored by armed guards who often physically torture them.

One rescued individual revealed that the illegal firms are run by "rebel Myanmar groups". A deeper look, however, shows that this may not be correct. The illegal scamming firms in the Shwe Kokko village, which sits along the Thaung Yin River dividing Myanmar and Thailand, are part of an expanding Sino-centric network of "black zones" across Southeast Asia, especially the Mekong region, that have cropped up in tandem with China's Belt and Road Initiative (BRI). While Beijing has categorically
distanced itself from these fraud ventures, it has done little to stop them from proliferating.

In Shwe Kokko, this underground ecosystem has taken the form of what is known as the 'Yatai New City' – a misnomer for a shady city dotted with casinos that act as fronts for digital scamming rackets. Consider it to be Myanmar's own Jamtara. But who really is behind this fraud city? The so-called US$15 billion "smart city" is being developed by the Bangkok-based, Hong Kong-registered Yatai International Holding Group Limited. Notably, the primary contractor for the project is MCC International Incorporation Limited, a subsidiary of the Chinese State-Owned Enterprise (SOE), China Minmetals Corporation.

Behind this sprawling shadow empire, which also has a presence in Cambodia, is an elusive Chinese expatriate businessman named She Zhijiang. Once the chairman of the Yatai group, he was arrested by Thai police in Bangkok in August. Where it gets even more interesting is the project's local partner.

The Shwe Kokko city is a joint venture between Yatai and something called the 'Myanmar Yatai Shwe Kokko Special Economic Zone' – a commercial venture led by Colonel Saw Chit Thu, the influential leader of the Karen Border Guard Force (K-BGF).

The K-BGF, once known as the Democratic Karen Buddhist Army (DKBA), is a pro-military force that broke away from the anti-military ethnic armed organisation, Karen National Union (KNU), in 1994 and formally came under the military with its new name in 2010.

Officially, the K-BGF is mandated to monitor the Thai-Myanmar border in Karen State and generally assist the country's military in the area. But, in 2020, a spokesperson for the militia confirmed to Frontier Myanmar that they also provide security to the Shwe Kokko' new city'. Thus, it is the BGF – not "rebel armies" – that the rescued Indian abductees referred to when talking about "gunmen" guarding and even abusing them.

For all practical purposes, Colonel Thu operates like a local warlord with tight control over a sprawling casino city. Naturally, for this militia boss and his troops, Shwe Kokko is a golden goose. Earlier, the Myanmar military had begun to close in on his mafia-dom due to competing illicit interests.

However, after the coup, the junta is simply looking away from the K-BGF's dubious undertakings in exchange for complete loyalty in its war against ethnic rebels like the KNU – a fact confirmed by the International Crisis Group in a January 2022 report.

This is what the Myanmar military, which snatched power from the elected civilian government in a coup last year, is doing on the other porous border – the one with India in the country's northwest. In return for combat assistance in fighting anti-junta militias in Sagaing Region and Chin State, the junta provides haven and logistical support to Manipuri insurgent groups who continue to wage war against India. Here are the two moot points: one, a militia directly affiliated with the Myanmar military is running a scam racket that is entrapping young Indians as bonded labourers; and two, the Myanmar military continues to act in ways that are directly inimical to the interests and security of India and Indians along both the western and eastern Burmese borders.

India should not ignore these emerging realities and reconsider its linear engagement with the military regime next door. For New Delhi, an elected civilian government committed to administrative transparency and accountability is the best bet in Myanmar.

In fact, in 2020, the deposed Aung San Suu Kyi-led government formed a tribunal to investigate irregularities in the Yatai project in Shwe Kokko. But, once the military took over, the Chinese-funded Myawaddy mafia-dom instantly sprang back.

This itself should tell India who among the junta and the civilian government it should wager its support on today. The military in Myanmar is an unprofessional, unpopular, unreliable, and self-serving actor that harbours a web of illegitimate predatory interests.

It will always prioritise preserving these profit-making enterprises over protecting Indian interests. On the other hand, the civilian government, currently organised under the National Unity Government (NUG), is popular, professional, reliable and more amenable to constructive government-to-government partnerships. Thus, only a civilian partner in Myanmar can protect and advance Indian interests in this important neighbourhood country.

(Angshuman Choudhury is an Associate Fellow at the Centre for Policy Research, New Delhi)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.