Organized crime looks East

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here.

In 2013, international attention began to fixate on the organized crime challenge in East Asia. The region is no stranger to organized crime; groups such as Japan’s Yakuza and Hong Kong’s Triads have long exercised a strong influence over East Asia’s criminal underworld. However, the region’s breakneck economic growth has changed the stakes of the game. No longer is East Asia a peripheral market for drug traffickers, cyber criminals, and human smugglers, too small in scope and value to be a target in its own right. Increasing affluence in China, Indonesia, Vietnam, and the Philippines have opened up a market for organized crime figures comparable in value, and larger in absolute population size, than the traditional high-value organized crime markets in Europe and the United states. One estimate notes that by 2025, China’s middle class alone will number 520 million. As East Asia’s licit market booms and beckons, so too does East Asia’s illicit market. Transnational criminal groups have moved rapidly to gain an advantage.

East Asia, and particular China, has become an increasingly lucrative market for drug trafficking organizations. In China, the number of narcotics users is, according to some estimates, above 15 million. Even this huge population of heroin and amphetamine users represents an extremely low usage prevalence rate, both compared to international levels and China’s historic averages. China’s user population is destined to grow. Throughout the region, tens of millions of others regularly purchase and consume narcotics. Historically, producers in the region have supplied East Asia’s narcotics market. This is starting to change. Now, amphetamines are being imported to Japan and China from West Africa, while cocaine is increasingly filtering across the Pacific and into the clubs of Melbourne and Shanghai.

The profits to be made in drug trafficking are huge, and have prompted drug trafficking crime groups from Africa, Latin America, and Europe to try and get involved in the East Asian market. Individuals associated with Mexican drug trafficking organizations have been turning up in increasing numbers in China, including at least one case where one was arrested at a meth lab in the country. Further south, Outlaw Motorcycle Gangs have continued to expand in Australia and South-East Asia, peddling methamphetamines and coercive violence wherever they go. Increased efforts by external organized crime groups to penetrate East Asia’s drug market are likely to accelerate in 2014, propelled as much by the stagnation of narcotics sales in Europe and the US as by the dynamism of the East Asian market.

In addition to drug, human trafficking is increasing throughout the region. The trafficking of persons for labor and sexual trafficking has been an endemic problem for generations. However, the China’s gender imbalance – with tens of millions more males than females – is propelling an increasingly vibrant market in “wife” trafficking. These victims are often trafficked from Laos, Vietnam, and Myanmar; enjoying few rights and high-levels of risk in China, they are vulnerable to domestic violence and forced prostitution.

East Asia has also spurred a sharp rise in ivory trafficking over the last decade. While some consumers are interested in ivory products as evidence of their social status, many have come to view ivory as an investment. In China, there are indications that an Ivory “bubble” has emerged, whereby investor demand and the increasing rarity of ivory producing animals prompt a continual rise in price. In turn, the rapid appreciation in price increases the attractiveness of ivory as an investment vehicle, spurring yet more demand. It is a vicious value circle, and one which, given the finite amounts of ivory in existence, is difficult to deter.

The increased importance of East Asia’s criminal market for criminal organizations makes cooperation with regional governments a vital reality for those seeking to counter those same groups. Cooperative endeavors against ivory, for example, will not succeed without buy in from China. How international actors’ structure their outreach to East Asian governments, and perhaps more importantly how East Asian governments respond, will be a key area to watch in 2014.

Finally, East Asia’s organized crime challenge will not be restricted to the large and rich countries that comprise the dominant markets for illicit goods – such as China, Japan, Korea, and Australia. The poor and peripheral countries of the region will be far more threatened.Limited government capacity in these countries will attract organized crime groups, looking for uncontrolled space in which to establish bases and production facilities. It is quite possible that nations in south-east Asia and western Oceana will be buffeted by high levels of criminal violence in the coming years, similar in scope and challenge to what Central American countries are currently dealing with. Signs of violence and corruption related to organized crime in the less affluent areas of East Asia should be monitored closely, lest ripples of violence further destabilize an economically vital yet precarious region.