Gambling on Chinese Investment in Laos

With its massive cupolas, one shaped like a green crown and the other painted bright gold, Kings Romans Casino does not blend in with the forests of rural Southeast Asia, but the establishment is the heart of the Golden Triangle Special Economic Zone (GT-SEZ), a controversial gambling hub in northern Laos.

The area has mostly attracted criticism for being a wildlife trafficking hotbed and its status as an effectively self-administered foreign enclave, though it has also brought investments to remote Bokeo province.

Not much is known about Zhao Wei, the casino's owner, except that he comes from northeastern China. In 2007, his Hong Kong-registered Golden Kapok company was granted a 99-year lease from the authorities in Vientiane for 10,000 hectares of land. Of these, 3,000 hectares were set aside as a duty-free area and have since evolved into a small town with hotels, restaurants, brothels and the glitzy Kings Romans Casino.

Inside the gambling house, visitors are greeted by an imposing golden statue of a Greco-Roman god and tables shimmering with precious stones. A card game called long fu and slot machines are the main attractions in the casino, which operates 24 hours a day, seven days a week, to the delight of hundreds of mostly Chinese customers, who are obviously the main targets of the project.

Upon entering the GT-SEZ, they might be forgiven for thinking they are back home, for the town's shopping district is a replica of a classical Chinese town where shops are operated by Mainland business people and the Laotian kip is by and large not accepted. Even the police are foreign: one officer told Asia Sentinel he came from Myanmar and, while speaking Mandarin, he understood not a word of Laotian.

The area resembles a small-scale Mong La, Myanmar's “vice city” where Zhao Wei used to own another casino. Under the National Democratic Alliance Army (NDAA), a rebel outfit that long ago signed a ceasefire with the Burmese government, Mong La has transitioned from a small village to a wealthy town in the span of two decades, mostly thanks to gambling and trafficking.

“My own sense is that there were likely some legitimate internal sovereignty concerns,' said Keith Barney, a lecturer at the Australian National University and an expert on Laos. “Even if some within the government of Laos would presumably have been formally in control of these project areas, in practice they appeared to be more like independent illegal fiefdoms.”

Prostitution is openly on offer in the GT-SEZ, as is a vast array of illegal wildlife. A 2015 report by the Environmental Investigation Agency (EIA) highlighted that traders were allowed to buy and sell products made of tigers, leopards, rhinos, pangolins and bears, among others. Many such species are protected under the Convention on International Trade in Endangered Species (CITES) In spite of ratifying the convention, Laos has emerged as an important center for wildlife smugglers, with SEZs explicitly mentioned in CITES documents as areas of concern.

“Chinese companies, consumers and nationals can freely engage in illegal wildlife trade and consumption,' said Debbie Banks, the EIA's campaign leader for tigers and wildlife crime. 'Illegal wildlife trade may not be as open as in Mong La, but the GT-SEZ has the façade of being a more accessible, resort-style operation than Mong La that may appeal more to tour groups.'

Following the exposé, the business has been conveniently swept under the carpet, but hardly eliminated. Shops still display ivory and exotic meat is available on demand. The owner of one restaurant on the Mekong said he could provide both bear and pangolin – a serving of the latter would cost about US$100, but it would be enough for a table.

In spite of its dark fame, some argue the GT-SEZ has had beneficial effects, especially when it comes to attracting investments. The enclave is now served by one of Laos' best roads and construction projects have turned the place into a magnet for workers from Myanmar, Laos, China, and, in rare cases, Europe.

“They are Ukrainian,” said Zhang, an ethnic Chinese man from Myanmar, nodding as two blonde women strolled by. “There may be 20 Ukrainian girls here, they work at the casino and the boss gives them very good money,” he claimed, adding that some were xiaojie – a term that can imply anything from waitress to sex worker – at karaoke bars.

“These enclaves can potentially generate income for the state, as well as commercial opportunities for locals, but the poorest are not likely to benefit,' said Pál Nyíri, a professor of anthropology at Free University Amsterdam and an expert on overseas Chinese communities.

While it is beyond doubt that the GT-SEZ has attracted big money, numbers are elusive. Golden Kapok's website claims that roughly US$1.1 billion had flowed into the zone by 2015, with an additional US$1.2 billion to be invested in the coming years on a set of projects, including an international airport and hotels. A study by Nyíri , however, reported that according to the Laotian government only US$26 million had been registered with authorities as of 2009.

It is just as difficult to establish whether the GT-SEZ could deliver any long-term development. In early January, restaurants and shops were empty, as was the casino itself - something unusual, according to employees. “Even I do not know why sometimes there are people and sometimes there aren't,” said a clerk, commenting on the embarrassingly empty entrance hall. “But in the past they used to be so many.”

Some put it down to the upcoming Chinese New Year, but it is hard to hide that the slow business carries a sense of déjà vu. A few years ago it was the Golden Boten Special Economic Zone, only a few hours drive from the GT-SEZ, which was being touted as a development hot spot on the border between China and Laos.

Then, Beijing decided to crack down following reports of Chinese citizens being kidnapped and even murdered there. Its gamblers and businesses gone, what had been touted as a “paradise for freedom and development” is now a ghost town in urgent need of a new purpose – a gamble that did not pay off.