Shwe Kokko: How Myanmar’s Crime Hub is Destabilizing the Region 

By Aung Zaw 27 February 2023

Myanmar’s military coup in 2021 has triggered a widespread humanitarian crisis but also a breakdown in the rule of law. And the security situation is getting worse by the week. With the rise of lawlessness, the coup has provided freedom for cyber-criminals, human traffickers and gunrunners to operate along the border with Thailand. In the city of Shwe Kokko, Karen State opposite Thailand’s Mae Sot, Chinese triad gangs and criminals are exploiting the turmoil following the military takeover to expand their criminal activities.

Shwe Kokko, just north of Mae Sot, is notorious as a criminal hub for online gambling, scamming and trafficking.

The city is also known as Myanmar’s Silicon Valley, but since the coup its high-tech expertise and infrastructure has been geared to transnational criminal activity. Among the victims are foreigners lured to the city by offers of high-paying jobs in Thailand.

Last year, Filipinos, Malaysians, Indonesians, Indians, Thais, Taiwanese, Bangladeshis, Brazilians, Kenyans, Colombians and Hong Kongers traveled to Thailand on the promise of jobs, only to find themselves trafficked across the border to Shwe Kokko.

Just 20 kilometers south is KK Park, also known as KK Garden, which recently made headlines as a trafficking hub for Malaysian and Indian victims.

The victims in Shwe Kokko and KK Park are imprisoned and coerced to work for crime syndicates as online scammers. Those who refuse face physical punishment or even worse forms of abuse. Families of the victims have been asked to pay ransoms in exchange for the release of loved ones.

Three Taiwanese are arrested in August 2022 after arriving back in Taiwan from Myanmar’s KK
Park where they were allegedly part of a telecom extortion gang. / CIB

Embassies in Bangkok have been busy rescuing their citizens from Shwe Kokko. In diplomatic circles of the Thai capital, the name Shwe Kokko has now supplanted Myanmar’s democratic icon Daw Aung San Suu Kyi, who languishes in a junta jail after her government was ousted in the February 2021 coup. The city is making headlines in regional newspapers as a hive of scams, abduction, and human trafficking, with governments increasingly under pressure to respond to emergency appeals from families and victims.

Shwe Kokko is under the control of the Karen State Border Guard Force (BGF) led by Colonel Saw Chit Thu, a Karen insurgent leader. Several years ago, he signed a ceasefire with Myanmar’s army that saw his breakaway Democratic Karen Buddhist Army rebadged as the Karen BGF under partial command of the military.

Border Guard Force chief Colonel Saw Chit Thu at a celebration to mark the BGF’s 9th
anniversary at Shwe Kokko on August 20, 2019. / The Irrawaddy

In the mid-1990s, Karen insurgents fought fierce battles with Myanmar armed forces around Shwe Kokko – an area known then as Kawmoora. The Kawmoora battleground was notorious among both Myanmar citizens and foreign journalists who arrived to cover the fighting between Karen rebels and state forces.

Few could have imagined this war-torn stretch of border would come under the control of a Karen breakaway group, which brokered peace and business deals with Myanmar’s military and invited massive investment by the Chinese underworld. These days, the regime in Naypyitaw is merely a sideshow in what could be dubbed Myanmar’s Special Criminal Zone.

In 2017, Saw Chit Thu formed a joint venture with Yatai International, owned by She Zhijiang, a Chinese national who holds Cambodian citizenship.

The result was the Karen BGF’s Chit Linn Myaing Co Ltd, the front for Chinese investment to develop a $15-billion special economic zone (SEZ) in Shwe Kokko. The project was portrayed as a high-tech hub with an airport, industrial zone, villas, amusement park, hotels and other facilities.

A Chinese-backed hotel in Shwe Kokko. / The Irrawaddy

Once a fly-blown village of cattle smugglers and Karen BGF, Shwe Kokko transformed into the Chinatown of Karen State as Chinese investors, workers and gamblers flocked to the area. She Zhijiang was also responsible for turning it into a criminal hub for online gambling and scams.

In 2018, the Myanmar Investment Commission approved a first phase of the Shwe Kokko New City project: the $22.5-million construction of 59 luxury villas on 10.3 hectares. However, construction activity expanded well beyond those limits. Mae Sot, a sleepy town in the 2000s, transformed into a bustling city peppered with luxury vehicles, upscale restaurants and hotels, with flights from Bangkok mostly fully booked.

The developers initially claimed Shwe Kokko New City was part of China’s Belt and Road Initiative (BRI), but Beijing disavowed the project after it was investigated by Daw Aung San Suu Kyi’s government.

In 2020, the Chinese embassy in Yangon backed the government’s move to probe irregularities surrounding the controversial city development project in Karen State. Thailand shut off power and telecoms services to Shwe Kokko. However, power and Internet service were switched back on just weeks after the 2021 coup.

Chinese nationals continued to flow into Mae Sot. Among them was She Zhijiang, who is a fugitive in China but holds a Cambodian passport after investing in casinos there. She, also known as Dylan She, is chairman of Yatai International Holding Group.

She Zhijiang (center) and his team arrive at Shwe Kokko to attend an event marking the ninth
anniversary of the Border Guard Force on Aug. 20, 2019. / The Irrawaddy

Thai authorities arrested the billionaire fugitive tycoon in August 2022 for running illegal online gambling platforms, but Yatai said the arrest would not affect its business operations. Thousands of Chinese illegal immigrants continue to live in Shwe Kokko and the city’s online gambling venues are still busy.

The Myanmar military issues licenses for its allies and cronies to run hotels, clubs and casinos in towns on the border with Thailand and China. The operators pay annual fees to the military.

Among them is Myanmar crony businessman Tun Min Latt, an arms broker and drug trafficker who was arrested in Bangkok last year and has direct connections with top generals including junta boss Min Aung Hlaing and his family.

Tun Min Latt runs the Star Sapphire Group and operates several hotels and casinos in the border town of Tachilek, northern Shan State. His Allure Resort offers a casino, shopping and other entertainments for Thai and Chinese gamblers.

Tun Min Latt’s deep connections with high-ranking generals including Min Aung Hlaing give him freedom to run lucrative and illicit business along the border. His company pays annual fees to the military while he has also provided a considerable sum of money to the regime leader and his family. Junta leaders are reportedly trying to secure his release from detention in Thailand.

Several transnational Chinese criminal gangs operate hotels and casinos in the northern Shan State borderlands, also known as the Golden Triangle. Their local partners include the border guard forces and other militia and insurgent groups. The irony is they emerged after the coup “strengthened and with new opportunities to generate illicit income”, according to the United States Institute of Peace USIP.

How much tax revenue flows into the regime’s coffers from Shwe Kokko is not known. However, revenue received from criminals in the border city boosts the junta’s ability to purchase arms to suppress its own people.

New casino projects have mushroomed along the border in Karen State since the coup.

Meanwhile the regime has been condemned for mass killings and arbitrary arrests of opponents that amount to crimes against humanity. This criminal campaign extends from the heartlands to the ethnic border regions, so it is unrealistic to expect the regime to clamp down on transnational crime.

In fact, Chinese criminal tycoons are thought to have reached deals with Naypyitaw top brass involving substantial kickbacks. The military regime uses its control over the contested Karen territory to milk the area for revenues.

Elsewhere, it continues to loot citizens’ homes, shoot children, torture dissidents to death, torch villages, and bomb resistance forces and civilians with fighter jets.

The coup has triggered serious instability beyond the border regions, bringing an exodus of people, economic collapse, human tragedy and security concerns for neighbors.

Myanmar’s home-grown criminals are sitting in Naypyitaw. Meanwhile, transnational Chinese gangs are free to operate on the Myanmar-Thailand border, posing a serious security threat to the region.

It is time for governments of countries who share borders with Myanmar, including China, India and Thailand, to look into this matter more closely since criminal activities in Shwe Kokko and other casino hubs are directly linked to the junta in Naypyitaw. Criminals in Myanmar should not go unchecked – they pose a serious threat to countries across the region.