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Informal and Illegal Movement in the Upper Greater Mekong Subregion

Lynn Thiesmeyer

Chapter 2. Informal Trade Areas, Borders, and Modern Economies

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1To contextualise the region within its larger political and cultural framework, the area known to antiquity as “Usa-ka-né” and later as “Suwannaphoum” (both meaning The Golden Land), stretched as a series of interlinked kingdoms from northeastern India to the Mekong Delta. During the medieval period it was dominated, in turn, by rule from Sumatera and by Angkor Wat. From the early colonial period until the incorporation of northern Thailand into Siam to form Thailand in the post-World War II era, most of the northern area under discussion here was known to its residents variously as the “Shan States” or as “Lanna” and was actively trading with its neighbouring, and ethnically related, kingdom of Sipsongpanna (Xishuangbanna in Yunnan Province) to the northeast. What we now call the “Greater Mekong Subregion” has become the large-scale modern political and economic matrix in which the northern areas described above, also known as the Upper GMS, are situated.

  • 8 See Walker, 1999, and Lieberman, 2003, for historical discussions of trade in the region.

2Smaller states within larger powers and fuzzy or porous borders thus have a long history in the region. Nowhere can borders be more porous than between two areas inhabited by the same or closely similar groups, where the notion of strictly separated national and ethnic identities is weak or absent. In this context we might also think of the border activity between Lao Cai in Vietnam and Yunnan Province in China, between Chiang Saen in Thailand and Houay Xai in Laos, or between Narathiwat in Thailand and Kelantan in Malaysia.8

3The traditional push and pull factors that were applied to longer-distance, longer-term migration take a different twist here. History, geography, and colonialism, as well as much newer features such as satellite broadcasts and cell phones, have long caused these borders to shift, become fuzzy, or in some earlier cases, disappear temporarily. More importantly, many of the people of Shan State in Myanmar still share the same first or second language and heritage with northern Laos, northern Thailand, and parts of southwestern China. Where even history did not fix a clear boundary, the mental boundaries between the Shan, known as Tai Yai, the Tai Lue of northern Laos, the Tai in Yunnan, and the Thai in Thailand remain porous to this day, contributing to expectations and efforts to find and maintain networks for introduction to employment and trade beyond the modern nation-state border.

4One obvious result is the current and visible influx of the region’s migrant workers and their goods into northern Laos, southwestern China, and northern Thailand. Further, their location at or near the borders of four countries—Thailand, Myanmar, Laos, and China, all countries that actively seek labour from neighbouring countries—means that they will be aware of seasonal job opportunities and in some cases able to fulfil the requirements for crossing the border legally, whether the goods they transport are legal or not. Finally, as shown in this research, border people’s movement is not in one direction only. Petty traders, workers, and itinerant farmers move among all four countries when the opportunity arises; some make day trips as carriers to earn money or barter such goods, returning to their home villages in the evening.

5The intangible factors in the ease and frequency of border trade, then, are those of expectation and of indefinable kinship, relatedness, or, as one Shan informant put it, though he was geographically quite far from the border, closeness. These are effective push factors for those seeking to cross borders to work or transport goods, and at the same time they are equally important to the employers and contractors who seek labour and carriers from all sides of the border. Our fieldwork showed that many border workers do not, in fact, experience much improved earnings or living standards as a result of their transborder activities, and some are even subject to exploitation. Yet despite their awareness of this, many continue to take their chances in informal and illegal activities, based on their continued expectations and on the possibility of expanding their orbits of economic activity to replace the shrinking agricultural activity of the region. This indicates that in order to grasp the position of cross-border informal and illegal trade in the Upper GMS, it is now necessary to know quite a bit more about the expectations, livelihoods, and abilities of both the traders and their employers and buyers. Many of them are now engaged in “border industries”, that is, irregular employment opportunities provided by small factories, small transport companies, and small markets for informal and illegal goods at cross-border locations as well as farther into the interior of each country. Further, this research looked at the patterns of use of the cheap and illegal goods that are produced for the border trade, and which are beginning to replace the earlier self-production and self-consumption patterns of the rural communities.

6The legal and illegal, formal and informal movements of people and goods in this region continue to move in patterns and networks that follow the long-established routes of the intermeshed kingdoms described above. These transcend what are now the political borders of these four countries. In their stead, there are movements within larger, encompassing spheres that must, for their survival, ignore or obviate the legal and political boundaries of the modern nation-state. The illegality or otherwise of these movements, then, is the first issue to be interrogated in order to provide the conceptual framework of the discussion. Briefly, the grey areas of legality / illegality into which certain persons, their roles, and their commodities fall, mimic the situation in which modern boundaries and their formalities are ignored or bypassed in order to attain and maximise livelihoods. Their “economies” are not only the economic activities defined by economists or the state, but are multiple and shifting, and cover a wide range of life and social practises that enable survival. What concerns us here is the ways in which such economic diversity, and the potential for choice among different means of participation, are influenced by globalisation and by unsustainable economic paradigms based on insufficient knowledge.

1 - Movers, Transporters, and Consumers

7As mentioned earlier, many of the current cross-border workforce are part of border communities, including ethnic minority communities, engaging in upland cultivation that includes both cropping and forestry. Now, as workers who produce and transport the constantly cheapening products, they must possess new and complex understandings and behaviours in order to navigate the legal and economic labyrinths of such informal, small-scale, irregular employment. The present research surveyed representative samples of rural border dwellers who now form the pool of cross-border labour in being both the transporters and the consumers of the new, cheaply made goods in the GMS region. Another common feature of the “border people” of these four nations is that they are largely low-skilled and originate from rural agricultural backgrounds. More strikingly, many of them had recently become landless. The sample population focused on upland communities on the borders of these countries, in particular where the Asian Highway Network has transsected and now displaced their traditional livelihoods.

  • 9 The Global Commission on International Migration stated that “Trade has an important role to play (...)

8A tension or conflict surrounding informal movement and trade in this diverse region is that between the tendency of the modern state to “sedentarize” populations, services, and production processes, and the modern economic necessity of both rich and poor to move them around.9 In this framework, the border territories under discussion here are particularly contested. The borders between China and Myanmar (2,192 km), Thailand and Myanmar (2,096 km), and China and Laos (423 km), having been until recently “mandala”-style buffer zones, or overlapping domains with porous borders, are particularly long and heavily forested, thus allowing practically invisible trade and movement. It is not the entire forest area, however, that concerns us here, but rather the well-used points of entry and exit for local and informal livelihoods. Against the continuing state policies to sedentarize both mainstream and minority residents there is the daily flow, by foot and car, of hundreds of thousands of people and the hundreds of thousands of goods and products that they carry.

9The borders, in addition to the internal network of ever-expanding domestic and trans-border highways, are the most heavily trafficked and transversed routes in the region. It has become apparent that the GMS borders, rather than simply presenting obstacles or restrictions to the flow of goods and people, are also themselves the conduits and the territories of movement. The border is no longer, as it was only briefly, or perhaps only ever was in imagination, a thin line marking the division between territories, official languages, laws, and tariffs. It is once again a territory of its own.

10As a construct, national territory and the nation-state, whose jurisdiction is defined by its borders, depend on the citizens’ and neighbours’ acceptance of the border – an invisible, intangible political entity – as marking the limit of one legally binding jurisdiction and the beginning of another. As just such a constructed entity, territory and its borders are:

  • necessary to movement, to the transgression of the boundary itself;
  • revelatory of a perceptual, as well as economic, conflict or multiplicity;
  • indicators of the direction or flow of movement; conduits of movement.

11In order to research the movement of goods, then, it was also necessary to research concurrently the movement of persons. The vast majority of illegal and informal goods moved within the GMS border regions are moved almost entirely by human carriers. Rather than an impersonal and directionless flow of persons and goods, as within some larger historical movements, these movements tend to have their roots in personal and social capital networks that are part of extended and historically long-lived economic communities.

12Given this fact, we can first of all categorise border trade-traffickers in livelihood terms as people who move; people who move things; and people who need these things in order to move, in various meanings. They may try to move away from their origins or from poverty, or to move up economically and socially; in other words, to move across various boundaries of a tangible or intangible nature in order to move on in their life strategies, and even, in some cases, to move back.

  • 10 See, for example, Pécoud and de Guchteneire, 11 and 13.

13Whether these movements are accomplished legally or illegally, then, is not the question for those who move. The real question is what factors drive these participants in movement, what strategies they access, and what processes result from their choices to move themselves and their goods. In broad terms, migrants and trade-traffickers, especially those who move or are moved illegally or informally, need networks to accomplish their goals of movement. They continuously participate in, form, and re-form such networks, from the narrow networks of relatives and village neighbours to the larger networks of traffickers, brokers, and travelling companions who facilitate their journeys. Further, they produce, move, sell, and access goods and commodities of varying degrees of legality through such networks. Previous research has tended to categorise goods that move and people that move as two separate issues. The literature on migration, for example, largely avoids mention of goods, and vice versa.10 If it does, it mentions trafficked goods in a similar way as trafficked people, in analyses of the functions and activities of traffickers and their networks. What is striking about contemporary movement in the Upper GMS, however, is that migrants, transporters, and consumers often converge into the same entities.

2 - Minorities and Border Dwellers in the Border Economy

14The preceding section has looked at the practical issues of costs and employment: lowering costs while maintaining or even increasing employment opportunities in undeveloped areas of the Upper GMS borders, even in the face of the global economic recession of 2008-9. These have their positive, and measurable, contribution to the border economy but also to the national economy as well. China continues to post earnings, in terms of GDP, of approximately 10%, which are directly based on the amount of production and consumption of goods domestically, including in the agricultural sector. It also boasts a rising PMI (manufacturing index), again, based on the existence not only of large manufacturing firms but of the small enterprises that locate, produce, and sell goods that are very cheap, and possibly substandard, in the border areas.

15In terms of both transport and consumption of these low-end, hazardous products, however, there is one more group of producers and consumers, or users, of informal and illegal goods that must be examined in the context of development, law, and income inequality. These are the members of the ethnic minorities that are the most populous in the border areas. Due to economic considerations, they are most likely to seek income by providing raw materials to small enterprises and in turn to use the hazardous materials that are produced. There were five ethnic groups predominating along the border that this study undertook to interview, and they had in common a severe and rapid loss of land, low educational and skill levels, and, in the case of four of the groups, the legal right—whether this right is in reality protected or not—to enter or remain in areas of the greatest resources and raw materials (timber, soil, and minerals). They are:

  • the Shan of northeastern Myanmar, who now also live and work in agricultural production and local markets in northern Laos and Thailand (and to some extent in Yunnan Province);
  • the Lahu in northern Laos (and in Yunnan Province);
  • the Akha in northern Laos (and in Yunnan Province);
  • the H’mong in northern Laos (and in Yunnan Province);
  • a related cluster of groups consisting of the Tai Dam and Khmu of extreme northern Laos who cross the border almost daily for personal, small-scale sale of their own products and purchase of cheap household goods.

16Other groups predominating in the area, including the Lisu, were also involved in border-crossing activities, but in this survey were doing so mainly on the Myanmar-Thai border, so their case is left for future discussion.

17The total estimated population of these groups, whose members were among our informants, in the Yunnan – Shan – Laos border area is as follows:

Shan: China, 300,000; Myanmar, over 5 million; Laos, 47,000
Lahu: China, 450,000; Myanmar, 150,000; Laos, 10,000
Akha: China, 1.5 million; Myanmar, 180,000; Laos, 30,000
H’mong: China, 3 million; Myanmar, under 10,000; Laos, 400,000
Tai Lüe: China, 1.5 million; Myanmar, 200,000; Laos, 119,000

18Thus, although these minorities occupy areas of nations as minorities that have many millions, their own presence in the border trade and trafficking is considerable. It is necessary to include their socio-economic drivers in light of their work in providing, transporting, and consuming hazardous or illegal materials.

19In a lengthy interview in northern Laos with a group of settlers from China, who were close to the illegal cross-border trade in timber and timber products, provided evidence of upland minorities’ prolonged, systematic, and lucrative trade in timber with China, Thailand, and Myanmar despite presumed knowledge of its illegality. Foresters and Montagnards—the upland ethnic minorities listed above—were requested, and paid, to cut timber and either transfer it directly to Chinese and Thai buyers within Laos, or transport it themselves to the border with China. A trip to either border in the vicinity of this interview would take very little time, given the mint condition of the new North-South Economic Corridor (Asian Highway No. 3). Under two hours on the provincial road would bring any vehicle to the highway itself, and from there to the border at Boten would be less than thirty minutes. In the other direction, almost due north, a journey of slightly more than one hour on a paved road would bring a vehicle to another border point, this time a smaller and less strictly checked one. Further, as of the end of 2009, once on Highway 3 it would take only three hours or less to reach the Thai border on the Mekong River. As a local Lao official commented, “What used to take five days now takes three hours.” And whatever enhances legal transport also enhances illegal transport.

20Second, the spread of contract farming in rural areas of Southeast Asia, particularly in Laos, has begun to show both positive and negative outcomes. Although research on contract farming has begun to be undertaken, it has necessarily focussed mainly on contract farming offered by privately-run, well-known agribusiness firms like CP (Charoen Pokphand) and Mitr Phon of Thailand, where the management, practises, and organisation of contract farming can be transparently followed. Along the northern Lao border, however, contract farming opportunities are provided both by such well-known firms and by lesser-known Chinese investors from many diverse parts of China. Some of them would say that they are offering contract farming, while others simply contract with the government of Laos to lease large tracts of land and then hire local labour on an ad-hoc basis. In the case of the Chinese firms or land-lessors, both low-skilled Chinese labour and local, minority Lao labour are hired.

21It is important to note here that the incentive to seek jobs, for upland minorities as for their lowland rural counterparts, is the loss of assets that have not been replaced by any others. In this case the asset is land. In the cash-poor economy of upland northern Laos, there are still minority villages where cash is almost non-existent, but the right, whether de facto or de jure, to access productive land still exists. Survival, in this sort of non-financial economy, has depended on land and its products, whether forest products or cultivated crops. Ironically, however, the very enterprises and development projects that might provide some amount of employment to northern Lao and to minority villagers, are the schemes that most deprive them of land. Unfortunately, it is not an equal exchange. The loss of land to other owners and other uses is not, by any measure, compensated by the irregular and below-minimum wages that such villagers can earn from the new schemes.

  • 11 See Epprecht, Minot, Dewina, Messerli, and Heinimann, 29 – 32.

22Where ethnic minority incomes have been measured or estimated, as in Thailand, the average per capita and household incomes of northern minorities were until recently less than 25% of the national average. In Laos, it has so far proved impossible to measure northern ethnic minority income. The northern provinces, however, are given as among the poorest in the nation, and if we use the government’s poverty line for rural areas, we see that northern residents are well below it.11 Even within the town of Muang Sing, where more urban types of employment are available, informants stated an average of U.S.$40 as the monthly income, which is still far below the national average. Further, as there has been no complete census of remote villages, and as minority ethnic groups’ birth rate is very high, even a rationally estimated per-person or per-household income would be higher than the reality, given that there are more people, and more persons per household, than the baseline data. Also, as mentioned above, it is quite common for the residents of the mountainous areas of the north to have no, or almost no, cash income at all. What makes this situation much less sustainable than before, however, is not only the loss of mountain, forest, and lowland to new plantations and other kinds of development. It is also the inevitable absorption of northerners, including ethnic minorities from remote villages, into the modern polity and economy, necessitating cash expenditures for basic goods as well as for education and health care. The extreme handicaps, in this transitional economy, of not being able to produce one’s own food and of not having had an education or being able to speak the majority language, drive northern ethnic minorities to perform the illegal provision of timber and minerals as well as to transport them and, finally, to consume the hazardous goods that they bring back from China. They, like the majority Lao of the northern provinces, have no other choice of livelihood at the present moment.

3 - Objectives: Closing Gaps, Opening Channels

  • 12 Pécoud and de Guchteneire, 18.

23The gap between “local” needs or behaviours—even if they are regionally widespread—and national or international regulations continues to exist wherever little or no attempt has been made to incorporate local knowledge into policy planning. It has even widened, in some cases, due to the impact of economic globalisation: “globalisation may erase some borders while erecting other ones”.12 As will be discussed below, a major example is the Laos customs laws. Though attempting to facilitate legal, and halt illegal, trade, they are difficult to implement and favour more wealthy investors who can pay customs taxes.

24Attempts to close the gap are being made by a variety of institutions and stakeholders. The UN, the International Monetary Fund, and the World Bank call these attempts “bridge initiatives” when the discrepancy is based on misunderstandings of needs and on communications difficulties, or when its roots are in power differentials among stakeholders in differing economic and social situations. What such initiatives seek to do is to mediate, or “translate”, between local persons, local environments, or any local effects of globalisation and the very different “vocabulary” and development goals of international donors and investors that can result in unsustainable policies (Easterly 2002; Sato 2002).

  • 13 Pécoud and de Guchteneire, 7.

25The major gap in knowledge in the present circumstance is our lack of knowledge about the regional and local economies and trade of the Upper GMS, and how they reflect livelihood strategies. These “economies” are not only the economic activities defined by economists or the state, but are multiple and shifting. They cover a wide range of life and social practises that enable survival, and for this reason they are based on quite different, and locally rooted, understandings of “legal” and “illegal”. As Pécoud and de Guchteneire point out, “border controls can be more a matter of symbols than of actual results. [...] This may lead to a self-perpetuating process: border controls create problems (such as smuggling or trespassing), which then call for more control. In this respect, border controls are policies that generate visibility but little results”13.

26What concerns us here, first, is the ways in which such economic diversity, and the potential for choice among different means of participation, are influenced by globalisation and how more sustainable economic paradigms could be evolved when based on more sufficient local knowledge. Let us first look at our own theories about economies. From Adam Smith to Joseph Stiglitz we have, in the western paradigm, theorised or implied the existence of binary economies and produced binary explanations within economics: macro, micro; rural, urban; local, national (or local, global); informal, formal; theoretical, practical; modern, pre-modern; or pre-modern and transitional. None of these is very specific about the daily lives of the people who live in such economies. Further, when dealing with developing, or resource-poor, as they are currently known, regions, we strive to come up with ways to maximise their resources and benefits, to minimise their risks and opportunity costs, and, presumably as a necessary condition for these two, to empower them with political and social participation and, more importantly, with something called the “freedom to choose”. When these fail, we rather empower ourselves to intervene with aid in order to stop conflict (or to stop the blocking of the trade in their resources) and to supplement basic needs that are lacking.

  • 14 Amartya Sen, in Development as Freedom, uses the term “economic unfreedom” to describe such situat (...)

27The rural majority of Asia’s population, however, does not experience these things in this way. Starting with conceptually the easiest of the features above, freedom and choice do not mean the same things in a situation where material choices are either extremely constrained, or are choices between two undesirable outcomes, or are tied to profound personal and family sacrifices offered to those who can confer a small or temporary measure of needed resources.14 In turn, these personal or family sacrifices are not opportunity costs, because they do not buy real and sustainable opportunities through the investment of some part of one’s expendable resources. They are deficits, losses, or damage incurred often without means of repair. Third, the opportunity deficits are not made only on the basis of a (situationally or culturally appropriate) rational assessment of risk. We are talking about people whose risks have already been actualised. For someone who has insufficient access to food, malnutrition is not a risk; it is an actuality that must be dealt with in whatever way possible, whether legal or illegal. The risk involved in what is considered by the modern nation-state to be illegal border activity, including trafficking, smuggling, and trade in illegal goods, is to the local trade-traffickers quite a low risk when compared with the fact that they have lost land in China or Southeast Asia and have no access to waged employment.

28Risk assessment in this context is, then, the luxury of individuals or businesses that can choose not to have their risk turn into actuality. Minimising risk is not an issue for populations who are already in disaster or destitution. And thus neither is maximising benefits. The closest thing to the idea of benefit that we may be able to employ here is the individual’s or community’s limited capacity or momentary chance to avoid destitution, starvation, or displacement for one more day or season. One thing has become certain among poor regions under the current kind of globalisation: their burdens of work, of environmental degradation, of loss of resources, and loss of basic needs within the larger community have measurably increased.

29We might well analyse the identification, by outsiders, of cross-border legal issues such as trade and trafficking in the same terms, in order to interrogate their origins and their purposes. Four conceptual and policy structures characterise these modern legal concerns: the ways of identifying threats to human security; of linking these threats to so-called regions of insecurity; of specifying or reinforcing a perceived relation between economic under-development and harm or insecurity; and, most importantly, of designating those who are qualified to remedy the problem, normally those who are not from regions or backgrounds identified as having those particular issues. These last are those who will feel that they must intervene, from a global or national standpoint, in the laws of other states on the basis of such concerns. What we must think about, then, is what kind of interventions these are, and how to think about evaluating them as producing sustainable or unsustainable results.

30Specifically, the concept that trafficking in goods is an illegal activity must be thoroughly examined in light of the socio-economic drivers in the Upper GMS that underlie such practises. Policy recommendations that aim simply to suppress certain activities or remove certain sources of livelihood without understanding underlying motivations or offering alternatives must, without question, fail. If we wish to avoid conventional thinking about interventions in “less developed”, or “more hazardous / illegal” regions, and the international policies it has generated, we need first to realise that outside purposes and planning still tend to replicate the earlier international structure of overseas economic aid, beginning with colonialism and continuing with post-war economic growth models based on western aid and trade. These focused on cross-border economic relations at the national and international levels, not on governance; as well as on the right (though currently the less disputable term “responsibility” is used) of developed nations to intervene in the economies of the less-developed. This leads us to our first question: Why do foreign, developed-nation legal initiatives, such as those against trafficking, intervene in the economies of the less-developed nations, rather than in their governance?

31First, although few such initiatives mention economics specifically, their ultimate concerns are income, education, environment, public health, and political stability. The eradication of human rights violations such as human trafficking, and of corporate rights violations such as goods trafficking, is seen as a fundamental and necessary step towards resolving these other basic needs issues. Yet these basic needs are, and traditionally have been, identified, quantified, and addressed by policy in terms of their impact on national and global economies. What concerns us most here is that such policies, whether purely economic or not, have so far shown themselves incapable of preventing or arresting newly perceived livelihood issues experienced by these states’ local populations. What remains in rural Southeast Asia, after more than sixty years of intervention by developed nations, are resource insecurity, internal and cross-border displacement including migration and illegal trafficking, and re-emergent public health problems. Moreover, there is a widening gap between the growth in monetary value of the manufacturing sector in the region and the value of its subsistence and export agriculture, which still employ the majority of its people, as can be seen in the differential contributions of the two sectors to each GMS country’s GDP. In other words, even where rural, border-area productivity remains, it is becoming increasingly undervalued. We have learned that the undervaluing of productivity—the failure to recognise the value of local economies and life practises in general—is one of the most serious, ongoing errors in development. It is, in fact, the main error that severely hampers our ability to understand and cooperate in sustainable economies across national boundaries.

32In many cases, legal and rights-based issues that have been “newly” identified are actually related to policies to enhance economic growth and exports in developing countries. Legal issues related to cross-border trade are no exception. Yet paradoxically, it is these policies that often lead to greater movements and trafficking of destitute or unskilled populations, and greater movement of hazardous and illegal goods in order to replace the local subsistence and resources that have been lost or transferred to private-sector enterprises and extractors. The local economic and social backgrounds to human and goods trafficking in the 21st century have, as will be shown below, arisen among rural border dwellers from the new poverty spirals of landlessness and joblessness. Within the present focus of this research, then, we must try to incorporate a new understanding of new local and daily insecurities and shortages in order to gain an understanding of the increased and diversifying nature of trade and trafficking. These local human insecurities are multiple and overlapping, and require a holistic approach in conceptual thinking as well as in policy.

4 - Conceptualising Movement

  • 15 This is not only in terms of their not having been demarcated in modern or Western terms until app (...)

33There are two key factors here that have continued to influence the form and function of the nation-state borders now demarcating the region into four separate political entities. The first is the historical and social fuzziness of the borders.15 The second is the perceived necessity, under colonial rule, of borders by means of which not only the colonial rulers but their local and regional proxies could lay claim to natural and human resources within them. Yet this sort of demarcation remains in contradistinction to the traditional political practise of centring the strongest rule within an outwardly-radiating sphere of influence that could overlap or interface with other spheres of influence at its outer edges without necessarily producing conflict.

34One such academic explanation of socio-economic and spatial organisation in the Chinese sphere was Skinner’s (1977). Historically, according to Skinner’s notion, Chinese society was “cellular”, with a market town as a “nucleus” that localised, or grounded, a “trading area” surrounding it. Skocpol added that such “marketing communities”, rather than pure or isolated villages, were the spaces of all significant transactions, both financial and non-financial: goods, services, repairs, commissions, informal loans, partnerships, and the “interfaces with the larger society” (Skocpol 1979, 149). More recently, historians and anthropologists have conceptualised the socio-economic spaces of China and its southern borders as a formation of overlapping domains with porous borders. In Southeast Asian studies, such a formation has been termed the “mandala” shape of rule (Wolters 1999), and its member territories “galactic polities” (Sturgeon 2005; Steinberg 1985; Tambiah 1977). The idea of the mandala, or galactic polity was once used to explain the nature of grey-zone-bordered rule among competing polities, large and small, in the region (see also Sturgeon, 65).

35Persons or goods that moved within such a mandala could do so on a small scale, interacting, working, and sojourning with those of the same or related ethnicities and practises; or on a larger scale for purposes of more systematic trade and diplomatic or military dispatches on the basis of mutual cooperation between the overlapping mandalas. Benedict Anderson took up a similar theme in Imagined Communities. Anderson framed the border territories as buffer zones whose precise demarcation and ownership were unnecessary, or would even have been counterproductive to peaceful relations among neighbouring kingdoms. His work linked the imposition of the modern political notion of boundaries and their mapping to the formation of the contemporary nation-state, which, nonetheless, remains an “imagined” (or artificial) community in contrast to the lived, concrete spheres within spheres of smaller tributary states belonging to larger ones, often more than one at a time. It was, and still is, through these pre-existing spheres that traders and entrepreneurs, diplomats, exploring expeditions, foot soldiers, foresters, and farm labour from all over the region regularly move. Building on Anderson’s argument, Winichakul (1999) and Ivarsson (2008) showed how the carving out of a previously non-existent national border in Thailand and in Laos occurred in the context of colonial and anti-colonial relations, but resulted in what continue to be perceived, at both the national and the very local levels, as losses of territory or unnatural, and unnecessary (historically unfounded), bifurcations of territory. What concerns us in these arguments is the persistence, whether in researchers’ perceptions or “genuinely” in the perceptions of border dwellers, of border territories as areas that should not be strictly bounded—nor are they now, given the actions and strategies of livelihood-seekers on all sides.

36Thus one of the underlying research questions here was, can this pre-colonial notion of the mandala or galactic polity still be applied to the shared borders of the GMS countries, and if it can, does it do anything to explain the region’s new economy, dependent on the ease and frequency with which enormous numbers of persons and goods daily cross these borders? Have the borders of the six GMS countries become, once again, invisible to those who use them to leverage trade and employment opportunities—even as the workers and traders themselves become, once again, the focus of legal and economic concern on the international stage? Has Ken’ichi Ohmae’s theory of the demise of the nation-state in favour of regional economies (Ohmae, 1995) come true?

37The persistence of the physical networks is evident. Hundreds of years ago, Yunnanese trade caravans to the east, and Tibetan ones to the west, carved out the interlocking network of trails and tracks that became, in turn, the colonial exploration trails, expansion routes, and post roads for colonial trade, and then the Second World War access roads. They next became the access roads of the independence wars, then the Vietnam War transport routes, and subsequently, though not finally, the unpaved and narrow, and now paved and broad, Asian Highways of the present era.

38Given this historical and very tenacious background, what we are concerned with here is the continuation of smaller-scale, but far more numerous, movements that involve their participants and goods in a network of related and overlapping spaces stretching and thinning out along East – West and North – South corridors from their westernmost point (in northeast India) to their easternmost (in northern Vietnam). The present survey of the contemporary networks and relays that make these movements possible for their participants is based within the historical, and still present, human context for and necessity of the freedom of movement within the region irrespective of contemporary borders. This necessity can be politically, economically, or culturally based; that is, the push factors can be any or all of these three. But the means by which the movement and trade are accomplished are both tangible and intangible networks, those that were followed here. These networks are facilitated by the modern networks of roads, vehicular transport, and mobile phones, but they are rooted in the traditional ones of historical and cultural contiguity as perceived, and exploited, by the participants.

39Within this background, therefore, laws on illegal movements and illegal trafficking cease to have a clear mandate:

There is a growing consensus in the community of states to lift border controls for the flow of capital, information, and services and, more broadly, to further globalisation. But when it comes to immigrants and refugees [...] the national state claims all its old splendour in asserting its sovereign right to control its borders (Sassen 1996, 59).

40Trafficking is illegal simply by definition, and its illegality is partially or entirely based in the modern notion of the nation-state border, which was drawn without the consent of the local persons and communities that it bifurcated. Similarly, the political and economic issues involved in crossing the border—payment of tariffs, right to enter, right to reside, and right to work on the other side—are often treated by migrants as inconveniences that were established not necessarily for the benefit of those residing, producing, selling, or working along the contemporary borders. Thus the issue of cross-border, rather than internal or domestic, trafficking is itself comprised of two issues: first, the question of whether the trafficking is illegal only because it ignores the contemporary border in favour of more traditional borders, crossings, and trade; and second, whether it is illegal because it causes undue harm to persons, resources, or assets, including the natural environment.

41In this study both questions provided the basis for the research, by using the first question on borders to evaluate what could become more realistic options for development policies relating to intra-regional movement. It is not only the low-level traffickers and the ordinary consumers who ignore the rules pertaining to contemporary borders; it is also, in many cases, the officials who staff border checkpoints and who realise that enabling such trade contributes to at least the short-term economic benefit of residents on both sides. In particular, the global financial crisis that began in 2008 has severely impacted small-scale producers whose products were earlier available to the export markets that have now rapidly shrunk. Their survival strategies under such conditions include the exploitation of both physical and cognitive infrastructures to maximise benefits; or, in the absence of present benefits, minimise costs and provide the potential for future re-expansion of networks and tradeable commodities.

42Laos shares linguistic, religious, and environmental features with Thailand and northeastern Myanmar. Its very small and young population means a small and under-educated workforce. Although it is also an agricultural economy based on rice cultivation, the large area of mountains mean that remoteness and lack of infrastructure and social services still affect much of the country’s area. Two earlier rapid surveys in Laos yielded the following in terms of issues.

  • Rural environment: deforestation; water and its diseases (mosquito-borne)
  • Public health: lack of access to adequate public health facilities; maternal and child mortality, water-, insect-borne diseases; HIV; transport-cost-related rises in food costs leading to food shortages
  • Education and training: gaps by location and socioeconomic level leading to lack of labour skills
  • Employment, income, markets: few economic opportunities, leading to labour migration (internal, both urban and rural, and external)

43There is a similarity of these issues and outcomes among all six GMS countries, where one would have expected more differences. Was this a result of having formed rigid hypotheses that affected the surveys and outcomes, or of survey categories so broad as to be meaningless? Were the similarities externally caused as a result of a levelling or universalising caused by a process vaguely known as “globalisation”? Had my informants themselves mastered the current rhetoric of development to the extent that they all harped upon the same themes?

44Though these suspicions are not without grounds, there is another way to view them. After all, these are superficial outcomes, the broad outlines of contemporary Southeast Asian local issues from which we ought to proceed to deeper analyses, better predictions, and the invention of more reliable indicators. The reason for their being shared among otherwise diverse regions of Asia was the same as the reason for the successful initiatives that seek to remediate them. In addition to the old local-national dichotomy that researchers and development planners used to rely on, there is now another kind of nexus among people, places, and events. This is a meso-level connectivity that no longer opposes the local to the national but brings in equally the cross-border, the regional, and the very micro-level of interactions. These are made possible by the new human networks operating in conjunction with new technological and micro-economic networks that span the region and involve its people and their issues in not one web, but webs of overlapping (and differing) needs, experiences, and efforts.

5 - Networks of informal trade

45This survey showed that the human networks and infrastructure networks in this region tended to work closely together for informal and illegal trade. Though not always overlapping, they ran parallel. Some informal and illegal traders use the new Asian Highway, where Customs checkpoints are strict and stratagems to avoid inspection and taxation must be handy. More use the old roads, forest tracks, and river crossings that often run parallel to the new highways, mobilising their own experiential knowledge and that of their cohorts to cross to and from markets accurately and safely. In the countries under discussion, the urban centres have greater access to, and greater capacity to produce and enhance, technological resources, while rural and border areas enjoy greater access to and creation of human networks. These include networks that facilitate movement and trade. The participants seek ways to link these two kinds of capacity, and in so doing, utilise the GMS borders as sites of the linkage.

46Southeast Asia has historically been a region where the movement of people, especially for labour, was traditional and of a high volume. The fact that the majority worked in rural areas meant that seasonal migration during periods of non-cultivation was customary. Under the economic changes brought about by globalisation, both push and pull factors have strengthened along with the building-out of new industries from mega-cities to their peripheries (Sassen 2002). Cross-border labour and transport are much more in demand, and have more destinations, opportunities, and incentives for moving. This results in the creation of vaster and more complex human networks that begin at the village level to relay their members and their goods to distant workplaces and markets, often placing them in networks of other people from “back home”.

47Interestingly, there is now labour migration and trade where earlier there had been ethnic migration and trade (migration to visit with relatives and exchange goods on the other side of a modern nation-state border). In other words, one of the findings of this study is that it is not only poverty and conflict that are push factors in migration and border trade. Intra-regional behaviours also treat the border more as a modern obstacle than as a natural demarcation between ethnicities, languages, or cultures (cf. Winichakul 1994). Some recent migrants therefore reproduce the older pattern of moving within a larger area or mandala of related ethnicities and production economies (Wolters 1999) that include their ethnicity and its closest branches, but involve more intensive and repeated work and trade patterns under employers or contractors.

Planned and Existing Asian Highways

Planned and Existing Asian Highways

Source: UNESCAP 2004.

6 - Socio-Economic Incentives for Border Trade

48The framework of the study in terms of the overland transport of goods and its relation to current socio-economic conditions is illustrated below.

Framework of the Study in Terms of the Overland Transport of Goods and its Relation to Current Socio-Economic Conditions

Framework of the Study in Terms of the Overland Transport of Goods and its Relation to Current Socio-Economic Conditions

49Apijanyatham (2009), in her discussion of Shan migration, framed the general circumstances of recent movement in terms of human insecurity in the rural border regions. Her discussion is re-framed below. If we conceptualise present-day human movement as a phenomenon in which not only people, but the goods that support their livelihoods, are moved or carried by migrants and cross-border actors, we can see the overlapping applicability of the human insecurity factors below to the incentives to engage in the informal goods trade in the Upper GMS. The list below is revised to emphasise the negative socio-economic incentives of locally hired carriers and transporters of informal goods.

Economic Insecurity

Low wages and delayed payment; excessive working hours

Food Insecurity

Undernourishment due to lack of nutritious food

Health Insecurity

Inaccessibility to domestic and cross-border health care; poor sanitation at accommodations

Environmental Insecurity

Insecure / unsafe workplace and work conditions; continuous, unprotected use of toxic chemicals and hazardous materials

Personal Insecurity

Physical, verbal, and economic coercion by employers and contractors

Cultural Insecurity

Barriers to preserving local traditions; language or dialect barrier

Political Security

No public space for participation in policies that affect themselves

Source: based on Apijanyatham, 2009.

50A schematic diagram of the focal points of this research, from historical and factual background through the conceptual framework and the contemporary socio-economic drivers of the trade and trafficking of informal goods in the GMS, is given on the next page.

51This simple chart can be used to clarify two things, if we look at the right-hand side. One is that the perceived costs are mainly borne at broader and higher levels of government and enterprise, while the perceived benefits in the short term accrue mainly to the individuals and local residents who engage in border trade. For policymakers, then, who are in the category of government and enterprise, it makes sense to have clear and rigid legal definitions of illegal goods and trade. This survey, however, concludes that the benefits to local individuals also prove beneficial to the GMS nations and ASEAN economic co-operation in general, by reducing welfare or legal costs involving those goods transporters who have already lost farm livelihoods; by providing cheap and abundant labour and transport mechanisms for cross-border trade and smuggling; and by providing cheaper products and services to expand markets and the consumer base.

7 - Legal Definitions of Cross-Border Goods: Traded and Legal or Trafficked and Illegal?

52The goods listed below that can be observed at local markets on all sides of the border and can be observed in transit being carried by individuals, fall into grey areas. These are not high-volume illegal goods, nor are they clearly illegal and harmful goods such as narcotics and weapons. They are goods for local, personal, or household use. There is a wide range of unclear or disputed legality regarding these goods.

53In most cases this has to do with the fact that all the countries involved have environmental regulations designed to protect the environment from toxins, and regulations to exclude such harmful materials from import; but there is no specific definition of which materials, in which amounts, in which manner of use, are harmful. (See the Appendix on Lao law at the end of the paper.) These countries also have regulations about the export of domestic timber and the import of counterfeit goods. But the trafficking of these items also falls into a grey area due to the provisions of “personal use” of goods and of timber, which is legal in all countries; and, in the case of counterfeit goods, the necessity of the wronged party—the legal producer of the real and perhaps patented items—finding and inspecting the counterfeit ones and suing their producer. As a result, there are ill-defined areas involved in the legal definition of “personal” transport for “personal” use, as well as in the definition and measurement of the amount and type of harm necessary to classify goods as hazardous illegal goods.

54First, there are a number of issues in defining the legality of the process of transport when the items are deemed as being for personal use. They can be carried by hand or on one’s person, or in a farm-use pick-up truck or wagon, or by bicycle. Generally, the grey area of legality is the situation where local persons are employed, or employ themselves as carriers and transporters in small (petty) trade of goods that can be claimed as personal use. Carriers make use of personal means of transport; they bear personal responsibility for items brought over; and they usually have a personal knowledge of border officials. Article 47 of the Lao customs law states, in regard to the import of goods: “The people temporarily entering the Lao People’s Democratic Republic with non-prohibited personal belongings shall be exempted from customs duties provided such goods are re-exported within the authorized period of stay”. This would enable the cross-border trafficking of goods on a small scale, individual by individual, without payment of tax, both of which are very attractive options for illegal and informal cargo. Further, the vagueness of “non-prohibited” items leaves open numerous loopholes. Chapter 8 of the same law, “Prohibited and Restricted Goods”, states simply that “These goods include products which affect national stability and security, public health, wildlife, endangered species, environment, archaeology, artistic, cultural and historical heritage of Laos.” The law does not specify in any manner what goods would cause adverse effects, nor how to determine such effects. Further, even with prohibited items, Article 49 states that in the case of the attempted export of “prohibited personal belongings, exporters shall be authorized to export before their departure only when approved by the authoritative state agencies and as a third person guarantees that such belongings shall return in their original number and conditions.” Such laws would be, and are, very difficult to implement. A partial list of observed items that can be declared as “personal belongings” is given next page.

55The unresolved question of the basis of legality remains. Are legal definitions to be based on the potential harm of the product, and if so, is it harm to an individual or to a corporation or both? Some of the goods above become illegal when they rely on illegal use of brand names or unsafe / non-approved, un-inspected, or non-declared contents, making them into legal issues as trafficked goods, although they are probably harmless. One example is the cheap mobile phones, clothing, and housewares that dominate the proliferating Chinese markets in rural border areas, and that appeal to low-income consumers trying to obtain goods that might enable slightly better standards of living—or that are no longer producible at home. If these legal issues are ill-defined to us, they are even more so to the local border dwellers.

Personal items carried or transported that can be defined as legal or illegal

Items for personal or household use

Trees and tree parts (timber)
Non-timber forest products (NTFPs)
Certain kinds or amounts of crops in shortage (“crop trafficking”)
Machine parts for motorbikes, cars, trucks; farm equipment; other
Mobile phones, mobile phone SIM cards, wires, batteries; latches, fencing
Small household appliances
Tools, nails, screws, nuts, bolts, utensils
Toiletries, ointments, oils, salves, balms, astringents, tinctures
Garments, accessories, decorations, cloth; materials to produce cloth
Jewellery, gemstones, metals, including scrap metal
Items to be repaired or serviced; items for use in repairing own goods

Chemicals (non-medicinal use)

Fertilisers, especially those containing potentially explosive amounts of nitrogen
Construction / building chemicals: pesticide sprays, anti-fungal sprays, sealants
Cleaning solutions
Food additives such as MSG

Medicines and pharmaceuticals (genuine, counterfeit, or herbal). Purposes:

Remedies for common yet serious illnesses: malaria, dengue fever, AIDS
Viagra, aphrodisiacs
Stimulant drugs, narcotic drugs, sedative and tranquilising drugs

56In the globalised financial matrix of the GMS, the industry that relocates or out-sources to an ASEAN country directly impacts that region’s society and culture as an employer of the region’s peoples. The current economic situation of both developed and developing countries has resulted in enormously increased mobility of the industrial / manufacturing workplace (outsourcing to Asia), its management, its sales and marketing, and even of employment opportunities and locations, which have rapidly increased and continue to change.

57In the localised matrix of the border areas, this results in, and even necessitates, an enormous increase in the mobility of the workforce. The flows of persons, information, and goods that we call globalisation have rapidly increased and continue to change. As a result of the changes in these global and local matrices, there is even a noticeable tendency in recent years for corporations, Export Processing Zones (EPZs), and aid projects to locate near the borders and ports of countries that supply labour. Regionally, the fieldwork thus focussed on border areas of ASEAN, and more specifically, on the Upper GMS.

58In this context it is important to note that the ASEAN region has long hosted a culture of movement, where it is the norm rather than the exception to move frequently and to multiple destinations. Historically, the current nation-state boundaries did not exist, and Southeast Asia was a region of overlapping tributary states described above as mandalas. Movement was easy and was undertaken for trade, diplomacy, war, and work, without the legality and policy issues, and without the financial systems (tariffs) that now surround the re-location and movement of enterprises and of persons.

59The European colonial administration abolished the earlier forms and ideas of location and movement and the concepts of flexible and shifting boundaries. They were replaced by stricter nation-state boundaries accompanied by codified laws regarding the transfer of assets or goods, enterprises, and manpower. These legal and financial boundaries and their procedures were appropriated by outside (global) corporations and by development projects that entered and generated their own policies (measures) and behaviours after the end of colonialism.

60Nonetheless, the traditional inhabitants—both employers and hirees, or patrons and clients—of the region still maintain their earlier spheres and territories of livelihood and of work / production. For a Tai ethnic, the Shan States of Myanmar, northern Thailand, northern Lao and North Vietnam, and southern China are a single sphere of loosely related areas in which his / her own language, work and life practises, and cultural values can be accepted. Thus the movement of people to work, and the movement of employers and small enterprises, within the ASEAN region are, in terms of volume, still higher than that of ASEAN citizens who move outside of ASEAN.

61In this situation, the borders or boundaries of ASEAN nations take on two conflicting meanings with regard to local economies: 1) the conventional meaning which not only requires legal and certifiable movement of projects, equipment, assets, and labour; but also, because of the transaction costs of fulfilling such legality on differing bases in each nation-state, an unofficial dependence on illegal or informal mobile labour; 2) the traditional meaning of borders and movement to the people who must move; that is, that borders exist as barriers to movement only at the extreme edges of a large, loosely defined region where the acceptability or intelligibility of one’s own language and practises breaks down.

62In the geographical area of this research, movement is necessary to livelihood; and the distinction between the movement of people and the movement of goods becomes less meaningful. The same persons who migrate regionally to seek livelihoods are also both the transporters and the consumers of goods that, like themselves, move informally and even illegally across borders.

8 - Socio-Economic Changes in the Border Area

63The research site in the Upper GMS was from Shan State in Myanmar to the Xishuangbanna region southeast of Kunming and three northern provinces of Laos. The roads between China and Laos run from Jinghong, on a continuation of the new Asian Highway No. 3 (3 East) that comes down all the way from the Russian border with China to the border crossings at the Lao villages of Boten and Muang Sing in Luang Nam Tha Province and several villages in Oudomxai and in Phongsaly Provinces. Routes 13 (which has now been overlapped by Asian Highway No. 3) and 17 in Luang Nam Tha Province also connect Laos to border crossings with the Xishuangbanna region of China. What the Chinese call Xishuangbanna in Yunnan Province is actually Sip Song Pan Na, “Twelve Thousand Rice Fields”, in the original Tai. Xishuangbanna is also home to over eighty minority groups.

64The preliminary survey in March 2009 included crossing from the northern Lao forest into the Yunnan forest and back, as an individual, with no official check at exit or re-entry, and no visa, baggage, or passport. The full survey, including the comparative survey of the Myanmar border with China and the Lao border with China, took place during August 27 to September 5, 2009, and was done legally with visas and crossings at official checkpoints.

65This research clarified some of the incentives to produce and transport illegal and informal goods across the GMS borders, and the impacts of these rapidly changing kinds of goods and other items that are informally traded along border areas of the GMS. In particular, the recent collapse of export markets due to the global financial crisis was the context under which such trafficking and trade, and their exponential increase, were framed. The impacts of the informal and illegal goods chosen for the sampling and the ethnography that underlies this research are their environmental and health impacts. Again, the Lao customs law prohibits goods that appear to adversely affect the environment, but the designation of “personal use” of items purchased abroad, the ease of concealing illegal goods in truckloads of legal merchandise, as well as the lack of agreed standards in ASEAN as to volumes and ingredients that have measurable impacts, makes the law difficult or impossible to enforce.

66In addition, much of the current trade and demand consists of things that can be harmful while not being actually prohibited, as mentioned above. The survey team consisted of one researcher on air, water, and soil pollution (due to agricultural chemicals), one on cross-border air pollution, one on labour migration, and two on social science. The idea was to gain an understanding of the damage very rapidly being done, as well as the very current socio-economic background that leads people—migrants, transporters, and small manufacturers—to risk engaging in these activities and consuming these goods when they know they may be harmful to themselves, to others, and to sustainable livelihoods.

67In late March 2009, the Lao village with the new Chinese casinos and Versailles-style hotel situated right on the Lao border with Yunnan was observed for the first time. At that time there were no Lao people, Lao money, or Lao shops, and over a hundred kilometres farther south into Lao territory Chinese currency and the Chinese language were well entrenched in daily use at markets. In Boten, the border casino area, all shops and facilities were Chinese, and, more strikingly, staffed by very poor rural or ethnic minority Chinese who did not speak either Yunnanese or Mandarin as their mother tongue.

68This indicated that the poverty migration and trade channels run both ways. The same phenomenon has been observed in the last three years in Vietnam, Myanmar, and even northern Thailand, which has no border with China. Destitute rural Chinese migrate across national borders to countries that, in terms of GNP and GDP, are poorer than China. This simply reaffirms the fact that national-level data tell us little about the lives and conditions of the poor, who, in all of the GMS countries, vastly outnumber the rich. The data are weighted heavily upwards due to the astronomical amounts of money earned and spent by the super-rich and by private enterprise in these countries. A case in point is the recent reporting on China’s continued economic growth, not only during the global recession year of 2008-9, but on into 2010. In January 2010 China’s export growth was reported at 21% and import growth at 85% (Nikkei Shinbun, 11 February 2010, 7). This tells us two things, and leaves two unanswered questions, both obvious and not so obvious, as below. First, because exports and imports are obviously cross-border trade issues,

  1. China continues to report national-level growth based on market consumption.
  2. The Chinese economy continues to rely on international markets.
  3. What is the impact of this high-level urban economic growth on the rural poor engaging in cross-border activity?
  4. What is the economic status, per capita, of the rural poor in border areas?

69Not so obvious, however, are the localised features of this growth, which raise two more questions.

  1. What is the contribution to the above export-import figures of the local cross-border trade with Myanmar and Laos?
  2. How could figures for such trade, which is largely informal, be measured?

70In point of fact, the cross-border trade with “poorer” neighbours is evidence of at least two unrecognised but growing phenomena. One is based on the statistic above, that imports, not exports, grew 85% over those of a year ago. Naturally many such imports are high-end goods that urban Chinese have recently become able to afford. Many more, however, in terms of sheer volume, are the small, cheap, daily goods, small-scale electronics, and agriculture-or forestry-related goods that either originate across the border or are made there by Chinese or Thai-managed firms and then re-shipped into China.

71An example found in the present research is the wooden furniture whose wood is illegally “imported” from northern Lao checkpoints into China. According to informants at a village located next to one of the supply areas, an upland timber forest, the wood is cut illegally in Laos and paid for and shipped by Chinese, Thai, or Myanmar buyers. It can be made into furniture and sold at a much higher price after it enters these other countries. In this case, the local wood cutters, whom the informants presumed to be highland minorities, would receive an occasional, although not sustainable, cash income with which they could in turn obtain the Chinese goods on display at the local market. The buyers and shippers, however, would make, according to the Chinese informant, “many times more” money by selling the wood or finished products in China or from trans-shipment from China to other countries.

72As discussed earlier, one of the drivers, or more likely facilitators, for cross-border movements in the GMS region is the perception of a shared or similar ethnicity on the part of the mobile population as well as of the receiving areas. Further, the historical networks of roads, tracks, and river channels that have facilitated these movements since before the colonial period are, though now modified through modern infrastructure, still in use. These tangible and intangible factors—perceptions and physical networks—are historically tenacious, yet they also vary with the historical moment. They are constructed, modified, reinforced, and put to multiple uses, not only by the surrounding cultural and political environments of the nation-states of the GMS but, significantly, by the mobile populations themselves.

73Working against these continuities, however, are various policies of the nation-states that overlap, and now enclose, the older routes and borders of pre-modern mobility. Border-formation itself was one such policy adopted in the GMS a century ago, whose socio-political implications have been discussed at length elsewhere (see Anderson; Winichakul; and Ivarsson). Another, more recent policy is the adoption of measures to re-settle mainstream or majority ethnicities in hinterland areas normally inhabited by minorities. In China there have been recent attempts to Han-ise certain areas of the Yunnan border with Laos and Myanmar. Jinghong, the southern Yunnan city that was in pre-modern times the capital of the Tai region of Sipsongpanna, has very rapidly shifted from being a centre of Montagnard ethnic cultures with a Tai-speaking minority to being a Han-inhabited and Han-staffed centre for Han tourists, though most of the wares on display there claim to be from the areas of Myanmar and Laos inhabited by the same groups as these former inhabitants of Jinghong. When the present writer asked a local resident where the Shan-Tai speakers were, she replied that nowadays only ethnically Shan boys who would have studied briefly in a Shan temple would be able to speak a few words.

74Some scholars have perceived this as a conflict or tension between the modern nation-state with its territorial boundaries and the seemingly more traditional galactic polity with its fuzzy borders. Others see a dialectic, or a symbiosis, between the two. Ken’ichi Hirano theorises that national identities, including feelings of nationalism, and transnational, border-dwelling community identities are not necessarily in conflict with each other.

  • 16 Hirano Ken’ichi, in Nishikawa and Hirano, 151.

The heightening of nationalistic feeling in recent years is related to the transnational movement of persons and the issues of “belonging” and identity that accompany them. The relationship between the nation-state or nation-state society and the sort of local, regional community like that of East Asia, is not one of mutual exclusion. Rather, it is necessarily one of overlap and co-existence.16
(Author’s translation)

75In the same volume, Jun Nishikawa remarks on the twin building blocks of economic space:

  • 17 Nishikawa Jun, ibid., 259.

In modern economies, the special characteristics of the ‘space’ for economic activity become apparent. The consequences of managing the public space by means of authority and through the economy [capital profit] are, as Habermas pointed out, to reinforce the tendency for the masses to be manipulated by the agents of power and money. … However, there are also adequate opportunities for public space to function by means of its citizens and civil society, that is, from the bottom up (Gramsci).17

76For the modern, bordered nation-state, then, as well as for the space it shares with its neighbours, the activities of government and capital interdepend with the “bottom-up” economic activities of local livelihoods. It is these that create the tension, and unenforceability of legal definitions of traded goods.

9 - Physical Networks

Together with the new roads from China has come more Chinese investment in the border districts [of northern Laos]. There is already significant investment in rubber, sugar cane, watermelons and peppers. This is likely to greatly increase, with unknown—and unplanned for—consequences on the environment and livelihoods. Chinese investors grow rubber up in the hills, up to elevations around 700 and 800 meters above sea level (Rattanavong, 264).

77Physical networks consist of old and new overland tracks throughout the region, rivers, and physical means of transport. In the past, caravans and migrants went by foot or by donkey; wealthier merchants sometimes rode horseback. Individual migration is a thing of the modern period, and is probably related to the modernisation of transport means and of information channels that make individual movement possible. Until recent times, mobility was in groups, for various reasons of safety, pooling of knowledge and reliance on the knowledge of an accompanying leader, portage of merchandise, and the household-or village-based search for a commons of livelihoods. Further, the existence of ancient physical ways and networks was important to the continued evolution and expansion of physical roads up to the present. Strikingly, despite the improvements in engineering and building materials that now make it possible to construct roads, tunnels, and bridges where there were none before, all of the major and branch Asian highways have been built on top of, or closely parallel to, the old roads of the ancient caravans. As Rattanavong goes on to point out,

This region was the route of Yunnanese trading caravans from China. [...] Xieng Kok [in Muang Long] [is] now a busy port for the riverine [ sic] transport of goods between China, Laos, Thailand, and Burma. [...] Yunnanese (Hor) merchant caravans traveled atlong [these roads] [...] to buy opium, miang (tea leaves) and other forest products and to sell pottery, cloth, scales, brass pots. [...] The colonialists used this road to seize the kingdom of Muang Sing. Both the French colonial powers and the US army used the road for military access to military bases in Muang Sing (259 and 263).

78The preservation of long-standing physical networks has not only had a geographical and environmental impact on the means of migration. It has also had a marked impact on the nature of modern mobility, in terms of the mental constructs that underlie migrants’ways of understanding the mechanics of the journey itself as well as their practical intentions in regards to their possible destinations. Further, it can be shown that the continued existence of roads, waterways, and regular transport in specific areas has defined the very nature of the spaces, production, and goods that can be transported along them, as well as of the migrants’ activities and their access to information about the routes and final markets. Long after the Yunnanese caravans, in the Upper GMS, “the whole area began to experience migration because of war and strife in the turbulent 1960s. [...] there are also people who have migrated into the area from other provinces during or after the war. Most of them settled in the Muang Sing or Muang Long valleys [of northern Laos]” (Rattanavong, 261).

79The borders in this region are now explicitly used for trade. Whether in the view of the producers and processors of border-traded products; the proprietors of small family-run shops that make daily or weekly runs across the border to buy cheap goods; the smallholders and Montagnards who cross the border at will to sell their produce and non-timber forest products; or those local consumers whose lack of income dictates that they buy only the cheapest, and thus the border-traded, commodities; the borders are the new commons.

80In general, border-traded goods are produced in high volume (even if traded in small volumes), and are desirable to consumers for one particular reason: they are cheaper than domestic products and cheaper than goods from fully regulated trans-national shipments. For the consumers, who are mainly very low-income farmers, the chief attraction of any commodity is low price. This situation makes the production, transport (or trafficking), and sale of hazardous, informal, and illegal goods highly desirable in terms of local livelihoods. This is the case with the toxic agricultural chemicals that come, illegally or informally, from other countries both near and far. Chemicals produced domestically in Myanmar and in Thailand, for example, must legally conform to certain standards of content and use, and must be accompanied by instructions in the local language for appropriate amounts and frequency of use in order to avoid negative environmental and health impacts. As a result, the processes of safe production, certification, labelling, and distribution require higher costs that are then passed on to the consumer. In the present survey, in Laos, Myanmar, and southern China, the Chinese, Thai, and Japanese agricultural chemicals whose contents included unsafe materials or unsafe amounts of certain materials of high toxicity were sold at prices 65%-70% lower than the domestically produced and certified chemicals. A bottle of Myanmar-produced and inspected herbicide cost 6,000 kyats (U.S.$6), where a bottle or sack of the same size and volume from small-scale Chinese producers cost only 2,000 kyats (U.S.$2) for the same amount of herbicide.

81Further, for these same consumers, who have only recently entered the cash and market economy, the availability of any market commodities at all is a novelty, but a novelty that is becoming increasingly necessary. The transition from subsistence to a market economy is making it less and less possible to produce the necessary goods in or around the home. The cycle of land-based subsistence lost to development, and thereby necessitating new, or increased, cash income, means that even in small-scale agriculture, the pressure to produce crops for income has now rapidly increased. Chemical fertilisers, pesticides, and herbicides that appear to aid in increased production, even in the short term, are eagerly welcomed, especially if their cost is low enough to allow farmers a hope of recuperating the expense. The section below will briefly look at the role played by contract farming and by crop markets (or intermediaries) in driving the demand for illicit and illegal agricultural goods.

82Contract farming usually brings with it the free, or very low-cost, distribution of agricultural chemicals. So, of course, does the hiring or long-term leasing by small or large cross-border subcontractors of farmland and market spaces within Laos and Myanmar. Second, the extent of farming necessary to satisfy contract or market demand is growing larger, making it more difficult for even an extended family to cover all the chores necessary for cultivation. One family of ten in northern Laos reported that without chemicals they would not finish the expected farm work in a day’s work, nor would they be able to produce the amount that the contractor, in this case the Thai firm CP, expected and needed in order to maintain the contract relationship.

83Where plots of agricultural land are shrinking due to sale or development of land, including development of infrastructures including highways and gas pipelines, rural dwellers, most of whom have had customary rights to use land but do not have modern legal title to it, have lost land at a very rapid pace. On smaller plots of land they now seek strategies to increase the productivity and marketability of their products, and try to do so on a tiny, or non-existent, amount of cash for investment. The production and trade only of legal goods has become difficult or impossible for smallholders. Further driving their engagement in illegal or informal transport and trade are the policies that depressed prices of traded agricultural goods even before the 2008 recession.

  • 18 Global Commission on International Migration, 13 and 21.

Some 1.3 billion people, around half of the work force in developing countries, are employed in agriculture, usually as small farmers. These farmers are confronted with multiple disadvantages. They face competition from subsidized farmers in more prosperous parts of the world. Efforts to market their goods and improve productivity are often hampered by the poor physical and financial infrastructures that exist in many developing countries. [...] By depressing world prices for agricultural commodities, those subsidies [by the First World for their own agriculture] make it more difficult for small farmers to stay on the land.18

84Contract farming is currently praised as one way for remote rural villagers to maintain their livelihoods without migration or illegal trade. It will be examined below. But by far the most common method in the three countries surveyed was for individual farm households to purchase the extremely low-cost, hazardous agricultural chemicals trucked in from China, and to sell, in return, logs cut and transported illegally from the surrounding forests.

85The environmental and health standards of these chemicals are low. Some are toxic, some are toxic in certain amounts, and some contain banned materials. The crux of the problem, however, is that the sheer daily volume by which these items are legally or illegally taken across borders is so large that inspection and certification have become an impossibility. Several of the key informants among border officials and agricultural officials mentioned the cost, distance of transport to a chemical laboratory for inspection, and lack of adequate staff and facilities at on-site inspection at border customs in tracing, and halting, the trade in illegal and hazardous goods (see Chapter 4, below).

  • 19 Ghosh, 22.

86On the broader scale of spatial and economic realities, the trade and trafficking areas here can be seen as in some ways the new version of the mandala or galactic traditional territories and their perceptions that were formed earlier. As Bimal Ghosh also pointed out, the movement of people and goods still does not conform to geographical boundaries.19 These territories are now, however, maintained not top-down but by their users at the lower levels. Thus the things that are moved across borders are both tangible and intangible, legal to their movers but illegal to the centralised state governments that try to regulate them. Further, without a consistent and multi-lateral legal framework by which to identify, examine, and regulate goods, we risk continuing the age-old situation where consumers procured merchandise “that was illegal in one place and not in another” (Sturgeon, 24). If modern, nation-state-defined legality and illegality are determined on the basis of a definition of borders that assumes they are there to stop, restrict, and regulate, rather than facilitate, trade, then, measures to define, control, and evaluate illegal border trade will remain unrealistic and, worse, ineffective.

87For the concept of the fuzzy-bordered mandala to be useful, however, it must be re-formulated to apply to the regional economy, seeing it as both nested within the larger cross-border economy called “global” as well as forming buffer zones along the GMS borders in which trade, rather than being regulated and restricted, is relatively unfettered, and in the illegal and informal sectors proceeds largely in an “invisible” manner as described above. These would then constitute economic zones, not of private-public Free Trade Zones, but of bottom-up, or local, “freer” trade zones following and reinforcing the buffer zones in the Upper GMS.

88The tension, or conflict, between modern nation-state borders and trade laws and the old or new galactic (and economic) buffer zones lies not only in the tension between the old mandala and the new, strictly regulated borders. It also lies in the tensions between licit and illicit employment, formal and informal trade, and legal and illegal migration or movement. The real functioning of the geographical borders, and now the functioning of the global economy, necessitates a larger informal buffer economy in the GMS. This finds its corollary in the buffer zone or grey area of legal / illegal, formal / informal distinctions. The definitions, nature, and functions of these polarised terms exist on either side of a wide buffer zone inside of which they, in reality, bleed into each other, conforming neither to modern law nor to older kinds and dynamics of livelihood. If, for Shan State, Yunnan Province, or northern Laos, there was until recently a time before the nation of China or Thailand was a major presence in their lives (Sturgeon, 17), that time has now been legalistically and economically superseded by the state and legal entities of China and Thailand. Indeed, there are new nation-state boundary conflicts arising between China and its southern neighbours at points where Chinese businesses and control of land have made entire small territories within Myanmar and Laos into extra-territorial Chinese zones, with exclusively Chinese ownership and management, Chinese language, Chinese currency, Chinese telephone numbers, and Chinese-provided infrastructure. Yet, or hence, the buffer zones and the livelihoods they make possible have survived, revived, and even expanded, both geographically and economically.

89In being and maintaining its territory as a trade liaison or as a porous zone, the border becomes, not a static or sedentarized entity, but both a means of movement and a means to indicate the direction and economic possibilities of movement. First, without the existence of a border as a fairly spacious and fluid zone for movement and trade, the economic dividends available from neighbouring states in terms of temporary employment, income, and goods would cease to be negotiable. Second, even these commodities, which are desirable also for their fluidity, mobility, and comparability—economies of scale are manipulated daily on either side of the border—would cease to offer the kind of viable competition among themselves for labourers, merchandise, and information that allows workers, consumers, and small-scale producers to weigh costs and benefits in the constant search for livelihood opportunities. Third, the territory and breadth of the border zone itself offer the locus, the roadway, and the transport for movement that provide the means for persons and goods to cross easily and quickly. Both the forested and the plains or lowland border areas offer not only waiting, lodging, or staging areas, including outdoor makeshift lodging, but large spaces in which to meet other travellers, exchange, buy or sell goods, and exchange information. Further, these areas also offer production sites. Not only local agricultural goods and NTFPs, but small factories and smaller workshops locate, with increasing frequency, directly in the path of border movement, in order to access materials and labour.

90Outside the city of Jinghong, on the old trade route that has now been superseded by Asian Highway No. 3, the Akha and other minorities still depend on trade and cross-border movement to glean enough sustenance for survival. Displaced by not only Han people and Han land ownership but Han economics, border territory dwellers are pushed further and further into illicit and informal trade in order to have any livelihood at all. What Sturgeon calls the “impersonal, rootless flow” (210) of people that China’s central government attempts to sedentarize, is here actually a rooted and communal flow of smaller or larger rural groups who cling to each other, and their rural trade routes, to survive. Nor are their communities necessarily fragmented, due to modernisation, migration, or Han-isation. They are rather perhaps extended from one fuzzy border of the buffer territory to another. It is the border territory now that, in fact, makes movement possible and makes it sustaining (in terms of livelihood). The border does not so much impede movement as it is necessary to movement, just as the sea is necessary to ships.

91The border, then, has the meanings of trade platform, trafficking site, and migration conduit. In the eyes of the local people who use and traverse it, it can function not only as a territory in its own right, but also as a common property resource.

92In this physical context, then, traversing the border is done not as a one-time, permanent move, but as a series of moves, repeated throughout their migration for the sake of livelihood, often back and forth along the same trails, with goods that were legal in one time or place and illegal in others. In this sense it is a movement of anti-placement, resisting nation-state territorialisation and sedentarization. The border denizens who move most frequently are what the nation-state, or the global development initiative, regards as low-skilled and low-educated. Yet in another meaning, they are highly skilled in traditional livelihoods and highly knowledgeable about movement channels, networks, and saleable goods. More than these, however, the sense of a life and of time depends to a certain extent on movement, or, in their eyes, small increments of advancement. Without movement, time, in border territories and villages, passes, but it does not seem to advance. Similarly, a life without movement also seems to offer no advancement or way to judge one’s progress on earth. This includes the return trip from across the border, which, though geographically a return, is still part of the advancing series of steps through space and time.

10 - Illegal Goods or Livelihood Resources?

93What exactly are the categories of resources, as they would be viewed in the eyes of local populations, that are being cross-transported, now? In the foregoing section on issues in defining the legality or illegality of goods, we noted three broad categories: items for personal or household use, chemicals (non-medicinal), and medicines or pharmaceuticals. But a closer look at the physical production processes of these items reveals a similarity among them. All are “mediated”: they have undergone a simple yet modern process, requiring the addition of one or more manufactured, purchased items to the natural ingredients. The most popularly traded items are, nowadays, whether legal or illegal, those that are mediated in this way, rather than those naturally produced by hand or by traditional cottage-industry processes. They may be classified into six categories according to the type of simple mediation, its incorporation of certain ingredients still available in agriculture and forestry, and the uses for these products in a developing or transitional economy:

1. Processed: foods, crops, timber, minerals.

2. Manufactured: disposable goods, housewares. Packaging materials. Vehicles, machinery, and parts. Human and animal medicines for trafficking. Chemicals such as narcotic and stimulant drugs, pharmaceuticals, petrochemicals, pesticides, herbicides, fertilisers, cleaning fluids, building materials sprays. Contraceptives, abortifacients, Viagra. Biotech or altered seeds, stocks, and crops.

3. Non-medicinal chemicals: building sprays, cleaning sprays. Petrochemicals, plastics.

4. “Composites”: mediated items containing one natural or primary ingredient and one or more processed or manufactured ingredients or whose contents combine two or more of the manufactureds. Pharmaceuticals, herbicides, pesticides, fertilisers. Building materials.

5. “Natural”: water, crops, sand and soil. logs. human / animal products such as placentas, animal parts. Minerals, gemstones.

6. Unwanted or illegal wastes: effluents, toxins (for transport to easier or more clandestine / covered disposal), by-products.

94There is, however, a seventh category, which is currency. Although the major trade currency in the border regions is the Chinese renminbi, which all merchants accept and with which anything can be purchased, at a better discount, in the border areas of the upland GMS, it is not officially exchanged in much of the border trade, but used informally. Further, this informal or black market currency trade goes both ways. In some cases this is unavoidable. Myanmar, for example, posts an official exchange rate for its kyat that does not reflect the actual value of currency exchanges and is not viable for buyers or sellers in the remote border areas. The presence and use of currency from Myanmar, Thailand, and Laos throughout the region, even within China, is found within local markets and between individual traders and consumers, at rates that approximate official exchange rates but that are usually agreed upon during each transaction by the individuals involved. This means that not only is currency being illegally trafficked—and taking Myanmar currency, for example, into another country is illegal—but that its exchange is being decided on a daily, ad hoc basis within the extra-legal border trade. Although the currency volume of such ad hoc exchanges may be small for each transaction, the fact that there are thousands of such transactions daily means that a very large amount of currency has been taken off the official foreign exchange market and “reserved” into the New Informal Economy that is operated, sustained, and populated by the rural denizens of the Upper GMS.

95First, a note on the terminology used above. The “informal economy” is a term that normally refers to non-contract labour and production. It has been used since development initiatives began in Southeast Asia following World War II and, in the GMS, since the independence of Myanmar, Laos, Cambodia, and Vietnam from the late 1940s to the mid-1950s. As development and technology transfer brought in industrialisation, the short-term and low-wage employment that absorbed the low-skilled and less-educated populations of these countries was a staple of the transition to an international market economy. Scholars of growth-oriented development have critiqued the informal economy as being a factor in the persistent poverty of the region, as its low and irregular wages and hazardous working conditions failed to match the need for increasing income and skills that the modern market economy demands. In the case of the Asian Newly Industrialising Economies (NIEs)—the Republic of Korea, Taiwan, and Singapore—the informal economy, or, as it gradually became fixed within certain smaller, light industries and retailing, the “informal sector”, was responsible for the economic growth that allowed these three countries to leap-frog quite rapidly into parity with developed countries or regions—though at the cost of continued poverty among rural populations, health and environmental problems, and the trade in substandard goods that could appeal to the international market through their extreme cheapness.

96This New Informal Economy is really not new, but in all likelihood a continuation of the processes that pulled the Asian NIEs up into the ranks of higher gross national income and consumption. It is simply that we have ignored, not its existence, but its volume and the extension of its cross-border scope in recent years to the point where we now have very little idea of who is trading or trafficking in what, from where, in what amounts, and at what value—thus necessitating the kind of basic sampling and research such as that in the present work. The New Informal Economy focused on here is the one that, as discussed above, is the mainstay of the rural Upper GMS. It is based not only on a widespread availability of informal workers and informal employment. It is also based on something which the definition of the earlier informal economy omitted: the convergence of worker, transporter, and consumer into one entity.

97Naturally in pre-modern economies the worker, transporter, and consumer were often one and the same person, particularly in the system of self-production / self-consumption in the villages of rural China and Southeast Asia, but also on the larger scale of the traditional market towns. The unique feature of modern “catch-up” development in less-developed countries is, however, that unlike their richer counterparts, employment and wages given to workers did not automatically make workers able to consume the products they manufactured given that the economies of scale were weighted in favour of the export economy and international (richer) markets and currencies. Thus, the re-emergence (or renewed visibility) of the rural, mobile workforce on a very large, cross-border scale as simultaneously also transporters and consumers of the goods they, or those like them, produce, is indicative of a new informal economy—with its attendant informal, or illegal, goods, movements, and markets.


8 See Walker, 1999, and Lieberman, 2003, for historical discussions of trade in the region.

9 The Global Commission on International Migration stated that “Trade has an important role to play in promoting development, alleviating poverty and creating sustainable livelihoods” (21), while Martin Wolf asserts that “restrictions on the mobility of people are economically counterproductive and should be banned in the same way as the circulation of goods and capital should be liberalized in a globally integrated economy” (117).

10 See, for example, Pécoud and de Guchteneire, 11 and 13.

11 See Epprecht, Minot, Dewina, Messerli, and Heinimann, 29 – 32.

12 Pécoud and de Guchteneire, 18.

13 Pécoud and de Guchteneire, 7.

14 Amartya Sen, in Development as Freedom, uses the term “economic unfreedom” to describe such situations in terms of economic choice constraint. Alan Smith, in Human Rights and Choice in Poverty, goes on to give specific examples of the ways in which constrained economic or subsistence choices bring about a dependence on the more powerful, and hence a reduction of social and political freedoms.

15 This is not only in terms of their not having been demarcated in modern or Western terms until approximately one hundred years ago, but also due to the occupation of the areas by majority and minority ethnic groups to whom the borders, traditionally, lay elsewhere, whether enclosing their smaller communities or marking a significant and sharp divide between two polities.

16 Hirano Ken’ichi, in Nishikawa and Hirano, 151.

17 Nishikawa Jun, ibid., 259.

18 Global Commission on International Migration, 13 and 21.

19 Ghosh, 22.

Table des illustrations

Titre Planned and Existing Asian Highways
Légende Source: UNESCAP 2004.
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Titre Framework of the Study in Terms of the Overland Transport of Goods and its Relation to Current Socio-Economic Conditions
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Fichier image/jpeg, 168k

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