Scam Centers Fuel Inflation in Burma, the Case of Tachileik

Antonio Graceffo

Since the 2021 military coup, Burma’s economy has contracted by about 20%, annual inflation has exceeded 30%, and more than one-third of the population faces food insecurity. Jobs are scarce across the entire country, and food prices in some areas have more than tripled. Inflation is worst in regions hosting scam center compounds, where the influx of criminal capital distorts local markets without generating productive economic activity.

Scam compounds are typically large, fortified complexes operating behind a public-facing commercial layer of casinos, hotels, restaurants, and shopping areas. That legitimate exterior provides cover for the core operation inside: trafficked workers forced to conduct cyber fraud, typically cryptocurrency investment schemes and romance scams targeting victims in the United States and elsewhere. Workers are recruited under false pretenses or kidnapped outright, confined behind walls and armed guards, and face violent punishment for failing to meet daily quotas.

The economic benefits to the area are sharply unequal. Most residents face rising prices and increased danger with no gain. A small number find low-wage work in public-facing businesses, while a very small group at the top, Chinese syndicate leaders and their militia partners, accumulates significant wealth.

Many scam centers are situated in the Golden Triangle, the region where Myanmar, Thailand, and Laos converge, long notorious for drug trafficking, the illegal arms trade, and unregulated gambling. At its heart sits Tachileik, a border city in eastern Shan State directly across from Mae Sai in Chiang Rai Province, northern Thailand. The Mekong River serves as a vital artery for trade and transportation linking communities across borders, and multiple currencies, the Thai baht, Chinese yuan, and Myanmar kyat, circulate widely, reflecting the region’s cross-border character. In recent years, Chinese-owned mining operations and manufacturing businesses have expanded into the area alongside scam centers, adding new dimensions to an economy already shaped by criminality.

Tachileik is itself a documented scam hub. Residents report hundreds of online gambling and fraud operations running out of rented homes and hotels across the city’s 11 neighborhoods, with Chinese among the operators. Named hotels, including the 1G1-7, the Tachileik International, and the Regina, have been raided by junta forces, with hundreds of foreign nationals detained and hundreds of computers, mobile phones, and Starlink satellite devices confiscated. Thailand identified Tachileik as one of five Myanmar border locations serious enough to warrant cutting electricity supplies in February 2025.

Despite the poverty of most of the population, the cost of living in Tachileik remains high compared to neighboring Thailand, while wages are significantly lower. A typical daily wage in Tachileik is around 200 baht ($6 USD), less than half of Thailand’s average of 500 baht ($15 USD) per day. At the same time, a simple bowl of noodles costs about 80 baht (approximately $2.50) in Tachileik, compared to around 50 baht across the border.

The inflationary impact of scam centers operates through three distinct channels. The first is labor market distortion. In Laikha Township, Shan State, a Chinese-run scam call center established under the protection of the 758 Battalion of the Shan Border Guard Force paid wages high enough to pull young people off farms, bidding up consumer goods prices for the broader community.

Nang Oo, a 25-year-old noodle vendor from Tachileik, witnessed the same dynamic firsthand. “Before the call centers arrived, the prices of goods and rent were similar to those in Thailand,” she said. “But when the scammers set up their base around 2018, prices nearly doubled.” She was among the few who benefited indirectly, earning enough from the increased foot traffic to buy a house and a car, but described that period as exceptional and largely over by 2024 and 2025, when most operations in Tachileik were shut down.

The second channel is commodity market manipulation. When crackdowns threatened scam center operations, militias cornered the domestic fuel market, causing acute price spikes across Karen, Mon, and Shan State within weeks, with fuel nearly doubling in some areas. Thailand was pressed to resume fuel exports to bring prices back down, demonstrating that armed groups controlling these compounds have sufficient market power to trigger supply-side inflation in essential commodities on short notice.

The third channel is the macro-level currency collapse in which both operate. Since the coup, the kyat, Myanmar’s currency, has fallen from roughly 1,300 to 3,900 to the dollar, a 75% decrease in value. The loss of buying power has made imported goods and fuel, priced in dollars or yuan, exponentially more expensive in local terms.

The scam economy accelerates the economic collapse caused by the military conflict by replacing legitimate economic activity with illicit revenue that flows primarily to Chinese syndicate leaders and their militia partners rather than back into the general economy. Scam centers have such a high rate of return that those with enough money and political connections choose to build a scam center rather than a manufacturing business, which would create more jobs and bring down the cost of goods.

The scale adds to the problem. A United States Institute of Peace report estimates that 305,000 scammers across Myanmar, Cambodia, and Laos account for $39 billion in stolen funds annually. The Myanmar military collects roughly half of the $192 million earned annually by the Border Guard Force from the Shwe Kokko scam center alone, making this revenue an existential contribution to the junta’s war budget. The war itself drives further inflation through supply-chain disruption, displacement, and destruction of agricultural land.

As international pressure mounts, operators have begun relocating compounds 100 to 200 kilometers from the border into more remote areas of Shan and Karen states, spreading these inflationary effects into communities previously insulated from them.

Antonio Graceffo is an economist and China expert who has reported extensively on Burma.