"Will Laos' economic zones boost growth or bring in criminals" 10 October 2023

“The town belongs to them,” Lae said, referring to the Chinese investors running a special economic zone (SEZ) at the train’s final stop, where she was visiting a childhood friend for the day. “Boten is famous for child trafficking,” her daughter Ellie warned. “They take young Lao girls to China.”

The Boten SEZ, nestled next to China’s Yunnan province, has cycled through periods of boom and bust over the past two decades, enjoying a heady period in the late 2000s as a lawless casino town before Chinese authorities forced its closure...

Today, with its location on Laos’ new China-funded $5.9 billion railway, investors are seeking to reinvent the town...Experts, however, say the project is built on shaky economic foundations and vulnerable to another criminal pivot...

It’s one of several Chinese-run SEZs carved out of the landlocked country’s borderlands, some of which have earned reputations for unchecked criminality...

With the Laotian government unable, or unwilling, to control what occurs inside some of its SEZs, concern is growing about their role in facilitating transnational crimes like money laundering, drug trafficking and online scams

Boten was designated an SEZ in 2003, with Chinese businessman Huang Minxuan handed a 30-year lease for a $500 million development centered around the Boten Golden City casino...The zone’s developer, the Yunnan-based Hai Cheng Group, says it will invest $10 billion to turn Boten into acity of 300,000 people. That vision is a long way off...

“Given theeconomic changes post-pandemic, given the slowdownin the Chinese economy, I don’t see how Boten is goingto be successful unless it starts veering towards illicitbusinesses.” said ButJason Tower, an expert on transnational crime andsecurity issues in Southeast Asia...

The same question was asked of the Golden Triangle SEZ when it was carved out of the jungle in Laos’ remote Bokeo province in 2007. The zone is 20%-owned by the Laotian government and 80%-owned by the Kings Romans Group, a Hong Kongregistered company headed by gambling kingpin Zhao Wei.

In 2018, the U.S. Treasury Department sanctioned Zhao Wei’s business, calling it the “Zhao Wei Transnational Criminal Organization,” for “drug trafficking, human trafficking, money laundering, bribery and wildlife trafficking” within the Golden Triangle SEZ...

In the south, how the Sithandone SEZ’s economy willtake shape remains to be seen. One way it could turn aprofit is online gambling.

Last year, the Lao Offshore Gaming Authority (LOGA)was awarded a license by the national government toattract online gambling companies to the country. Thescheme is modeled on the Philippines’ system of POGOs(Philippine Offshore Gaming Operators)...POGOs have also been linkedto human trafficking, forced labor and scams, and movesby legislators to ban them are gathering pace...