The new Myanmar casino town posing as part of China’s Belt and Road Initiative

Karen News / YouTube

The Shwe Kokko development on the Thai-Myanmar border faces a cloud of controversy over land grabs, illegal activity, gambling and local indigenous opposition to the project.

Editorial

“20,000 acres of huge Safari World.” “Immense bougainvillea base.” “International firearms training center.” The plans touted by the Shwe Kokko development project, an economic zone and gambling center under construction in rural eastern Myanmar, make for bizarre reading.

In 2018, the Myanmar Investment Commission approved a US$22.5 million investment for the construction of 59 “high-end villas” on 10.3 hectares of land along the Thai border in Karen state, near the town of Myawaddy. The investment is backed by the Chinese, Hong Kong-registered company Yatai International and located on land controlled by a local government-backed militia, the Karen Border Guard Force (BGF).

But since then, the scale of construction at Shwe Kokko has expanded dramatically. In a document circulated in early 2019 as well as an earlier promotional video, Yatai International claimed the project will cover 12,000 hectares and that it has a US$15 billion budget, with plans for casinos, a 1,200-room hotel, high-end housing, supermarkets, an airport and a police station as well as an industrial estate and cargo depots. Some of the plans have already fallen apart—the airport, for one, would be too close to Thailand’s Mae Sot airport.

The company has also worked hard to associate the project with Beijing’s Belt and Road Initiative (BRI), the multi-continent infrastructure and development plan now central to China’s foreign policy. Private firms are allowed to link their projects to the plan but neither Myanmar nor Chinese officials have mentioned Shwe Kokko in relation to the BRI. Instead, some analysts and civil society say Yatai International has misled the public into thinking the development is backed by the Chinese government.

Shwe Kokko’s existence is predicated on the space between states—transforming a tract of land on the Myanmar side of the Thai border, but controlled by neither government. The land was controlled by the Karen National Union (KNU), a Karen ethnic armed group seeking its own state, until it was taken by the BGF and the Myanmar military.

As the project moves ahead, it has drawn intense criticism for its lack of transparency and apparent disregard for the law, including from local ethnic Karen groups. The government hasn’t approved any development beyond the initial 59 “high-end villas” and hasn’t given permission for casinos at the site.

Photo: Karen News / YouTube

In late 2019, the Karen BGF said construction was suspended and the project was on hold due to violations of investment regulations, but recent reporting by Frontier Myanmar and others shows work continues. In June, the Myanmar government formed a tribunal to investigate the Shwe Kokko project.

Land grabs and military-approved profiteering

Karen civil society groups have condemned the project’s confiscation of indigenous land. According to a report published by the Karen Peace Support Network in March, entitled Gambling Away Our Lands, the development “will serve only the interests of transnational gambling mafias and Burma’s ruling military.”

“We want to decide what types of development will benefit our people and our communities—they have to be sustainable and reflect our social values,” Naw Wah Ku Shee, a spokesperson for Karen Peace Support Network, told Karen News.

Karen civil society and other groups have emphasized that the project can only have progressed this far with the approval of the Myanmar military.

“There can be little doubt that before proceeding, the investors reached an agreement with Naypyidaw top brass, involving substantial kickbacks,” the recent report read. “For Burma army leaders, the project is a win-win: cementing control of this contested Karen territory, while gaining huge financial rewards.”

Though it’s difficult to find proof that the military’s generals are profiting directly, the need for transparency is real and there is plenty of damning evidence already, against both Yatai International and the Karen BGF.

The company implementing the project, Myanmar Yatai International, is a joint venture backed by Yatai International (80%) and Chit Lin Myaing Company (20%), a local firm tied to BGF chief Colonel Saw Chit Thu, with former BGF colonel Saw Min Min Oo as director.

The Karen BGF was formed by a group of soldiers who broke off from the KNU in 1994. In 2010, the group officially joined the Myanmar military’s border guard force program, an initiative that allowed a number of smaller ethnic armed groups to become state-backed militias.

The fact that the project is in Karen BGF territory—their headquarters are in the village of Shwe Kokko—has made transparency increasingly difficult. Earlier this year, two journalists were detained while photographing casino development in the area.

As U Sein Bo, a lawmaker from Myawaddy, told The Irrawaddy, “The locals are complaining about the casinos all the time. But, it is under the control of the Border Guard Force. For me… it is difficult to check with my own eyes.”

An unwelcome international gambling hub

Gambling appears to be central to the project, despite the lack of government approval.

“Casinos business are not allowed so far in Shwe Kokko. Let me be clear about this: we have not allowed any gambling activities in that area officially,” Union Government Office Deputy Minister U Tin Myint said in June.

Last year, with construction still ramping up, at least three casinos at Shwe Kokko began operation.

According to a recent report by Frontier Myanmar, Yatai International chair She Zhijiang has a record of flouting regulations and has faced allegations of illegal activity before. Zhijiang is backing a similar development in Cambodia’s Koh Kong province, marred by accusations of illegal land grabs, as well as a large spa and other projects in the Philippines.

As Naw Wah Ku Shee told Karen News, “We don’t want our land to be taken and sold to anyone, including Chinese gamblers. They have taken advantage of the ceasefire [between the KNU and the military] and the Burma army has used it to expand its operations and troops into Karen-controlled territory.”

Karen civil society groups point to other examples of border economic zones-cum-gambling hubs in Southeast Asia that became centers for illegal activity—the ill-fated Boten Golden City special economic zone on the China-Lao border, for one.

Yatai International also makes much of its plans for blockchain technology at Shwe Kokko—the company promotes it as “Myanmar’s Blockchain SEZ.” The use of blockchain currencies is common among online gambling operations—they allow customers and businesses to move money outside of formal banking systems, keeping identities confidential.

Frontier Myanmar reported that Yatai International is also working with a Singaporean cryptocurrency firm, Building Cities Beyond Blockchain. The company’s website claims that “Yatai City” will use its blockchain technology to support “finance and business services” to utilities. The Frontier report also found that the Singaporean firm’s parent company may be violating Myanmar’s Financial Institutions Law.

Falling off the Belt and Road

Photo: Karen News / YouTube

Amid the controversy over the project, Yatai International has attempted to increase the legitimacy of Shwe Kokko by linking it to BRI, according to analyses by both Frontier Myanmar and Crisis Group.

A promotional video for the project bills it as a “flagship” of BRI, and a “passageway that connects [the] Indian Ocean and Pacific Ocean”—an odd claim for a development in mountainous rural Myanmar.

The move appears to have worked, at least in part, as some media coverage reflects the narrative. Both the media and critics of the project have also mistakenly referred to the developer as a Chinese state-owned enterprise, confusing Yatai International with the similarly-named and state-owned Jilin Yatai.

By associating the project with BRI, the company gives the impression that it has state backing. But for a project that can exist only in the margins, this is an odd side-step.

“It is like we are under two administrations [in Myawaddy]. The project is totally under the armed group,” U Sein Bo, the Myawaddy lawmaker, told The Irrawaddy. “All security checkpoints in Myawaddy are controlled by the armed group. The question is who controls that armed group? It is not easy to solve all the problems smoothly according to the law.”

The land under Shwe Kokko became valuable because of its location on the border—on the Moei river—where illicit businesses thrive with the blessings of the BGF—with the tacit approval of the Myanmar military, but outside of state control.

Like Karen civil society groups, journalists and anyone else looking for clarity, the Myanmar government faces murky territory in its investigation.
As U Sein Bo said, “We heard about the casinos, crimes and other things. But that area is not accessible for us. That is the main problem.”

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