(Bloomberg) -- Transnational crime syndicates are raking in tens of billions of dollars a year selling everything from drugs to counterfeit goods as cartels outpace law enforcement to expand their influence across Southeast Asia, the United Nations has found.
Major crime groups operating in the region -- some based in Macau, China and Hong Kong -- have achieved "unprecedented influence" working in tandem with corrupt government officials and private enterprises, according to a new United Nations Office on Drugs and Crime report released Thursday.
“Profits have expanded and illicit money is increasingly moving through the regional casino industry and other large cash flow businesses,” Regional Representative Jeremy Douglas said in a statement. "While law enforcement and border management in the region are robust in some jurisdictions, they are effectively not functioning in others, and limited cross-border cooperation and corruption are serious problems."
The most profitable illicit business in the region is the sale of synthetic drugs like methamphetamine, an industry now worth $61.4 billion annually, or slightly less than the total gross domestic product of Myanmar, up from $15 billion in the UN's 2013 report. The heroine trade meanwhile is valued at up to $10.3 billion per annum.
The surge in illegal drug sales appears to have been driven by the displacement of crime groups from China to northern Myanmar where "massive amounts of synthetic drugs, in particular methamphetamine, have been increasingly produced and trafficked," the report said.
Seizures Rise
But with drug sales up, so are seizures. From 2014 to 2018, the number of methamphetamine seizures in Laos, Myanmar and Cambodia have increased 925%, 870% and 700% respectively. According to preliminary figures, drug seizures throughout Southeast Asia for 2017 and 2018 together topped 200 tons, an all-time high, the UN said in the report.
"Southeast Asia has an organized crime problem, and it is time to coalesce around solutions to address the conditions that have allowed illicit businesses to grow, and to secure and cooperate along borders,” the UN's Douglas said.
Aside from drugs, crime groups are now also profiting from the sale of counterfeit goods including illicit tobacco, automobile parts, handbags and alcohol -- an industry that generates up to $35.9 billion annually, while falsified medicines are generating as much as $2.6 billion per year, the report found.
The trafficking of women and girls for sexual exploitation also "remains a serious problem in most countries in the region," said the report. With around half a million migrants estimated to be smuggled to Thailand each year, annual revenues are believed to be as much as $196 million.
"A lot of Asean is made up of weak states that really can't govern," said Carl Thayer, emeritus professor at the University of New South Wales and an expert in Southeast Asia security. "You have got to have officials that are absolutely not corrupt, and that's just on the front line."
To contact the reporter on this story: Philip J. Heijmans in Singapore at pheijmans1@bloomberg.net
To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Subramaniam Sharma
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