
The story of how the Shwe Kokko New City Project became synonymous with transnational crime is far more complex than the media, and particularly international outlets, have reported. The reports lack a nuanced understanding of Myanmar. Beneath its surface, the project is a tangled web of corrupt politics, competing security interests, and fractured governance that has long plagued the country and threatened its neighbours.
The Shwe Kokko project was initially approved under the National League for Democracy administration and received formal investment approval from the Myanmar Investment Commission (MIC). Several news outlets noted that, in 2018, the MIC approved the first phase of the Shwe Kokko project: the US$22.5 million construction of 59 luxury villas on 10.3 hectares of land near Karen State’s border with Thailand. However, its execution has become deeply enmeshed in the state’s local power dynamics, particularly involving the regime-sponsored Karen Border Guard Force (BGF).
The BGF was formed in 2009 from the former Democratic Karen Buddhist Army as a paramilitary group under the direct command of the Myanmar military. It wields significant control over the territory surrounding Shwe Kokko, and is deeply involved in the controversies surrounding the project. The project itself is part of a region-wide effort, by both non-state actors like the BGF and various state actors in Southeast Asia, to capitalise on the multibillion-dollar Chinese online gambling market, dominated since the early 2010s by online operators based in Cambodia and the Philippines.
The February 2021 military coup profoundly disrupted governance in Myanmar. Central control weakened under the newly installed regime, the State Administration Council (SAC), and left local militias, including the BGF, to fill the resulting power vacuum. While institutions like the MIC were undermined, the BGF assumed a de facto governing role in its operational areas along the Thai-Myanmar border. However, accountability for the project’s ongoing controversies still lies with the SAC in Naypyitaw.
Despite carrying out relentless airstrikes and heavy artillery attacks on other targets in Karen State—including schools, hospitals, residential neighbourhoods, and religious structures—the regime has conspicuously spared Shwe Kokko from such assaults. This fact exposes its disinterest in tackling the illicit activities—illegal gambling, financial scams, and human trafficking—taking place there. Indeed, it suggests that the small city, with its easily targeted multi-story buildings, including scam centres surrounded by high walls and razor wire, is one of the rare places outside of the SAC’s direct control deemed worthy of special protection from its destructive force.
Shwe Kokko has long faced criticism from local communities and Karen resistance groups, whose constituencies bear the social, environmental, and political impacts of the project. Its alleged—now confirmed—ties to international crime syndicates, as well as the host of illegal activities that it has always been associated with, including money laundering, unregulated gambling operations, and unauthorised construction, have made it a contentious project from the very start.
While the BGF is clearly a key player, it is disingenuous for the SAC to claim that it cannot rein in these activities because they are taking place in an area controlled by non-state actors. After all, the BGF is a creation of Myanmar’s military. Part of its function has always been to undermine Karen resistance groups by creating divisions, particularly with the Karen National Union (KNU), which is widely regarded as a genuine revolutionary force, especially among the Karen people. To this end, the military has long fostered the BGF’s rampant criminality.
Karen leaders face an uphill battle as they navigate a volatile mix of competing narratives surrounding development, sovereignty, and exploitation. The controversies surrounding Shwe Kokko have placed the Karen community in a precarious position, forcing them to confront internal divisions while protecting their people and territory from external threats.
Internationally, Myanmar’s civil war has received only limited attention over the past four years. Global focus has remained on the crises in Ukraine and Palestine, leaving the complex conflict in Myanmar largely off the radar of most foreign observers. The absence of international pressure has allowed the SAC to ignore its obligations to regulate the situation along the border, where it still has significant influence through its proxies. While high-profile incidents such as the recent kidnapping of a Chinese actor in Thailand occasionally put a spotlight back on Myanmar’s lawless border region, it is unclear how long this attention will last, and whether it will inspire foreign governments to act.
Ultimately, the Shwe Kokko project illustrates the broader failure of governance in Myanmar. Although conceived under a different political framework, the project has, since the country’s return to military rule, become an enormous source of harm to local groups, as well as to foreigners caught in its web.
Trapped between the SAC’s wilful indifference and a lack of political will among other countries, the KNU now faces daunting challenges as it grapples with the ongoing fallout. Shwe Kokko is therefore not just a dubious “development” project, but also a litmus test for the KNU’s ability to safeguard the collective future of the Karen people in an increasingly fragmented Myanmar and an ever more distracted world.
Saw Kapi is a political analyst and the founder and director of the School of Governance and Public Administration (SGPA)