Myanmar’s Scam Election Built on Scam Economy and Militias

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MYAWADDY — As Myanmar’s military prepares for its December 2025 election, The Diplomat warns that the vote is less about democracy than securing control over a sprawling scam economy. In a damning exposé, Tun Aung Shwe describes how the junta’s reliance on armed militias has transformed the country into a regional epicentre of cyber-enabled fraud, trafficking, and illicit finance.

Since the 2021 coup, the military has suffered major territorial losses and now leans heavily on militia allies like the Karen National Army (KNA) and Democratic Karen Benevolent Army (DKBA). These groups not only provide battlefield support but also run industrial-scale scam compounds along the Thai-Myanmar border, particularly near Myawaddy. Sites like KK Park and Shwe Kokko operate as fortified “company towns,” complete with dormitories, guard posts, and satellite internet.

The scam economy thrives on three pillars: protection rents from militias, forced labour through trafficking, and underground financial networks using crypto and stablecoins. According to U.S. estimates, Americans lost over $10 billion to Southeast Asia-based scams in 2024. In response, Washington sanctioned the KNA and its affiliates in September 2025, citing their role in shielding scam operations. The EU has also targeted individuals linked to these networks.

Yet inside Myanmar, the impact has been minimal. When Thailand cut power and fuel to border compounds earlier this year, operations resumed swiftly thanks to generators and satellite terminals. The scam model has proven resilient, shifting locations and adapting financially to evade enforcement.

Now, with elections looming, militias are being rewarded. The KNA and DKBA have pledged to secure polling areas in Karen State, and military columns—with militia backing—have retaken key positions along Asian Highway 1. This cooperation signals a quid pro quo: political legitimacy for the junta in exchange for continued tolerance of illicit business.

If regional powers like China, India, or ASEAN neighbours offer post-election recognition, the junta could claim external legitimacy despite lacking domestic support. The likely outcome, The Diplomat argues, is deeper entrenchment of the state-militia nexus—where scam centres flourish under military protection, and cross-border rescue efforts become increasingly difficult.

Myanmar’s upcoming election, far from a democratic milestone, risks formalising a system where fraud, repression, and militia rule are not just tolerated—but institutionalised.

-2025-09-17