Scam Cities, Smuggling and State Collapse: The Inevitable Toll of Military Rule

The rise of illicit trade and scam cities

By 2026, Myanmar had become the world’s leading opium producer and a regional hub for so-called “scam cities”—vast criminal compounds along the borders with Thailand and China.

The country’s opium output had more than doubled from pre-coup levels, reaching over 1,000 metric tons, according to the United Nations Office on Drugs and Crime’s Myanmar Opium Survey 2025. At the same time, the country continued to be a major producer of synthetic drugs, including methamphetamine and ketamine, which are trafficked to neighboring nations.

Since the coup, large-scale cyber fraud operations, often termed “scam cities,” have emerged in the country’s lawless and poorly regulated border areas near China and Thailand. The collapse of the legal labor market has facilitated widespread labor trafficking, with criminal syndicates mostly run by Chinese gangs forcing hundreds of thousands of individuals from Asia, Africa and other regions into complex online scams and cryptocurrency fraud schemes.