Compound Capitalism: A Political Economy of Southeast Asia’s Online Scam Operations

Abstract

ABSTRACTIn the past few years, the online scam industry has undergone seismic changes. After emerging in Taiwan and mainland China in the 1990s, in the 2010s scam operations began to relocate servers and offices to Southeast Asia, especially Cambodia and the Philippines. While initially the majority of operations were small-scale and largely hosted in apartments, villas, and hotel rooms, in the second half of the decade they began to assume industrial dimensions, coalescing into bigger walled compounds often hosting dozens of companies, many staffed by workers held against their will and forced to perform scams. Drawing from extensive fieldwork and a set of in-depth interviews conducted with survivors of scam compounds in Cambodia, Myanmar, and Laos, this paper offers the first in-depth examination of the political economy of Southeast Asia’s scam industry, arguing that these operations should be framed as part of compound capitalism, a new manifestation of predatory capital.KEYWORDS: ChinaSoutheast Asiaonline scam industrylabor rightsorganized crime Disclosure statementNo potential conflict of interest was reported by the authors.AcknowledgementsThe authors wish to thank Sijia Zhong for her valuable help with this research, as well as Christian Sorace, Nicholas Loubere, and Diego Gullotta for their feedback on earlier drafts of the article.Notes1 Tan and Jia Citation2022; Zhuang Citation2010.2 Chang Citation2014; Zhuang and Ma Citation2021.3 Cambodia News English Citation2021a.4 Cambodia News English Citation2021b.5 Venzon Citation2023.6 Embassy of the People’s Republic of China in the Republic of the Philippines Citation2022.7 Casayuran Citation2023.8 Turton and Chheng Citation2017.9 Xinhua Citation2019.10 Manabat Citation2023.11 Senate of the Philippines Citation2023.12 The picture is further blurred by the fact that the Cambodian government generally refers to all illegal online activity as online gambling.13 Interpol Citation2023.14 Stevenson Citation2023.15 Ding Citation2023.16 OHCHR Citation2023.17 See, for instance, Zhang and Chin Citation2003; Zhang Citation2008; Chin and Zhang Citation2015; Lhomme et al. Citation2021; van Uhm and Wong Citation2021.18 The online scam industry has been absent from mainstream discussions of modern slavery until very recently. For instance, a prominent report on modern slavery released by the International Labor Organization (ILO) entitled Walk Free, and a September 2022 report by the International Organization for Migration do not mention scam compounds (see ILO et al. Citation2022). On the other hand, the release of the recent OHCHR report could be a sign that things are changing.19 Cyber Scam Monitor Citation2022.20 Southern and Kennedy Citation2022.21 These businesses collaborate with outside groups such as social media influencers, brokers, and human traffickers, to entice and facilitate individuals’ entrance into the compound, but this aspect of their operations is outside the purview of this paper, which focuses instead on the internal organization of these entities.We will offer a detailed discussion of these external connections in our forthcoming book (see Franceschini et al. Citationforthcoming).22 See, for instance, Keeton-Olsen and Nguyen Citation2022.23 Frontier Myanmar Citation2023.24 Podkul Citation2022; BBC Citation2023.25 Belinda Citation2023.26 Incidentally, the last sentence is a catchphrase associated with Xi Jinping, see Baidu Baike Citation2018.27 Keeton-Olsen and Nguyen Citation2022.28 See, for instance, China’s Ministry of Public Security Citation2019 and China Anti-Fraud Centre Citation2021.29 Faulder Citation2022.30 For this and the following anecdote, see Lo Citation2023.31 Singapore Police Force Citation2022.32 Gallagher Citation2023a.33 Gallagher Citation2023b.34 Das and McIntyre Citation2023.35 Cf. Franceschini Citation2020.36 Ong Citation2006.37 Slobodian Citation2023, 3.38 The name is a play on the Chinese word for “spinach” (bocai), which is a homophone for gambling (bocai).39 Tower and Clapp Citation2020; Cheng Citation2022.40 Smith Citation2003, 333.41 Crush Citation1994, 302.42 Bezuidenhout and Buhlungu Citation2011, 244.43 Van Onselen Citation1976; Crush Citation1994; Bezuidenhout and Buhlungu Citation2011; Phakathi Citation2012.44 Bezuidenhout and Buhlungu Citation2011, 23845 Chris Smith and Pun Ngai cite the South African compound labor regime as one of the ideal predecessors of this arrangement while also taking care to point out the differences, as mining compounds for Black workers in southern Africa were more coercive, as well as “racialized, colonial, male and factor restricted—accommodating workers close to where diamond and gold mines were located.” See Smith and Pun Citation2006, 1457.46 Pun and Smith Citation2007, 30.47 Ibid., 29.48 On this, see see Andreas Citation2019; Franceschini and Sorace Citation2022.49 See Fei Citation2020; Monson 2009; Lee Citation2017; Driessen Citation2019; Peng 2022.50 Fei Citation2020, 15. Ivan Franceschini has highlighted how this kind of spatial organization of labor dominated Sihanoukville’s construction sites long before the city became an online scam hub. See Franceschini Citation2020.51 Frontier Myanmar Citation2023.52 Zuboff Citation2019, 8.53 For instance, McKenzie Wark has graphically written: “Whatever disgusting and terrifying power lurks in these more recent stories does not so much eat bodies as brains. This combinatory works two ways: either your mind is erased and your body is another mind’s vehicle; or your mind is subordinated to the will of another power. Either way, your mind is not your own. It feels like some vile takeover. But what if this isn’t just a takeover, but a whole new class relation?” Wark Citation2019, 41.54 Gallagher Citation2023a and Citation2023b.55 Reuters Citation2023.56 This is a predatory loop of desperation exploited at both ends, a dynamic akin to the ouroboros snake eating its own tail described by Nancy Fraser in Cannibal Capitalism (Citation2022).57 The moniker “cyber slaves” has been employed in other contexts—for instance, journalist Geoff White (Citation2022) uses it to refer to North Korean hackers—but the term is now predominantly associated with the people subjected to forced labour in the online scam industry.58 Due to space constraints, in this paper we do not delve in detail into the fourth component of compound capitalism, that is, the desperation that drives many of these workers into the scam compounds. We include a detailed discussion of this aspect in our forthcoming book.Additional informationNotes on contributorsIvan FranceschiniIvan Franceschini is a senior lecturer in Chinese Studies at the University of Botswana. His current research focuses on Global China from the vantage point of Cambodia. He is a founder and co-editor of the Made in China Journal and The People’s Map of Global China / Global China Pulse. His latest books include Xinjiang Year Zero (ANU Press, 2022), Proletarian China: A Century of Chinese Labour (Verso Books, 2022), and Global China as Method (Cambridge University Press, 2022). With Tommaso Facchin, he co-directed the documentaries Dreamwork China (2011) and Boramey: Ghosts in the Factory (2021).Ling LiLing Li is a PhD candidate at Ca’ Foscari University of Venice, a project manager at Humanity Research Consultancy, and a regional consultant on Southeast and East Asia for the Centre for the Study of International Slavery at the University of Liverpool. Since early 2022, she has been intensively engaged with survivors of Cambodian scam compounds, interacting with local and international civil society organisations to bring them relief and repatriation.Mark BoMark Bo is a civil society practitioner who works globally with local civil society partners to monitor and advocate for improved environmental and social practices in Chinese overseas projects. He has published extensively on the trends, impacts, and regulation of Chinese global finance and investment, particularly with respect to land and natural resource rights and the environment.