Today, the scam centres of Myanmar and the nightmare facing thousands of migrant workers there.
Some people don't have their teeth, their hands are broken, their legs are broken.
It was really traumatic.
We have an estimated maybe 200,000 victims.
All their human rights have been removed and they are essentially prisoners.
This is World Business Report from the BBC World Service.
Yes, I'm Ed Butler, and today we're going to be hearing the latest from Myanmar's border with Thailand, where a multi-billion dollar criminal scam network is making billions of dollars but may now be under attack from both the Myanmar military and Elon Musk's Starlink communications firm.
Also, is Argentina's bailout and economic reform plan in tatters, we ask.
All of that coming in the next half hour, but first some breaking news for you.
In just the last few minutes, the US Treasury Department has announced new sanctions targeting Russia's two largest oil companies.
Rosneft and Lukoil.
This is an effort to pressure Moscow to negotiate a peace deal in Ukraine.
President Trump has said the measures come because the Kremlin is not seriously committed to a peace process for Ukraine.
Today is a very big day in terms of what we're doing.
Look, these are tremendous sanctions.
These are very big.
Those are against their two big oil companies.
And we hope that they won't be on for long.
We hope that the war will be settled.
We just answered, having to do with the various forms of missiles and everything else that we're looking at.
But we don't think that's going to be necessary.
We would like to see them just take the line that has been formed over quite a long period of time and go, and let's go home.
Well, joining me is George Conboy.
He's chairman of Brighton Securities there in the US.
He's been watching market developments for us.
I mean, what are your thoughts about this, George?
It's been a long time coming.
There have been lots of threats from the White House at different points in the last few months.
But now it seems he is at least taking some kind of substantial action.
Yeah, action is always great, but the fact that you have to impose sanctions means that you don't have the expectation that negotiations will get you anywhere.
So sanctions mean negotiations have failed or are a non-starter.
And the problem with the Russian economy is you're really pressuring one man.
That's Putin.
And they're not a democracy.
Sanctions don't work as easily in an autocracy like Russia as they do in a democracy.
You don't have the kind of popular pressure.
Fingers crossed, would love to stop the war on Ukraine, but this is a last-ditch effort trying to stop that.
Yeah, I mean.
It's interesting, isn't it?
Because Luke, the Russian oil assets have not been targeted by the West.
Under the Biden administration they were generally left alone, although of course Europe and the US have sort of generally stopped buying Russian oil.
But that oil is still going to other countries.
Do you think that this will actually curb the ability of Russia to export?
It's the last ditch effort for Russia to be able to.
They will still export, but they can't make as much with those sanctions.
Maybe they'll come to the table.
It'd be great if they will.
It's wonderful to try this tool.
But when you see this tool come out of the toolbox, it means the other tools haven't worked.
OK, George, thank you very much.
That's George Conboy at Brighton Securities.
We'll hear more from you later in the show.
Let's move on now to what's happening in Myanmar.
We've had reports in the last few hours that Starlink have switched off more than 2000 of their internet terminals in this country following reports that Chinese gangsters are using them to run complex internet scam operations from the border region with Thailand.
Separately, the Myanmar military has released many hundreds of foreign nationals from one particular scam centre this week.
So what do we know about these illegal criminal operations?
Earlier this year I did visit northern Thailand myself, where I looked across the border, and it is actually possible there to see the criminal institutions themselves firsthand, in plain sight.
I'm now gazing across at probably what is the most notorious of the scam centre developments in Myanmar.
This is Shwe Koku.
It is built literally on the banks of the Moi River, just 50, 100 metres from me now.
I'm looking at high-rise buildings.
Several of them, 8, 10, 12 storeys high.
And there are three or four new ones going up right now.
I can see the workers and the cranes rotating.
This is a hive of commercial activity.
But what kind of activity?
Even from here, I can see the bars on some of the windows.
This is simply a town or a development designed to service the scam centre industry.
It was a huge military camp.
We were so scared, we started crying.
And then we say we want to go back home.
This is Annika Boram.
I interviewed her in March.
She thought that she was going for a job in IT in Thailand.
What she was forced into instead was work selling fake cryptocurrency investment schemes in a building just like the ones I saw, run by Chinese gangsters.
They were local Myanmar security.
Anika told me of one of her scam victims.
He was a very old person, maybe 80 years old.
I think he put more than 38,000 USD.
Maybe I scammed him this much.
It's horrible.
Even now I feel like crying.
Well, Annika says that she and hundreds of other foreign nationals working with her were forced, under pain of regular torture, to scam people like this Turkish gentleman.
She says that she suffered beatings and electric shocks each month and she saw others beaten to death in some cases.
It's all made possible by a brutal civil war in Myanmar, which has left parts of that country beyond the reach of international law enforcement.
Judah Tanner is an aid worker based across the border in Thailand and he helps the repatriation effort for those who escape or who are let out.
He told me how widespread and complex this criminal scam operation has now become.
Since 2021 2022 we've seen just an explosion of the number of scam centres in the region, and I think there is an estimated over 100 scam centres throughout Myanmar alone and I think, more than 70 of them on our borderline.
We have an estimated maybe 200000 victims having crossed the border from Thailand into Myanmar to work inside some of these centres along the borders of Thailand and Myanmar.
And these are Chinese-run operations, we think, mostly.
Yes, from all accounts, it is a Chinese-organised, transnational organised crime syndicate.
Just recently, we've seen quite a few things published that would show the amount of money that has been laundered through them in the trillions of US dollars now estimated.
And of course, there are just countless numbers of people that have been brought into these scam centres.
All their human rights have been removed and they are essentially prisoners inside these scam centres, being forced to work up to 18 hours a day with little to no pay whatsoever.
So let's switch now to what's just happened.
Stories on Monday that the Myanmar military went into KK Park, which is one of the most notorious of the scam centres in that area.
And what, they just cleared it out?
What happened?
What do we think happened on Monday and what's happened since?
So unfortunately, I do believe that on Monday it was quite the PR stunt where they've rounded up the Starlinks, they've rounded up computers and they've found about 2000 people there.
And they've kind of claimed that this has been a crackdown on the scam centres, when in reality it was a very small area.
Some of the buildings still had cranes atop them because they had not finished their construction yet.
And yet since then, we've been seeing what?
A large number of foreign nationals, we think, kind of wandering around the Mir Wadi area, which is on the Myanmar side of the border, looking for a way out.
Who are they?
What do we know about them?
Well yes, this morning I was contacted by my colleagues that we work with with the astonishing accounts that hundreds of people were fleeing from KK Park.
From what we've been able to gather, the company bosses had actually fled the scam centres yesterday, which allowed a large group of Africans take the lead and head towards the gates of the scam compound and essentially overpowered the military that were there, keeping the gates closed and opened the gates.
And from then on for the next few hours.
We've had accounts of hundreds, if not thousands, of people now leaving the KK Park and making their way throughout villages.
Unfortunately, it's really not over yet.
That's not the end or I guess it's not their rescue.
Many have accounted that they are now hiding throughout the villages in people's homes.
And unfortunately, some of the homes that they're staying in are actually trying to exploit them, asking for up to US2000 to allow them to stay there overnight, or they're planning to call the military to come and arrest them.
Right.
So it sounds like a desperate situation for people.
This is very complicated, though, as you say.
The military are going in.
We were being told that the military were themselves profiting from these scam centres, or at least they were in league with those local kind of warlords who are running many of these scam centres.
So it's a bit contradictory why they would go in and be disrupting them in this way.
Is there a sense that...
This has got a kind of wider geopolitical dimension that they're just trying to free maybe Chinese citizens because China has demanded this of the Myanmar military.
Yeah, absolutely.
You've nailed it with that one.
I think there's a few levels.
Of course, China put out a request to the Myanmar group that they wanted at least 30000 Chinese people to be rescued and sent home.
And the Myanmar militia groups that are involved in that area have failed to live up to what the China government has requested.
So our understanding is that they've gone to the government that's in power in Napido Yangon, to the capital, and they've insisted that they help.
So what we've seen is the military group of Myanmar actually come down and are facing off with the rebel group on the request of China's government to bring out these large numbers of people.
And when they claimed that on Monday they brought out 2000 people, they were solely Chinese citizens that were taken from the scam compounds.
As of now, we've only had reports that 200 people have crossed into thailand and are now at a military base in thailand, and they are 100 chinese also.
So all other nationalities that are contacting us um, i mean, we've answered hundreds of messages today.
Myself and my colleagues are from just so many other countries, but they don't know where to go and they're not sure how to get home.
An extraordinary situation.
Aid worker Judah Tanner there.
Well, this leaves Starlink, doesn't it?
It's part of SpaceX, as you may know, Elon Musk's space company.
And, of course, since its launch in 2019, Starlink has emerged as a the single largest satellite constellation in the world, and it provides internet coverage to hundreds of thousands of subscribers in places where the internet otherwise is generally not reaching.
As mentioned, this week, it has switched off some 2500 terminals which it thinks are linked to the scam centres in Myanmar.
The head of Starlink Business Operations, Lauren Dreher, has posted that the firm takes appropriate action in her words on the rare occasion it identifies a violation.
Let's talk about that.
I'm joined by Kerry Bingham.
She's director of the Aerospace Security Project at the Centre for Strategic and International Studies.
Hi there, Kerry.
Remind us how Starlink works and just how big this institution has become and how, I guess, it plays a big role in places like Myanmar.
You're absolutely right.
About a third of the world is not connected to to the internet.
So, while there's a larger global telecommunications market of upwards of 2 trillion, satellite communications provides global connectivity.
That overall market is about $30 billion.
These low Earth orbit satellites, numbering in the thousands that Starlink is operating.
They're providing broadband internet-like services connecting the globe, including in areas, like I said, that just have not been connected in the past to the Earth.
So you have to subscribe, you have to rent a terminal to get access to this satellite connection.
And technically, Starlink can switch you off at any time, can't they?
I mean, they think you're a bad actor or something.
But does Starlink actually have a record of doing that, acting as a policeman, as it appears to be in this situation?
Also, they have an ability to disable terminals or antennas.
They can choose to turn service on in certain areas or turn it off.
But I wouldn't say it's arbitrary.
I mean, they are U.S.-flagged companies.
They have to follow U.S. laws. law and regulation.
They have to receive licenses to operate in certain countries and follow their laws and regulations as well.
Okay, well, have a listen to this.
This is what Judah Tanner, we just heard from him, the aid worker who rescues foreign nationals.
This is what he told us about the move by Starling to close down terminals operated by these scam centres.
It's been a long time coming.
Many of us have been pressing Starlink and trying to get the information to Elon to see this closure of these satellite links.
Unfortunately, what we understand is that really the 2500 units that they're closed down, much of what I had said earlier, the new build areas where they were constructing and setting up the Scarling programs in order to bring more workers in.
So what we do need to see is that it's not just 2,500 and then they end.
What we need to see is they need to be pointed to then look at the 70 other scam centres along the borderline who are all using Starlinks.
And we're talking about maybe 10,000 units.
And what we need to see is for that number to increase from 2,500 to a great, great deal more.
Kerry Bingham, what do you think?
I mean, is there a prospect of that kind of response from Starling?
One is they have to follow applicable laws and regulations.
And also they have terms of service agreements that any users who buy and operate those terminals must abide by.
So whether it's a criminal organization, which it looks like, is the case here, terrorist organization, maligned actors, sanctioned actors, I mean, there is an obligation that they have to take appropriate action.
And they have a lot of flexibility in terms of if you are not meeting the terms of our service, we can turn you off.
Okay, we'll watch it.
Thank you, Kerry Bingham.
Director of the Aerospace Security Project at the Centre for Strategic and International Studies.
You're with World Business Report from the BBC World Service.
It's in the throes of a deep financial crisis.
The US also suggested that private banks might lend a further 20 billion, although reports this week suggest they're having trouble finding adequate ways to secure those loans.
What's worse, there is political jeopardy in all of this, with upcoming midterm elections in Argentina threatening to throw President Mele's economic reform plans and his ruling coalition into disarray.
I've been speaking about all of this with Ramiro Tosi.
He's a former undersecretary of finance in Argentina and now director of a think tank in Buenos Aires.
This 20 billion package looks extremely difficult and I think It will be extremely difficult to find enough collateral in order to structure this type of financing.
After the elections took place this Sunday, we will see if there is enough appetite or not for continuing investing in Argentina.
So you don't think that these multinational banks will find the collateral which...
Basically, the Trump administration said that they should be able to find, right?
That was the idea, at least.
How much does this deal depend on this aspect of the lending?
I mean, how crucial is this to the whole package of bailout that Trump and Argentina have been discussing?
Yes, that's exactly the question, because the Trump administration, especially the president, was a little hesitant of how this support will evolve, depending on the midterm election results.
So that's why the market is still wondering if Milley doesn't have a good result after this midterm election.
The Trump administration will go through this financial support.
The only thing that we already have confirmation, let's say is the swap line that was signed between the Central Bank of Argentina and the US Treasury through this exchange stabilization fund.
Yeah, so just to be clear, that was a $20 billion exchange.
Currency swap, right, between the US and Argentina.
So has that swap actually already happened?
No, until now, no money was really transferred at all.
Right, because meanwhile, the value of the peso keeps dropping, doesn't it?
The Argentine currency.
So whatever it was that Donald Trump signed, I mean, the value of this swap keeps shifting.
Yes.
And in fact, as we are speaking now, the peso is just literally one peso of the upper band of the exchange band.
So probably there will be another round of US Treasury buying of pesos or selling dollars here locally in Argentina before the elections.
And then we will see after the result if this pressure in the foreign exchange market eases or not, depending on the results.
So essentially you're saying this entire bailout, which has been heavily trumpeted by both administrations in the last week or so, it kind of may never succeed, at least in the form that it's been billed as.
Well unless, let's say, the markets has the message that their Millet administration will win, to show the market that they have the ability and the power to commit to this agenda reform that the Millet administration wants to run.
So this tough austerity package depends on Milley's basically his party or his supporters in Congress being successful in these midterm elections.
Donald Trump has himself said the package depends on that happening.
How are Argentines responding to the US president?
Basically saying you've got to vote for the president's people in these midterm elections or else the entire package falls through and you're financial future, your economic future in the next few months becomes incredibly uncertain.
How is that going down electorally in Argentina?
Well, that's a very good question because if you see some of the latest polls, Although supposedly Trump endorsing the Argentinian government, it should have the effect of diminishing the pressure on the financial sector.
Even some of the, let's say, Milley supporters question the kind of involvement of the Trump administration in the Argentina affairs.
And obviously, the rest of the opposition's voters are not happy.
It was not well received for the market, definitely.
And we will see if this has an impact or not on the voters next Sunday.
We will indeed.
Romero Tosi there, a former Under-Secretary of Finance in Argentina.
And reports in the financial press today suggest that investors are in fact betting on a further Argentine devaluation after the midterm elections.
Offshore bets in the peso imply a 12% drop in the currency over the coming months.
And that could signal an end to President Milley's efforts to bring down inflation and indeed to overhaul the country's economy.
The UAE's AI minister has been talking to the BBC today and he's been saying that the country is choosing the United States and American firms over Chinese ones when it comes to developing AI infrastructure.
The UAE recently announced, along with President Trump, the development of a Stargate UAE AI campus, a major data centre project made with US technology that is set to become the largest hub of its kind outside the United States.
States.
Journalist Samir Hashmi has been speaking to the minister.
I asked him how significant American-made NVIDIA chips were going to be for this UAE AI plan.
These are very crucial chips because this campus the AI campus that was announced during President Trump's visit earlier this year, it's been billed as the largest AI campus outside the United States.
It's a joint project.
It's been built along by G42, which is a Emirati state-backed company, along with a lot of American companies.
OpenAI NVIDIA, SoftBank is involved, so is Intel.
So it's a massive project.
And as part of this deal, NVIDIA is going to be exporting some of its most advanced chips for this project, for the data centers that will be operated for OpenAI.
But the US has had concerns about China and the Chinese involvement in projects in the UAE.
So those are some of the concerns that the UAE had to address, which finally have been, which is why, earlier this month, the US gave a green light to NVIDIA.
It gave it an export license to start. exporting some of those advanced ships.
I did ask the minister about the quantity or the size of these ships that are being exported.
Just to be clear when we were working with China, we were not just working with China, we were working with the whole world.
We were working with Canada, the UK, China, the US and others.
And there wasn't any issue at that point of time.
Now today, we understand that there are some sensitivities.
With that, the UAE has made sure that it shows the US and other key partners that we've built a lot of our infrastructure with the US and that we'll continue to do so.
The thoughts there of the UAE AI minister.
So you were not, Hashmi, just speaking, of course, to the minister.
You were looking more widely at this issue.
You've spoken to Andrew Feldman.
Now, he's the founder and CEO of Cerebras, one of the big US-based AI chip companies.
He's been telling you, hasn't he, about the US and its relative position to China when it comes to this race.
What did he say?
Yeah, it's quite interesting, Ed, when I spoke to him.
Basically, his point is that if you look at the AI race, there are three legs to it.
One is infrastructure.
Second are the chips.
And third is the software.
Now his contention is that, when it comes to chips, the US has a massive, or has, an edge over Chinese companies.
But when it comes to infrastructure, he feels that China has an edge over the United States.
Because China is able to scale up these massive projects, whether it's energy dams, in a relatively quick time.
So this is what I ask him to explain.
Why does he feel like that?
I think over the past 10 years the Chinese government has made significant investments in their power infrastructure, in upgrading their grid.
In the US, we have a decentralized system, and that makes building power plants a local problem.
That even if the federal government wants to move policy forward, There's policy at the state level.
There's policy at the municipality and sometimes at the township level.
That is more challenging.
So it's been much more difficult for the US to build big projects.
Andrew Feldman there of Cerro Bras Technology.
Sammy Hashmi was speaking to me from the Gulf.
Now, George Conboy, chairman of Brighton Securities, still with us.
George, let's talk about Tesla very quickly before we go.
It's reported record third quarter revenue, beating Wall Street estimates.
But Tesla profits have fallen 37%.
What's going on?
What are we to make of this?
Right.
Top line is great.
But if the bottom line doesn't come in line, you have a problem.
And the product, beautiful product, wonderful product.
But without government subsidy, it's not competitive.
And Tesla is starting to struggle a little bit.
They're not going out of business.
But it's not going to be as easy a ride from here as it has been until here.
Right.
That's because it's lost those tax breaks it got from the Biden administration.
Right.
Thank you for that.
That's George Conboy there, chairman of Brighton Securities.
And that is just about all we have time for today here on World Business Report.
From me, Ed Butler, and the rest of the team here in Salford, thanks very much for listening.
