Issue 23 Underground Activities Sep 2012 by Noviscape Consulting Group

23 ISSUE

Underground Activities

The World of the Shadow Economy in Southeast Asia Facing the Immeasurable: Black Holes in Southeast Asiaâ&#x20AC;&#x2122;s Shadow EconomIES Violence, Crime, and Justice in Southeast Asia Interview with Dr. Charas Suwanmala Infographic: Shadow Economy & Human Trafficking route in ASEAN

EDITORIAL

3 MR. PREEDA CHAIYANAJIT1

Junior Futurist

MR. KAN YUENYONG P A G E

3 The World of the shadow economy in southeast asia By Mr. Preeda Chaiyanajit

P A G E

6 Facing the immeasurable: black holes in southeast asia’s shadow economIES

By Dr. Apiwat Ratanawaraha And Ms. Ashley E. Pritchard P A G E

9 Violence, crime, and justice in southeast asia By Mr. Pakpoom Saengkanokkul

P A G E 12 INTERVIEW WITH Dr. Charas Suwanmala

P A G E 14 INFOGRAPHIC: shadow economy & human trafficking route in asean By Infographic of the Month

The shadow economy appears in every country. The estimated shadow economy’s size in Thailand is valued at 34.5% of the official GDP. In 1999, Thailand tied Nigeria for having the world’s largest black market economy, accounting for more than 70% of the official GDP (The Economist, 1999). In the 2000s, six ASEAN countries had shadow economies accounting for 30% or more of the official GDP, with four of those countries larger than 40%. To give a clearer picture, Thailand has the largest share of the shadow economy at 50.6%, followed by 50.3% for Myanmar, 48.7% for Cambodia, 41.6% for the Philippines, 30.9% for Malaysia and Brunei, 29.6% for Laos, 18.9% for Indonesia, 15.1% for Vietnam, and 12.9% for Singapore (Schneider, 2012). In this issue, Trendnovation Southeast tracks some weak but emerging signals from the stream of shadow economies in Southeast Asia.

KEYWORDS:

IDEA The shadow (or underground) economy2 is very large and significant in Southeast Asia. Its structure will be changing as some Southeast Asian nations pursue strategies to become fully developed countries in the next decade. Malaysia3 aims to achieve this goal five years after the ASEAN Community integration in 2015, while Indonesia4 plans to achieve a similar target by 2025. The need to compete globally is forcing countries to adopt strategies that increase productivity without necessarily creating new jobs or that keep wage levels down. This is pushing more people into the shadow economy. People at the urban economic periphery, particularly poor street vendors, will face more competition from the unemployed young and educated middle class. The arrival of the ASEAN Community integration in 2015, bringing increasingly open societies that embrace new values and perspectives on issues such as sex, and recurrent national disasters, mean that the informal setting will continue to evolve in tandem with the regional socio-economic dynamics and is unlikely to be lessened.

The first article by Mr. Preeda Chaiyanajit on the World of the Shadow Economy in Southeast Asia touches upon a monitoring of three potential modernizing forces that may be associated with the future of the regional shadow economy’s evolution. These modernizing forces deal with particularly the exclusion of labor from wealth and prosperity, space discrimination in street vending, and transformation of the sex trade, which are deemed to have a highly uncertain future, as some countries in the region are setting their sights on becoming fully developed nations or open economies in the next decade.

SCENARIOS AND EARLY INDICATORS

Labor exclusion: A “middle income trap” time bomb

In the second article, Dr. Apiwat Ratanawaraha and Ms. Ashley E. Pritchard highlight three evolving trends that have emerged from the depths of the shadow economies regarding the manner in which governments address them. They include ignoring prohibitions and endorsing the economy altogether, legalizing the shadow industry, and encouraging the growth of the shadow practice for the benefit of the poor and disadvantaged.

The knowledge-based economy concept (KBE) has been endorsed among Southeast Asian nations since the beginning of the 1990s. An attempt to transform the region into one of fully developed countries, with high quality and knowledgeable workforces, has yet to come. This is the exceptional case for Singapore. Still, Malaysia, Indonesia, Thailand and the Philippines have been stuck in the middle income country level for decades. Low demand of skills, exclusion of labor from bargaining over key-issues (labor exclusion), and weak systemic development are among Southeast Asia’s three critical obstacles to escaping from the middle-income trap (Doner, 2012). Failure to include labor into income and wealth distribution has significant implications to the underground economy.

The third article by Mr. Pakpoom Saengkanokkul, “Violence, Crime, and Justice in Southeast Asia”, illustrates changes within three key elements, namely violence, crime and justice. The article portrays us with a fresh review on violence by and within women, the severity of knowledgeintensive crime in the health sector, and rethinking modern justice.

For the demand side perspective, small and medium-sized enterprises (SMEs) dominate a majority of business firms in Southeast Asia. There are mainly less capable of generating higher income employment, and have a lack of knowledge and technical skills, while a few large national corporations (LNCs) have very closed connections with political parties in order to get influence over labor and social security policies. Labor exclusion has a negative impact on blue-collar, low-wage and new graduated white collar jobs. Their earnings are not sufficient when compared with rising consumer prices.

In this issue we interview Prof. Dr. Charas Suwanmala, a former dean of the Faculty of Political Science, Chulalongkorn University. He elaborates on a linkage of the underground economy and the formal sector in Southeast Asia, a relationship that exists between public officers, politicians and local “big brother” in doing “business” together. He also highlights on a controversial issue of informality in the agricultural system. Our infographic of the month takes a look at the size of the shadow market and human trafficking route in ASEAN. The trafficking in persons has been a major crime for decades. ASEAN is both the source of supply for illegal laborers to the world, and a destination for this immoral trade.

Malaysia and Thailand have suppressed minimum wages through a tri-party mechanism. Particularly in Thailand, the minimum wage has stagnated and has not kept pace with inflation for the past fourteen years (Asian Correspondent, 2011). Only 6.7% of income was shared by the poorest 20%, while 47.2% of income was held by the richest 20% (World Bank, 2009). For example, a high level 1

administrator’s wage in Thailand is ranked as the 8th highest in the world.5 A new minimum wage policy, implemented in the late 2011, has been received with protests and criticism by some private sectors, and particularly the Thai Chamber of Commerce.6 Minimum wage for bachelor degree holders will be increased to USD 500 per month in 2014.7 Instead of improving competitiveness, SMEs still prefer low-wage policies and recruit foreign migrants, who are excluded from social security. Thus, international illegal migration fueled by uneven regional development also contributes to the expansion of the shadow economy. For the supply side, decades of investment to improve human capital has not been very successful. There are more graduates than there is a demand for college graduates in the job market. For example, around 41% of the unemployed are Filipino graduates (Joint Foreign Chamber, 2009).8 In Indonesia, there are almost 10 million unemployed, and 1.15 million of these have higher educational degrees (AIEC, 2008).9 Indonesia and the Philippines have among the highest unemployment rates, and the Philippines has a very high brain drain rank. This indicates that many Filipinos seeking quality appropriate jobs may have the intention to join Filipinos working aboard (Joint Foreign Chamber, 2010). In Malaysia, 30.7% of 132,000 graduates were unemployed in 2006 (Tan, 2007). In Thailand, the unemployment rate for the second quarter of 2012 has risen to 0.92 percent, or 360,000 people, of which 42.2 percent, or 151,920 people, were new university graduates.10 Even in Singapore there are around 13,000 new graduates turning to self-employment, as they cannot find any appropriate jobs (Bhomwik, 2005). Also, new job creation has not been a priority among policy makers and the private sector. This vicious cycle will create a white-collar unemployment crisis and slow down the pace of development. With a high intra-regional competition, regional integration, and skilled labor shortages, it will be likely that underground employment will spread from skilled to professional levels (freelancers) before a realization of the single market in 2015. Mismatches between national demand and supply of labor will narrow down the young graduates in these countries to compete with foreign competitors with the same qualifications, but with more versatility and international orientation. The unemployed graduate will finally join other skilled workers in their exclusion from the formal labor force in the near future.

Labor: the first to be forgotten and the last to be remembered for wealth distribution. Some rights reserved by Lennon Ying-Dah Wong.

The author would like to express his gratitude to Mr. Jorge Carrillo-Rodriguez and Dr. Pun-Arj Chairatana for their advice and suggestions on shadow economy and key relevant issues. Underground activities are involved in almost everything ranging from street merchants, vendors at flea markets, unlicensed trade, to gambling and state abuses. The underground economy absorbs almost 1.8 billion people in the workforce, or half of the world’s labor population. By 2020, the OECD foresees that the shadow economy will employ two-thirds of the world’s workers. 3 http://www.pmo.gov.my/?menu=page&page=1898 4 Indonesia Masterplan for Acceleration and Expansion of Indonesia Economic Development (2011 – 2025) 5 http://hilight.kapook.com/view/13309 6 http://thailand-business-news.com/business/30975-thailands-minimum-wage-increase-raises-concern#.UEV058FlTXg 7 http://www.dailynews.co.th/politics/21705 8 In Philippines, 43% of workforce is in the informal sector. 9 http://www.aiec.idp.com/pdf/Winarto_Thurs_1630_M4.pdf 10 http://www.bangkokpost.com/news/local/310958/unemployment-up-60000-teachers-wanted 2

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group or the Rockefeller Foundation. Copyright © Trendsoutheast 2009 - 2012. All Rights Reserved.

Shadow economy; street vendor; middle income trap; informal setting; sex trade

Space discrimination: More middle class vendors to occupy streets in Megacities in Southeast Asia In Indonesia, after the economic crisis of 1997, SMEs employed 88% of workers and 90% of SMEs were involved in the informal sector. Informal sector workers have a new image as heroes and heroines for encouraging the economy (Dimas, 2008). Public walkways in the big cities of Southeast Asia have been occupied by street vendors; urban poor and economic migrants who live in slums or cheap public housing around the central business district (CBD). A common “misunderstanding” is that all marginalized people working in informal settings do so because they do not have another choice. To be certain, large numbers are forced into the shadow economy. However, it also true that some, particularly in urban areas, choose to work in that setting for a variety of reasons, including “…the possibility of higher earnings, greater independence enjoyed by being self-employed, the possibility of investing the money in small informal enterprises, and the lack of trust in the government to deliver on promises, such as future pension benefits” (Maloney, 2003). In Thailand, street vending is not a business reserved for the poor. High earnings from street vending attract the educated middle class. Street vending is a new challenge to become independent and entrepreneurial (Rupkamdee et al. 2005). The 1997 financial crisis in Southeast Asia caused a skyrocketing unemployment rate. The rise of laid-off employees accelerated a mobilization of labor from the failed formal sector into the agricultural and informal sectors (Chairatana, 2012). For example, around 1.1 million employees were laid off between 1997 and 2001 in Thailand (Nirathorn, 2006). At the same time, many small investors transformed themselves into self-employed entrepreneurs, e.g. an ex-financial tycoon, Mr. Sirivat Voravetvuthikun, who put a seed for well-educated entrepreneurs for the first time in Southeast Asia by joining the street vending arena. Sirivat was considered as a middle class idol and many followed suit. That was the starting point of middle class street vending as an occupation. For example, many teenagers and young graduates are using their car boots to sell their belongings. Street vending has a high potential to be a key economic driver and induce government to participate. The governments have plans to support SMEs and encourage young entrepreneurship, for example, through SMEs fund in Thailand. However, middle class street vendors who have higher education, connections, more information and knowledge, gain more advantage from these governmental plans compared with low-class street vendors. Normally, middle class street vendors have assets and greater competitiveness, more than low-class street vendors, and with these governmental plans the gap will boost this up. For example, a solar cell coffee bus business in Thailand uses assets, business management and knowledge to create value-added products and attract middle class consumers.11 Moreover, in order to standardize street vending, the government has expanded their regulation of other issues. For example, Thailand has launched a food poisoning control plan. This plan pushes more risk and cost to food street vendors, especially the low-class food street vendors. The emerging middle class involved in street vending and the government may grab and confiscate the economic space of the poor, who define this space as their only way of survival.

Box 1: The Case of Siam Square In the case of Rama 1 Road at Siam Square, a stretch of the footpath is a prime location for businesses as a huge number of people walk past the spot each day. Not just at the bus stop, but also because a key Skytrain station is right there. Most street vendors are still young and in their 20s and 30s. They mostly sell clothes and accessories. However, their occupation is illegal since they do not pay rent and they occupy prime real estate, so they have become a nuisance to the pedestrians trying to walk on the pavement. When faced with efforts to try to stop them setting up their stalls, hundreds of them loudly protested, blocked some lanes on Rama 1 Road, and removed everything in their ways. They have used poverty and having occupied these spaces and sold from them for many years, paying fines as rent, as excuses for continuing their businesses. The problem also has to do with municipal officers who take bribes from these vendors. Source: http://www.nationmultimedia.com/home/Siamsquarevendors-fight-Chulas-plant-pot-project-30150328.html

Because of a lack of opportunities, most of them have been forced by economic forces, physical force or social force to become prostitutes, and have been treated like sex slaves. They are looked down upon by society and extorted by police officers. They have had their human rights violated and have no right of access to public health care. They are excluded out to the periphery and treated as invisible persons in society.

Street vending at Siam Square. Some rights reserved by norsez.

However, mobile street vendors, who are poor, uneducated, or even homeless and not benefiting from government policies, have been marginalized by city authorities, the well-educated street vendors, and mafia. And in the worst case, they may have no other choice but to turn to begging.

Extreme sex trade from the apex to the bottom of the pyramid Prostitution has been criminalized by law since the last century.12 The legality of prostitution varies in each country and while most countries such as Thailand, the Philippines, Cambodia and Malaysia have rules and regulations making the act illegal, other countries within the region do not specifically address the legal issue, such as Indonesia. Singapore has actually made prostitution and brothel ownership legal, abiding by mandatory health checks and minimum age requirements (ProCon.Org, 2009). Prostitution and the sex trade have been transformed into a sophisticated business with high competition. Mainland Southeast Asia (Cambodia, Laos, Myanmar, Thailand, and Vietnam) and the Philippines are among the world’s favorite sex spots. Sex tourism overtly draws foreigners to the region, and one report estimates that 4.6 million Thai men regularly frequent sex workers, while 500,000 foreign tourists annually use prostituted women (Hughes, Sporcic, Mendelsohn, & Chirgwin, 1999). One International Labour Organisation (ILO) report, which outlined the sex sector in four Southeast Asian countries, Indonesia, Malaysia, the Philippines, and Thailand, concluded that prostitution accounted for between 2 to 14 percent of GDP, with unaccounted larger revenues being collected by government authorities illegally in the form of bribes and corruption, and legally from licensing fees and taxes on many of the hotels, bars, restaurants and game rooms where the industry is often housed (ILO, 1998). In Jakarta, Indonesia alone for example, there is an estimated annual turnover of $91 million USD from activities related to the sale of sex (ILO, 1998). Sex has become an open topic for discussion in many countries in the region. Also, sexual expression among a new generation has become more free and diverse. Pornography is illegal in all Southeast Asian countries (except Singapore) but it has to be recognized that in recent years Japanese adult movie actresses have been accepted in general and thus exploited as a part of marketing appeals for Thai movies with nationwide releases13, 14, auto shows15 and even the Songkran Festival 2012 in Buriram.16 These phenomena seem to encourage the society to engage in a sex-related conversation in a wider fashion. The image of the prostitute has gradually become acceptable. Prostitution in Thailand has come to not only be tolerated, but accepted and promoted as a tourist attraction, in addition to a common societal practice. Some people enter this market in the name of freedom and the right of his or her body. For example, one teenage student is selling her virginity online for her tuition fee17, and a sideline business of many college and university girls in Thailand is prostitution or the porn star industry. However, the mirror has two faces, and it is estimated that the majority of the people have no intention to enter this illegal market. 11 http://www.smesreport.com/column.php?id=000882 12 It is considered as unmoral activity by human right while prostitution is a kind of commercialization of human body. For example, it has been prohibited since 1996 in Thailand by Prevention and Suppression of Prostitution Act B.E. 2539. 13 http://en.wikipedia.org/wiki/Hormones_(film) 14 http://www.screendaily.com/5042406.article 15 http://www.inautonews.com/porn-star-sora-aoi-opens-2012-bangkok-international-auto-salon#.UEJUx8HiYhU 16 http://namastebangkok.com/hot-bikini-sexy-av-girls-at-songkran-2012-thailand.html

Prostitution is also related to climate change. The Nargis cyclone hit Southern Myanmar in 2008 and drove women to migrate from the rural areas to the urban regions. Once in the city, these women, lacking experience of life outside their village, became easy targets for exploitation, forced labor, prostitution, and trafficking.18 Moreover, children’s vulnerability is significantly increased when they are separated from their families, unaccompanied, orphaned, or displaced following a humanitarian crisis. Furthermore, child prostitution is a serious issue, where one-third of the total sex industry in the Greater Mekong Sub-region is comprised of minors between the ages of 12 and 17 years old (IRIN, 2009). Some people exploit the chaotic environment that follows a natural disaster to engage in criminal activities, such as selling children for the purpose of illegal adoption, forced labor or sexual exploitation.19 It has also been reported that the cyclone led to a huge increase in the number of commercial sex workers in the capital of Yangon. That was also the case after the 2004 disaster, when a “tsunami generation” of children orphaned or separated from their parents in Indonesia’s Aceh province were abducted by organized gangs of traffickers.20, 21 In the future, there is a real uncertainty for the same vicious cycle to happen again if the parties involved cannot come up with appropriate actions.

DRIVERS • To be graduated from “middle income trap”, requires a diversification of economic activity and specialization of skills and knowledge labor to deliver innovation and survive in a global market. • Devastation caused by disasters have left unmarried women with very limited opportunities to earn a living. Thus, many were prompted to leave their villages and look for work in the city. • Disasters and climate related catastrophes are increasing the dangers facing children today such as child trafficking.

INHIBITORS • Each year, large numbers of backpackers visit Southeast Asia. Around ninety four percent bought food from street vendors and about one third of these foreign backpackers had experienced diarrhea during their trip (Piyaphanee et al, 2010). • Mindset of city authorities mainly discriminates against mobile and poor street vendors, but supports middle class ones.

REFERENCES

Children separated from parents by disaster could be exploited sexually. Some rights reserved by Foreign and Commonwealth Office.

IMPLICATIONS • Class-clashed challenge - Higher-income economies in Europe generally are based on “cross-class collaboration”. The advantages of labor inclusion are to increase productivity, reduce tendencies to provoke stress, and increase labor security, living standards and human capital. However, some countries in Southeast Asia are focused on low-wage intensive policies in order to increase competitiveness in the global market. Improvement of both classes collaboration in Southeast Asia will be a new challenge. • Mismatch between educational system and labor demand will continue - Graduated workers will face difficulty in finding jobs and will enter informal sector employment. At the same time, social protection and justice will be challenged through confrontation between the poor and the middle class. • Conflict of freedom and human rights - Rising of the will to be a prostitute raises the question and conflict between freedom and human rights. This will change the moral perspective and need new arguments to redefine. 17 http://www.telegraph.co.uk/education/educationnews/8239070/Teenage-student-sells-virginityonline-to-fund-tuition-costs.html 18 http://www.ukessays.com/essays/social-policy/cyclone-nargis-in-burma.php 19 http://www.unisdr.org/archive/25934 20 http://www.dailynews.lk/2005/01/06/wor03.html 21 http://www.hrusa.org/workshops/trafficking/ThinkAgain.pdf

Bhomwik, S.K.(2005). Street vendors in Asia: A review. Retrieved from http://wiego.org/sites/wiego.org/files/publications/files/ Bhowmik-Street-Vendors-Asia.pdf Coordinating Ministry for Economic Affairs (2011).Masterplan for Acceleration and Expansion of Indonesia Economic Development, Republic of Indonesia. Retrieved from http://www.ekon.go.id/media/filemanager/2011/05/27/ p/d/pdf_mp3ei.pdf Dimas H. (2008). Street vendors: Urban Problem and Economic Potential, Working Paper in Economics and Development Studies, Department of Economics Padjadjaran University. Doner, R. (2012). Success as Trap?: Crisis Response And Challenges To Economic Upgrading in Export-Oriented Southeast Asia, The Second East Asian Miracle?: Political Economy of Asian Responses to the 1997/98 and 2008/09 Crises, JICA-RI Working Paper No. 45, Tokyo, JICA Research Institute. Retrieved from http://repository.ri.jica.go.jp/dspace/bitstream/10685/76/1/ JICA-RI_WP_No.45_2012.pdf Fleming, D and Søborg, H. (2012). Malaysian skills development and the middle-income trap. Paper presented at Track3e: Developing Skill for a Knowledge Economy: Emerging Orders of Production and Skill Development in a Global Economy, the 16thILERA2012 World Congress, July 2-5, Philadelphia, ilera. Retrieved from http://ilera2012.wharton.upenn.edu/RefereedPapers/ FlemingDaniel%20HenrkSoborg%20ILERA.pdf Franck, K.A.(2012). From formal employment to street vending: Women’s room to maneuver and labor market decisions under conditions of export-orientation The case of Penang Malaysia, Department of Geography, University of Gothenburg. Maloney, W. (2003). ‘Are Labour Markets in Developing Countries Dualistic?,’ Policy Research Working Paper 1941. Washington DC: The World Bank. Nirathorn, N. (2006). Fighting Poverty from the street: A survey of street food vendor in Bangkok, International Labour Office. Piyaphanee, W., Kusolsuk, T. Kittitrakul, C. Suttithum, W. Ponam, T. Wilairatana, P. (2010). Incidence and Impact of Travelers’ Diarrhea Among Foreign Back packers in Southeast Asia: A Result From Khao San Road, Bangkok, Journal of Travel Medicine, Vol. 18, Issue 2, pp. 109–114, March/April 2011. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.17088305.2010.00484.x/pdf Schneider, F., (2012).The Shadow Economy and Work in the Shadow:What Do We (Not) Know?,IZA Discussion Paper No. 6423, Bonn, The Institute for the Study of Labor. Retrieved from http://ftp.iza.org/dp6423.pdf Singh, A., Jain-Chandra, S., and Mohommad, A. (2012). Inclusive Growth, Institutions, and the Underground Economy.International Monetary Fund. Retrieved from http://www.imf.org/external/pubs/ft/wp/2012/wp1247.pdf http://wiego.org/informal-economy/occupational-groups/street-vendors http://www.fao.org/docrep/MEETING/004/AB523E.HTM

ABOUT THE AUTHOR Preeda Chaiyanajit is a Junior Futurist and Project Co-ordinator at Noviscape Consulting Group. He obtained his M.Sc. in Technopreneurship and Innovation Management Program from Chulalongkorn University, Thailand and his BBA in Business Information System (BIS) from Assumption University, Thailand.

BY DR. APIWAT RATANAWARAHA

Department of Urban and Regional Planning, Chulalongkorn University AND

MS. ASHLEY E. PRITCHARD

KEYWORDS:

IDEA Shadow economies are defined as ‘market-based production of goods and services, whether legal or illegal, that escape detection in the official estimates of GDP.’ Like black holes, shadow economies lie in plain sight but are hidden from full recognition and understanding. Shadow economies have notoriously contributed greatly to Southeast Asia’s wealth and continue to play a substantial role in the modern economy. These shadow economies contain money and jobs generated outside the official economy, whether legal or illegal. The ways in which countries around the world have attempted to curtail and control these shadow economies varies greatly, from punishment, prosecution, and education.

SCENARIOS AND EARLY INDICATORS Three evolving trends have emerged from the depths of the shadow economies regarding the manner in which a government addresses them. They include officially ignoring prohibitions and endorsing the economy altogether; legalizing the shadow industry, often times to capture the tax benefits not caught with illegalities; and actually encouraging the growth of the shadow practice for the benefit of the citizens involved.

Turning a Blind Eye: How Authorities and the Public Darken the Shadow

Shadow economies; legalization; timber trafficking; gambling; cross-border smuggling operating in collusion with government officials, and that officials use the excuse of the poor as a pretext for organized crime and corruption (van der Ploeg, 2011). Illegal trade in wildlife is isolated to two remaining regions in the world – Southeast Asia and Africa, where poached elephant ivory, rhino horn and tiger parts yield criminal profits estimated at USD 75 million USD each year (UNODC, 2012b). According to the World Wide Fund for Nature, traffickers illegally move over 100 million tons of fish, 1.5 million live birds, and 440,000 tons of medicinal plants per year (WWF, 2006). Asia serves as a source, transit, and destination region for a large share of the endangered animals poached in the world, with Myanmar, Laos and Cambodia being the most affected source countries. One ongoing example of government-endorsed illicit wildlife activity involves a bi-lateral agreement between Laos and Japan, in which eight young female elephants are to be shipped from their forested and subtropical homes in Laos, to the cold and caged Tohoko Safari Park Zoo outside Fukushima, Japan. As an internationally recognized endangered species, exploitation of the Asian elephant is banned under the international convention CITES, but the government has found a loophole by labeling this exchange as ‘renting’ elephants. With only 60 domestic female elephants remaining in the country under the age of 35, by shipping out 10% of this population, the government is further sponsoring wildlife abuse and ignoring international law (Asian Elephants Today, 2012).

Through active denial, ignorance, and participation, authorities have furthered the presence and ensured the prevalence of illicit activities within Southeast Asia. While these illicit activities have existed for decades, there has been a recent resurgence of illegal logging and wildlife smuggling and poaching within Southeast Asia. Laws and legal ramifications banning such activities have been in place, but the increase in recent years has been brought about with assistance from government officials who profit from the underground. Illegal trafficking of timber occurs extensively within Southeast Asia and is sold to the rest of the world. Consequently, the region is experiencing the fastest deforestation rate on earth (UNODC, 2012a). It is estimated that Asian and European demand for illicit timber makes up more than half the global market, with the European Union alone importing an estimated 20 per cent of the illegally felled timber in the world, and China around 25 per cent (UNODC, 2010). Bi-lateral borders contribute largely to this prohibited crime, whose illicit logging contributes to irreversible environmental damage. For example, it was estimated that in the early- to mid-2000’s, 98 per cent of all the timber leaving Myanmar for China overland was illegal (UNODC, 2012a). Similarly, in the early 2000s, 80 per cent of the timber coming out of Indonesia was illegal (UNODC, 2012a). Government officials turn a blind eye to these activities, often for the opportunity of bribe money. In the Philippines, government officials ignore small-scale logging activities, claiming that environmental legislation “cannot be enforced as the poor depend on timber revenues. Banning rural communities from utilizing forest resources is considered illegitimate and ineffective” (van der Ploeg, 2011). But many environmental activists state that this industry is in fact run by businessmen

These illegal logs were harvested from natural forest, Riau, Indonesia. Some rights reserved by CIFOR.

Illegal loggers in the central Vietnamese highlands. Some rights reserved by the mechanical turk.

Approval through Legislation: Taking the Black out of Blackjack The debate over whether or not to legalize gambling has been going on for several decades, but some countries in Southeast Asia made drastic changes in recent years. Gambling in this region predominately remained illegal until recently, when Singapore shocked the Asian community by announcing in 2005 that it would legalize gambling, and by 2010 it had opened its first two casinos. In just two years, Singapore has established itself as the region’s main competitor to Macau, who remains the undisputed casino king with $33.5 billion in revenues last year, compared with Las Vegas’ $10-billion for the whole of 2010 (Master, 2012). Casino expansion and legalization of gambling is mushrooming across Southeast Asia, with Vietnam being the latest to pick up the gaming craze. In December 2011, a U.S. company, Las Vegas Sands, announced a vision of investing in two large resort complexes in Ho Chi Minh City and Hanoi. The total invested capital would reach US$6 billion and would represent the most important foreign investment project ever conducted in Vietnam (Indochine Counsel, 2012). Taking advantage of neighboring China, where casinos are still illegal, the government has licensed four new casinos near the border to lure gamblers across international lines (Finch, 2012). Similarly, many casinos have already been built in the Philippines, and a new $15 billion gaming complex is set to open in Manila in 2013. Critics of casinos and legalization to gambling cite rises in social problems such as organized crime, alcoholism, and gambling addiction. Thailand and Indonesia are two Southeast Asian countries who have outlawed gambling. However, it is projected that the underground gambling market in Thailand profits an estimated $3 billion USD annually (Phongpaichit, 2011), and some indicators suggest that up to 70% of the Thai adult population gambles regularly (Frank, 2009). But as governments faced the difficulty of combating underground organized gambling rings, some governments adopted a different approach by legalizing gambling and making a small profit by taxing casinos for revenues. To combat many of the potential social problems, Singapore imposed casino entry levies, requiring its citizens and permanent residents to pay entry fees of $100 Singaporean dollars a day. Authorities also banned advertising which targeted locals, and rolled out social programs to discourage heavy gambling (Wong, 2012). In July of 2012, the government added an additional 15,000 of its citizens to a list of low-income and unemployed people prohibited from entering gaming premises (Finch, 2012). Similarly, Viet Nam has adopted a strict policy on gaming for its citizens – banning locals from all casinos within the country (Indochine Counsel, 2012). Legalization of shadow economies has been a tool that many countries within Southeast Asia have utilized in order to control organized crime and undesirable activities, as well as providing significant monetary benefits from taxing these newly-legal activities. It is interesting to postulate what will happen when the ASEAN 2015 community provides ease of access and increased travel between nations. How will gambling laws and casinos impact the movement of people, and how will this movement impact various national economies? Casinos along the borders of Thailand, such as Koh Kong and Poipet in Cambodia and Savannakhet in Laos, have greatly profited from taking advantage of illegal gambling laws in Thailand, enticing local Thais and tourists to cross bridges and borders for gambling. With the increased traffic of persons between borders in 2015, how will these current monopolizers of wealth and profiteers of legalization be impacted?

Justification by Moral Benefit

While it may be difficult to argue that smuggling counterfeit designer purses into various markets in Southeast Asia is beneficial, there are other instances where smuggled goods cross a line of moral judgment and may do more good than harm. The question then becomes one of a moral standard – it is illegal, but it helps, so how bad is it really? Plagued with civil war, hundreds of thousands of individuals in Myanmar have been displaced, and live in destitution and constant fear for their lives. Some underground organizations along the border between Thailand and Myanmar have recognized the difficulties that certain individuals face and have devised secret plans to help them. One Karen organization works to smuggle orphaned and destitute children across the border into Thailand, where they can be looked after by international aid organizations within temporary shelters, offering housing, meals, security and quality education for the students. In Mae Tao clinic in Mae Sot, Thailand special doctors are trained to re-enter the conflict zones, providing much needed medical treatment to displaced persons. These doctors travel on foot illegally, crossing the border with medical supplies on their backs, risking their lives as they cross through border-patrolled zones, in order to provide treatment to these populations. The smuggling of generic pharmaceutical drugs into Southeast Asia has also been known to benefit many who could not afford costly patent-protected medicines. Most of these medicines are purchased by private practitioners in villages and other remote areas of the city in Southeast Asia, and distributed to poorer communities within the region (Wong, 2012). However, it should be noted that while many people have put these common pharmaceuticals to appropriate use, others have abused these drugs for recreational use. The United Nations Office on Drugs and Crime (UNODC) notes in their most recent report that the decline in traditional drug use is offset by a substantial increase in common pharmaceuticals which mimic the traditional illegal substances (UNODC, 2011). While the action of trafficking children across borders, entering borders unlawfully to tend to populations prohibited by the Myanmar government, and disobeying patent laws and smuggling pharmaceutical drugs into Southeast Asia are all illegal as outlined by law, they have provided life-changing opportunities for people within Southeast Asia.

IMPLICATIONS “I want to win a lot of money to make Mom and Dad happy. I am very poor.” - Pet, 8-year old female child boxer Buffalo Girls, a 2012 documentary, follows the story of two eight-year-old Thai female boxers as they fight underground for the national Muay Thai championship, a prize that could change their families’ lives forever. The documentary states that there are 30,000 child boxers in Thailand, who, with their tiny fists, fight for prize money to offer their impoverished families a better life. This documentary evokes emotion from its audience and beckons judgment, questioning whether the new underground sport is exploitation, empowerment or economic necessity. For poor families, as the parents of these eight year old female boxers noted, “We have no choice. We are poor. My daughter makes money for us so that we can live” (Kellstein, 2012). When it comes to illicit drugs, trafficked persons and wildlife and timber smuggling, there is no denial that these actions are illegal. But for many impoverished individuals and their families, jobs as loggers, prostitutes, and poachers provide income, food, and livelihoods that would otherwise be impossible to attain. Regardless of the risks, some poor individuals are willing to break the rules in order to provide for their families. On the other hand, some impoverished individuals in other parts of the world have found employment through policing these illegal

One of many casinos at the Cambodia-Vietnam border. Some rights reserved by Rock Portrait Photography.

8 activities of the underground. One example of this is in Ol-Pejeta Conservancy in Kenya where a four man anti-poaching team of volunteers permanently guard one of the world’s eight remaining Northern White Rhinos. These armed volunteers, originally from impoverished villages near the conservancy, provide 24-hour protection to the rhinos and feel a genuine vocation towards their protection (Stirton & Gwin, 2012). It is evident that the three approaches to shadow economies, i.e., denial, bribery and inadvertent encouragement; legalization; and justification by moral benefit, each contribute to the massive, immeasurable and powerful black hole which affects each economy in Southeast Asia. Drivers of the underground in Southeast Asia have largely been fought by domestic and international organizations who call for holding higher standards on logging, wildlife, and trafficking laws and punishments. Shadow economies may provide income opportunities for poor people but also come with large risks such as imprisonment and large fines.

DRIVERS & INHIBITORS • Popularity Drives Pricing of Illicit Goods: In Viet Nam, a popular belief has emerged which states that drinking a tonic made from rhino horn will detoxify the body after a night of heavy drinking, and prevent a hangover. One Vietnamese news website described rhino horn wine as “the alcoholic drink of millionaires” (Conway-Smith, 2012). Last year, a Vietnamese official publicly stated that drinking the same rhino horn tonic cured cancer. With this increased demand, prices for rhino horn on the black market soared up to $25,000 USD per pound (Associated Press, 2012). Between 1990 and 2005, poachers in South Africa killed an average of 14 rhinos a year. But with this increased popularity amongst Vietnamese elites, rhino killings have soared. In the first six months of 2012, there have been 43 arrests of Asian nationals for rhino horn trafficking in South Africa - 24 of them alone from Vietnam (Smith, 2012). • Corruption: Corruption is a large driver of shadow economies. In order to successfully combat illegal activities, laws must be supported by the politicians, police and the public. It is evident through the Corruption Perception Index of 2011 that Southeast Asia remains one of the most corrupt regions in the world, with an average of 3.64 out of 10, whereby 0 is ‘highly corrupt’ (Transparency International, 2012). Yet, at the same time, the public has not done their part to support an end to these illegal activities, and furthermore, often promulgates or sponsors these illicit activities in some way. While governments are designated to uphold the law, it is impossible to do without the support and reinforcement from the citizens. In order to effectively eradicate these illegal industries, governments, officials, and society alike must get behind the law and work to prevent, educate, and raise awareness about these issues. • Openness to Changes and Adaptation within Legislation: While legalization of gambling has been heavily contested around the world, within Southeast Asia in the last few years it is evident that new adaptations are being made in order to accommodate the lucrative industry. It appears that more countries in Southeast Asia have continued to expand their legalization and prominence of casinos, especially in Cambodia, Viet Nam, Singapore and the Philippines, while others such as Thailand and Indonesia remain firm in banning all forms of gaming – at least on the surface. • International Awareness Prompts Tighter Government Response: International awareness can pressure governments to take measures in addressing illicit activities. This was the case when the United States government issued its annual Trafficking in Persons report in 2010, documenting government effectiveness and response to issues involving trafficked persons, and demoted Thailand to a ‘Tier 2 Watch List’ country. Since this highly publicized report, Thailand has increased measures to combat trafficking along its borders and offer further support for victims.

REFERENCES Asian Elephants Today. (2012). Tsunami Elephants. Retrieved 6 September, 2012, from http://asianelephantstoday.com/2012/07/20/tsunami-elephants/ Associated Press. (2012). In Vietnam, rhino horn costs more than cocaine. Retrieved 6 September, 2012, from http://www.cbsnews.com/8301-202_16257409111/in-vietnam-rhino-horn-costs-more-than-cocaine/ Conway-Smith, E. (2012). Forget cocaine: Rhino horn is the new drug of status. Retrieved 6 September, 2012, from http://www.globalpost.com/dispatch/ news/regions/africa/south-africa/120823/rhino-horn-party-drug-vietnam-southafrica-poaching Finch, S. (2012). Place Your Bets: Casinos are flourishing across Southeast Asia and big investors are keen to build more. Retrieved 4 September, 2012, from http://www.bangkokpost.com/business/news/303866/place-your-bets Frank, M. (2009). Underground Gambling in Thailand Persists Despite Raids. Retrieved 4 September, 2012, from http://gamingzion.com/gamblingnews/ underground-gambling-thailand-persists-despite-raids-1038 Indochine Counsel. (2012). Gambling Business in Vietnam: What Can Foreign Investors Expect? Retrieved 4 September, 2012, from http://www.vietnam observer.com/2012/05/13/gambling-business-in-vietnam-what-can-foreigninvestors-expect/ Kellstein, T. E. P. (Ed.). (2012). Buffalo Girls (Documentary): Buffalo Girls Movie, in Association with Union Entertainment Group. Master, F. (2012). Risks make Asia casino growth a gamble. Retrieved 4 September, 2012, from http://m.theglobeandmail.com/report-on-business/internationalbusiness/risks-make-asia-casino-growth-a-gamble/ article584185/?service=mobile Master, F., & dela Cruz, E. (2012). Asia’s tycoons team up for $1 bln Manila casino. Retrieved 4 September, 2012, from http://www.reuters.com/ article/2012/07/05/melco-philippines-idUSL3E8I533L20120705 Phongpaichit, P. (2011). Legalise gambling in Thailand? Retrieved 4 September, 2012, from http://www.bangkokpost.com/learning/learning-fromnews/254372/legalise-gambling-in-thailand Smith, D. (2012). Rhino horn: Vietnam’s new status symbol heralds conservation nightmare. Retrieved 6 September, 2012, from http://www.guardian.co.uk/ environment/2012/sep/04/rhino-horn-wildlife-trade-vietnam Stirton, B., & Gwin, P. (2012). Rhino Wars. Retrieved 4 September, 2012, from http://ngm.nationalgeographic.com/2012/03/rhino-wars/gwin-text Transparency International. (2012). Corruption Perceptions Index 2011. Retrieved 4 September, 2012, from http://cpi.transparency.org/cpi2011/results/ UNODC. (2010). The Globalization of Crime: A Transnational Organized Crime Threat Assessment. Retrieved 4 September, 2012, from http://www.unodc.org/ documents/data-andanalysis/tocta/TOCTA_Report_2010_low_res.pdf UNODC. (2011). World Drug Report: Drug markets stable but consumption of synthetic and prescription drugs rises. Retrieved 4 September, 2012, from http://www.unodc.org/unodc/en/press/releases/2011/June/world-drugreport_-drug-markets-stable-but-consumption-of-synthetic-and-prescription-drugsrises.html UNODC. (2012a). Environmental Crime – The Trafficking of Wildlife and Timber. Retrieved 4 September, 2012, from http://www.unodc.org/documents/toc/ factsheets/TOC12_fs_environment_EN_HIRES.pdf UNODC. (2012b). Transnational Organized Crime – The Globalized Illegal Economy. Retrieved 4 September, 2012, from http://www.unodc.org/documents/toc/ factsheets/TOC12_fs_general_EN_HIRES.pdf van der Ploeg, J. (2011). Chainsaw milling in the Philippines. ETFRN News 52 Retrieved 6 September, 2012, from http://www.etfrn.org/etfrn/newsletter/ news52/Chapters/2.6-vanderPloeg.pdf Wong, C. H. (2012). All Bets Are Off At Singapore’s Fake Casinos. Retrieved 4 September, 2012, from http://blogs.wsj.com/searealtime/2012/05/31/allbets-are-off-at-singapores-fake-casinos/ World Wide Fund for Nature (WWF). (2006). Illegal and unsustainable wildlife trade. Series Factsheet Retrieved 4 September, 2012, from http://awsassets.panda.org/downloads/wildlife_trade_factsheet2006.pdf

REFERENCES

ABOUT THE AUTHORS Apiwat Ratanawaraha is an Assistant Professor in the Department of Urban and Regional Planning, Chulalongkorn University in Bangkok, Thailand, where he teaches infrastructure planning and finance, urban management, and economic development. His current research includes projects on city innovations in Southeast Asian megacities, infrastructure justice, and inequality in access to basic services in Thailand. He has been a Visiting Assistant Professor at the Department of Urban Studies and Planning at MIT, teaching infrastructure finance and energy security. He was a Doctoral Fellow at the Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University, conducting research on infrastructure, technological development and innovation policy. Ashley Pritchard holds a BA in Political Science and Economics and a minor in Engineering from Lehigh University. As a Rotary Ambassadorial Scholar, she works with diplomatic and international aid missions for peace while she studies at Chulalongkorn University to obtain her Master’s in International Development. Prior to coming to Thailand, Ashley liaised with NGO’s while working several years at the United Nations Headquarters in New York. Her major research interests include tourism for development, microfinance, and their impact on societies. Her current research is testing the theory of the trickle-down effect in analyzing the relationship between tourism, development and human rights through case work in Myanmar.

MR. PAKPOOM SAENGKANOKKUL Junior Analyst

KEYWORDS:

IDEA Violence, crime, and justice are interrelated and common features for those who live in a vulnerable situation. These contentious issues are being challenged by an unfamiliar disturbance and shift of contemporary social attitude. In Southeast Asia, while female rights are comparably better than in other developing regions1, the violence from and among females is on a rise. As a hub of international logistics, medical tourism, and financial services, the crimes being committed by a well-educated professional class already off-scales and affects the whole region and beyond. With an unimpressive social justice record, some of individual campaigners have already succeeded in rewriting the rule of this controlling system. In this article, we detected three emerging issues within these forces.

SCENARIOS AND EARLY INDICATORS

Violence; crime; justice; female; bio-medical technologies; health sector; forensic system; Southeast Asia

percent of domestic violence is committed by women against men (Harvard Medical School, 2007). Juvenile violence is rising, too. There was a three-fold increase in crimes committed by students aged between 13 and 15 compared with other age groups (Malaysia Crime Prevention Foundation, 2012). In Thailand, secondary and vocational students are living with a cycle of violence. Around 0.7 million Thai students have experienced violence. Family background and media greatly influence them (Child Watch, 2007). Violence among teenagers seems not to be a new phenomenon, but an early warning here is that violence by young females in Southeast Asia has been increasing. There are many violent photographs and clips from young girls being uploaded into social media; such as Facebook and YouTube and other electronic means.2

Violence by females is on a rise Normally, woman and child have been the main targets or victims from violence. Interestingly, the amount of violence from and between females is increasing. Poverty, non-preferable social status, and lack of opportunity are among the key factors for this unseen violence. A community factor (gang affiliation), a family factor (family violence background), and an individual factor (cognitive functioning) are also topping up the risk towards increasing female violence, as well. Growth of the female population in prisons was greater than the growth rate of the male population in prisons in the last decade. This is not only a regional phenomenon, but is already spread all around the world. For example, numbers of female inmate populations around the world on average was 5% in 2000. The female inmate population increased from 3 to 8% in Latin America and 4 to 8% in the EU, in 2006 (ICPC, 2010). A recent figure on the average proportion of female prisoners in Southeast Asia is around 9% of total prisoner population (International Center of Prison Studies, 2012). Examples of violence by women have already spread into the pop culture in various forms, e.g. through films, video games, media, etc. In the real world, around seventy 1 2 3

Increasing violence among female secondary students in Thailand.

Knowledge-intensive crime in health sector increasingly severe Even though regional economic growth in Southeast Asia is higher than in many developing and emerging economic zones, the Gini coefficient3 in the region has not been so impressively better for the past decade. The high level of urbanization of some cities in Southeast Asia, such as Ho Chi Minh City, including cities in the Philippines and Thailand, have higher urban inequality compared with other cities in Asia (UN-HABITAT, 2010). Crime has an impact on gross domestic product (GDP); e.g. annual violent deaths cost around 1.2-2% of GDP in Thailand, around 0.1-0.36% of GDP in Cambodia, Laos, the Philippines and Vietnam, and around 0.3-0.6% of GDP in

According to Social Institutions & Gender Index 2009, Myanmar, Thailand, Laos, Cambodia, Vietnam, Indonesia and the Philippines are ranked as low discrimination between gender countries. http://genderindex.org/data. http://www.youtube.com/watch?v=90quikiIuvo Gini coefficient (Gini Index or Gini ratio) is commonly used as a measure of inequality of income or wealth.

10 Indonesia (IPCP, 2010). These figures cost approximately ten times more for the cases of non-lethal crimes. There is a close relationship among measures of income inequality, property crime, unemployment rates, and imprisonment, according to a collective perception of economic conditions related to change in property crime and robbery (Rosenfeld and Fornango, 2007). However, these familiar figures give us an image of crime associated with uneducated or blue collar people. Recent disclosure of crimes in Southeast Asia paints a disturbing picture of crime by well-educated professionals that damages society much more than crimes by the poor. For example, for a narcotic-related crime within the national drug system in Thailand, over 44 million tablets of Pseudoephedrine disappeared from the Thai healthcare system between 2008 and 2011, through channels of medical staff bribery, especially by doctors and pharmacists. Consequently, Pseudoephedrine has been banned and patients need a doctor’s prescription to buy it. This has impacted the poor to access some cheap pills such as Pseudoephedrine.4 Another more severe organized crime relates to organ and human semen and ova smuggling in Bangkok. It is an expansion of the illegal business of efficient embryo refining through an application of artificial insemination technology on an international scale.5 This business helps a couple with reproductive difficulties, or an individual who desires to have a biologically-tailor-made child, by providing their clients with an on-line catalogue of semen and eggs information.6 This is a wake-up call for the general public on the current situation of regional bioethics by signaling that technological innovation in healthcare is already being exploited in a wrong direction - human trafficking.

11 Singapore, limitation of freedom of expression in Brunei, religious violence in western Papua provinces in Indonesia, extrajudicial killing on the seas around the Philippines, and so on. These do not include the unreported incidents of injustice around the region.7

IMPLICATIONS • A shift on female perception and violence: As part of violence and crime from females, particularly for the younger generation, will increasingly be a significant socio-economic issue in Southeast Asia, but the long-term implications of such gender violence should be observed through angles of gender disparity and imbalances, demographic change, education among females, and a shift in family values among women. This will lead to another implication on a process of individualization in females, particularly for those who grow up in an economically insecure family, and children (girls) who live with a violent domestic environment.

In principle, it is a role of government to provide the citizen with an inclusive justice with a credential investigative system. However, changes in contexts and the complexity of crimes and violence, big accidents, and more natural disasters in the region have raised the question about the effectiveness of state authorities, and the righteousness of some controversial actions by the state among media and citizens. The Thai forensic system foresight conducted in 2010 updated us on many interesting signals for change in the regional crime and investigative system.8 These include a significant rise in inconclusive death cases in many big cities around the region, an overload and overcapacity for crime scene investigating teams (CSI) for properly and culturally managing many Muslim related cases. There is more tension and conflict between governmental justice authorities, together with an inactive forensic system that has resulted from well-known reasons, ranging from budget and human resource limitations, different work processes, and incompatible and unsynchronized information systems and databases, both within domestic and regional levels, and so on. Demands from the citizen and media to be engaged, and observe the whole justice stream in Southeast Asia are increasing (APEC CTF, 2010). Monopoly jurisprudence power and investigative power by the state are not the only formula for social justice and stability of society, and vice versa.

• Grey areas on health related crime

crime networks that traffic in ◦ Organized women are already shifting their deliveries

toward Asia with more sophistication and long term preparation for the case of new-born child trafficking. In general, trafficking in females has a very close link with global drug trafficking, but this vicious cycle is not that similar to such crimes, but it will raise a moral and economic debate among the SEA health and legal sector on a changing paradigm of the general public with a strong patronage structure.

uncertainty lies on the difference in bioeth◦ An ics and bioethics law between western and

oriental societies. Some medical activities prohibited by bioethics law in western countries, for example, procreation technology for homosexual couples, are inducing western patients to fly abroad to Asian countries that have flaws in their bioethics laws.

Southeast Asia is still a region where bioethics and bioethics legislation are neglected. The situation is made more complicated when the crimes are committed by well-educated criminals who find benefits from flaws in the law, particularly in the public health sector. Organized crime committed by specialized knowledge professionals widely and severely impacts society. Those who have been arrested among these groups of professionals can be seen as “a rise of knowledge-intensive criminal” in the region.

Slow step towards an efficient state for modern justice A concept of human rights, originating from Western philosophy, is that there is a universal value which is subject to different levels of recognition and realization. Violation of human rights can be happening all the time by an act of state. The list of such incidents in Southeast Asia is quite long for the past year, e.g. the expulsion of Arakan in Myanmar in the mid-2012, lèse-majesté imprisonments in Thailand, political imprisonments in Laos, Cambodia and Vietnam, racism in Malaysia, application of inhuman punishment such as canning on the bare buttocks in 4 5 6

A 45-year-old female refugee who fled Burma in 2009 after being raped and beaten by two armed Burmese Tatmadaw military while tending her field, Some rights reserved by Richard Sollom, physiciansforhumanrights (PHR).

Pseudoephedrine is a sympathomimetic drug using as nasal decongestant. It is an important ingredient for a production of amphetamine (“Ya Ba” or mad drug in Thai). In the early 2012, Thailand Department of Special Investigation (DSI) arrested 22 healthcare personals from public hospitals under a suspicion of involvement in smuggling or unlawful prescription of pseudoephedrine-based tablets in large numbers. Artificial insemination is the introduction of semen into the vagina or uterus by mechanical or instrumental means rather than by sexual intercourse. Clients pay at least USD 35,000 and choose freely semen and eggs from beautiful men and women and from any race. The company can provide a test tube baby from selected sperm donors with the customer’s ovum, or customers can provide their own sperm and egg and pay the company to impregnate anonymous surrogate mother women. Some of these anonymous women have been trafficked from Vietnam.

7 8 9

• Participating Governance: Certainly, crime is not only committed by the poor. Even though an equal society cannot eradicate crime and violence, there will be continuity on improvement of justice and legal system in the ASEAN context. Even though the United Nations Universal Declaration of Human Rights9 has been realized for decades, the debate on development and a real effect from this grand desire is still in doubt. ASEAN has always avoided pressure against member states to adhere to human rights standards. There will be two possible implications regarding justice for the poor in this region – an implication on bringing socio-economic justice to the poor in the new Myanmar, and supporting the urban poor in cities to understand their basic rights and develop an individual skill to anticipate the complexity of the justice and forensic systems.

DRIVERS & INHIBITORS • An on-going global economic recession, particularly in China, Europe, Japan, and the USA, can trigger knock-on social inequality problems in the region. • Cooperation of crime awareness and crime prevention at all levels: international, national, community, individuals. For example, cooperation from WHO, ICPC, and the ASEAN political-security community. • Violence and crime caused by migration and nontraditional sources of security threats, such as climate change and epidemics. • Mobile technology and social media as means for individuals and organizations to engage with the justice system (both drivers & inhibitors).

REFERENCES APEC Center for Technology Foresight (2010). Report on Thai Forensic Foresight. (In Thai) Bottos, S. (2008). Women and violence: Theory, Risk, and Treatment Implications. Retrieved from http://www.csc-scc.gc.ca/text/rsrch/reports/r198/ r198-eng.pdf Ehrlich, R. S. (2011, March 2). Surrogate mothers offered everyone an “efficient embryo”, International Issues, Departments. Retrieved from http://www.freepress.org/ departments/display/9/2011/4097 Idriss, M., Jendly, M., Karn, J. & Mulone, M. (2010). International Report on Crime Prevention and Community Safety: Trends and Perspectives 2010, International Centre for the Prevention of Crime, Retrieved from http://www.crime-prevention-intl.org/fileadmin/user_up load/Publications/Crime_Prevention_and_Community_ Safety_ANG.pdf Rosenfeld, R. & Fornango, R. (2007).The Impact of Economic Conditions on Robbery and Property Crime: The Role of Consumer Sentiment, Criminology, Vol. 45, No. 4, pp. 735 – 769. Retrieved from http://www.soc.umn.edu/~uggen/Rosenfeld_CRIM_07.pdf Sagant, V., Shaw, M. (2010). International report on crime prevention and community safety: trend and perspective 2010. ICPC, Canada. UN-HABITAT (2010). State of the World’s Cities 2008-2009: Harmonious Cities. Retrieved from http://www.unhabitat.org/ content.asp?cid=5964&catid=7&typeid=46 http://www.nationmultimedia.com/national/Sale-of-pseudo ephedrine-pills-banned-30178420.html http://newscastmedia.com/harvard_study.htm http://www.nst.com.my/nation/general/rise-in-crime-rate-in-13to-15-age-group-1.109597 http://www.gender.go.th/report/report50/see.html

REFERENCES

ABOUT THE AUTHOR

Mr. Pakpoom Saengkanokkul is a Prachatai columnist and Junior Analyst for Noviscape Consulting Group. He graduated with a Master’s degree in social and health organization management from the University of Paris 13, and has a Master’s degree of health economics from the University of Paris 5. He is a Ph.D. student in health economics at the University of Paris 5, and is interested in inequality of health care systems.

All of ASEAN members are listed Tier 2: country not doing enough to address human trafficking except Thailand and Myanmar are listed Tier 2 Watch List. And their human trafficking trade routes are connected all countries in ASEAN region (See Infographic) and make ASEAN a region of central unmoral market. The foresight was conducted by APEC Center for Technology Foresight and the Ministry of Public Health states in 2010. http://www.un.org/Overview/rights.html

INTERVIEW BY MR.KAN YUENYONG

Founder, Siam Intelligence Unit

W I T H Dr. Charas Suwanmala

What’s the relationship between the gang boss and the public officer or politician?

“It’s a triad relationship, among gang bosses, public officers and politicians. If a public officer does not help, the gang boss or politician cannot do anything, thus they will need to go together. If the public officer will not do the job, they may be replaced by others.” “Normally, politicians and gang bosses cannot talk with people in these areas, so they will contact public officers to talk with people in each area instead.”

amphetamines, police, public officers, and also politicians. Every province has this illegal business.” “Some will not be a baron; some will be a small scale gang boss. If it is a big business, such as smuggling, it will relate to a boss in smuggling circles. I’m not sure that the politician is in this circle, but the police are related to the business for sure.”

About

Dr. Charas Suwanmala Dr. Charas Suwanmala is a professor in the Department of Public Administration, Faculty of Political Science, Chulalongkorn University. He used to be a Dean of the Faculty of Political Science, Chulalongkorn University, and also the National Decentralization Committee. He is specialized in public finance and governance. He finished his bachelor degree in Political Science from Chulalongkorn University. He then pursued a Masters degree in Economics at Chulalongkorn University, and Public Administration from the National Institute of Development Administration (NIDA). He obtained his Ph.D. in Political Science at Northern Illinois University, DeKalb, IL in the United States of America.

“At the national level, it is about the real estate business, starting from construction, procurement, land procurement, finding tenants, building, hotels, and tourism. These businesses are related to the money laundry business. The gold shop is also related. Somebody will bring money to invest in these businesses, and they will get earnings back as legal money.” “Some restaurants and resorts are linked to both legal and illegal money. They get legal money by borrowing from the bank, but another part of their funding will come from informal businesses, gambling perhaps. If you look at a public officer or a soldier or even a politician, how can they get the money if they do not borrow it from the bank?”

What is the relationship of local people with the local politician or baron? Are there any patronizing relationships?

How is the underground economy related to corruption?

“Underground economy comprises both legal and illegal business. Legal business is the cash based economy such as informal work, construction, informal work in agriculture and farming, and also street side vendors. These businesses are legal, but they pay no tax, not even GST/VAT. But when they earn money, and make some expenses, the money will enter to the formal system.”

“Yes, but such a relationship is not a good thing. Not only local people, but also the local public officer has a patronizing relationship with the local politician. If they want to have a better career, they will ask for help from a local politician. And after that, they will depend on each other. The local people will depend on this politician for loans, agricultural tools, fertilizer, and so on. These people will get it in advance, and they will pay back with interest and capital. Sometimes the people may not pay the interest, but will help the politician as election canvassers as compensation.”

“The illegal-cycle relates to politicians and barons. It starts from the lottery, informal loans, smuggling, and drugs. These businesses have high volume and high circulated volume, and are mostly related to

“The politicians may not do it themselves, but their relatives will take care of business. Perhaps they have relatives in many provinces, so it is a network of politicians.”

Why is Thailand’s informal economy quite big when compared with other Southeast Asian nations?

“Informal economy is not a new thing. There is a research since 1980, calling this a “dual economy”. It’s a dual economy between the traditional economy and modern economy. A less developed country will have a bigger informal economy. Countries in Africa have around 90% informal debt, and have only 10% of modern economy. Compared with Thailand, we have informal economy around 52-53% of GDP. Countries such as South Korea and Singapore have 80-90% of modern economy. When our economy is growing, it is growing from the informal economy rather than the formal one, which has slower growth.” “Informal economy includes migrant workers from up-country, who have jobs in the city. And, they are hired in the informal sector, such as motorcycle taxi drivers, street side vendors, and vendors in the market. They are mostly from the agriculture sector. Considering 43-million Thai workers, I think 18 million will be fully informal workers and another 18-20 million will be half-informal workers. So the growing sector will be the informal economy. Although, it’s growing in GDP, the Thai state has never formalized this informal sector. We never have had a formalization policy. The government used to prepare the farmer database to help them. Former Prime Minister Thaksin Shinawatra used to do that, and around 8 million people registered in 2004. It was a lending campaign. Another former PM, Abhisit Vejjajiva had the same thing for a revenue insurance policy. It turned out to be a similar number of 7-8 million people. These attempts have not continued. And the government has never persuaded them to enter the formal sector.”

just bring farmers to be members of co-operatives. Cooperatives can estimate farmers’ revenues, because farmers sell their product to the co-operative. It’s unusual to sell apples at the street side or during festivals. Mostly, they sell their products to co-operatives, and have them branded. The co-operative regulates their members in growing their fruits and sending products to shops. So, the farmer will register their revenue and be taxed once. Their agriculture, hence, is part of the formal sector. That’s why we do not see street side vendors in the western countries.” “Our co-operative is not efficient. We have only 5-7% registered from all farmers. They have a problem on management issues. In Germany, co-operatives will create their own banks, such as credit unions. The village fund is not necessary in the western country. They have a banking network as well. Banks in the cities need to make loans from co-operative bank and then lend the money to the businesses. We have no such system. We have never registered them into a formal sector.” “As for labor force, we have both registered and unregistered workers in the same factories. My student told me, the unregistered workers do not have public welfare. Employers try to save money by not paying additional monthly social welfare for these workers. I think Globalization expands the informal sector. Employers do not hire full time workers anymore and outsource instead. You will be contracted by the job. And if you get sick, I’ll not help you. The latest study found that globalization expands the informal sector.” “The collapse of the economy and bankruptcy in developed countries in Europe is also causing many more informal sectors.”

Do you agree with legalization on some underground economy, such as casinos or a 2 digits lottery?

“It’s a duty of the state to formalize the informal sector. They need to collect taxes for their budget. We call it bring it back to the system. But we cannot legalize an illegal business. You may allow legal casinos, but you need to suppress illegal gambling houses. We need to suppress illegal businesses, it’s a different issue. You can allow the massage business, but not prostitution. Perhaps, they will have drug trafficking, too, so you also need to suppress them.”

“If we think about the agricultural sector in western countries, in Scandinavia, in New Zealand, in Germany, they have large agricultural sectors. But why are their agricultural sectors formalized? They Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group or the Rockefeller Foundation. Copyright © Trendsoutheast 2009 - 2012. All Rights Reserved.

Dr. Pun-Arj Chairatana Dr. Apiwat Ratanawaraha Mr. Kan Yuenyong

Co-Principal Investigator

Dr. Donald Arthur Johnson

Editor

Mr. Preeda Chaiyanajit

Project Co-ordinator

Mr. Pakpoom Saengkanokkul

Trend Analyst

Mr. Passapong Boonlueng

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Regional Horizon / Environment Scanning (HS/ES) and trend monitoring for issues relevant to people. life, and regional transformation across the Sotheast Asian region. Mr. Preeda Chaiyanajit Dr. Apiwat Ratanawaraha Ms. Ashley E. Pritchard Mr. Pakpoom Saengkanokkul

Author

Dr. Charas Suwanmala

Information Specialist

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