Jacqui Baker & Sarah Milne (2015) Southeast Asian dirty money states

Illicit revenues have not been part of the normative story of state formation. Rather, illegal practices and monies have been framed under the banner of “corruption:” an aberrant, irrelevant and dysfunctional side economy to official narratives of statehood. Yet, as the articles in this thematic issue show, to dismiss corruption and criminal activity as outside of the realms of state activity is to exclude an important dimension of state formation in contemporary Southeast Asia. The sums generated by these illicit economies are considerable, and parts of the state are heavily dependent upon them for everything from everyday state work, to the extension of sovereignty and the shoring up political stability. Little wonder then that these states exert enormous effort in the capture, control, and organization of dirty monies. The empirical evidence therefore challenges conventional narratives about how weak fiscal states are unable to build fiscal power, and instead suggests that Southeast Asian states often degrade their fiscal architecture in pursuit of illicit profits.

The relationship between illegal rentier economies and the state does not necessarily entail chaos or an absence of the rule of law. Rather, illegal economies are systematically established and protected by the state – as seen in the highly organized and visible deployment of the tools and devices of state territorialization. For example, state laws and institutions are used to demarcate areas for illegal logging; public infrastructure and equipment like roads and trucks are used for illicit timber extraction; and specialized drilling machines are deployed openly for the construction of underground mining tunnels that enable so-called informal mining. This level of capitalization and investment indicates how “illegality” can be systematized and normalized at a remarkable scale and how actors involved expect such practices to endure over time. 

Perhaps the most prominent example of this is in To’s article on Vietnam, where the state has recently re-zoned woodland around an upland village as “national forest.” This territorialization has not only changed the legal status of the land, extending state propriety over it, but has ushered in a host of government officials, law enforcers, and park rangers to “protect” the forest and uphold the logging ban. Residents who engage in traditional timber extraction are effectively criminalized and local law enforcers have the authority to confiscate village-logged timber or issue fines. However, the law is rarely enforced as stated on paper. Instead, the law is “taxed” through bribes extracted from villagers, who effectively conduct logging on behalf of local authorities. As timber is subsequently transported through government checkpoints, local middlemen known as lawmakers – who are themselves officials with familial ties to the government-run People’s Committee – skillfully maneuver the illicit timber through and over the formal law. The biggest rents from this illegal logging industry are not kept by the villagers who fell the timber, but are accumulated by state institutions and state officials. In this way, territorialization of upland Vietnam is central to the establishment of an illicit regime of extraction that finances and enriches the state.

Jacqui Baker & Sarah Milne (2015) Dirty Money States: IllicitEconomies and the State in Southeast Asia, Critical Asian Studies, 47:2, 151-176