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Mark Bo is a researcher who has been based in East and Southeast Asia for two decades. He has worked globally with local civil society partners to monitor and advocate for improved environmental and social practices in development projects.

Ivan Franceschini is a lecturer at the Asia Institute, University of Melbourne. His current research focuses on ethnic Chinese transnational crime, especially in the field of online fraud.

Ling Li is currently pursuing a PhD at Ca’ Foscari University of Venice with a focus on the role of technology in enabling modern slavery and human trafficking in East and Southeast Asia.

For issue #144, we excerpt from their book, Scam: Inside Southeast Asia's Cybercrime Compounds. Here they explain the mechanics of 'compound capitalism' a predatory system that creates legal exceptions to exploit desperate workers as both labor and consumers through coercion, surveillance, and data extraction.

If these are the premises that made the emergence of scam compounds possible at this specific point in time in Southeast Asia, taking an even broader view, the evolution of the industry can also be seen as one of the latest manifestations of predatory capitalism, a model that we call compound capitalism. Compound capitalism combines some traditional elements of capitalist exploitation in novel ways. First, there is the issue of exceptionality. As Quinn Slobodian has pointed out: ‘Capitalism works by punching holes in the territory of the nation-state, creating zones of exception with different laws and often no democratic oversight.’ While traditionally this has occurred mostly in industrial zones and special economic zones (SEZs), scam compounds – with their high walls topped by barbed wire, heavily guarded entrances, and internal policing – represent the ultimate development of this perforation of state sovereignty: a situation that is paradoxically enabled by local and national state actors and complicated by the fact that the people locked inside remain constantly connected to the outside world through the internet.

Second, the labour regime in the scam operations is an extreme manifestation of a workplace-discipline model that is based on the provision and control of workers’ accommodation. In modern industry, when employers choose to provide accommodation to their workforce, this may be because adequate facilities are lacking; it may be a cheaper option for employers, but it also has the effect of ensuring a reliable workforce by developing a more protracted and dependent relationship for their employees and their families. While the wish to control workers and extract as much value as possible from their labour is not new, it has usually been masked with a paternalistic façade and the claim that workers are freely selling their labour. In some cases, though, the disciplinary nature of such an arrangement has been clear – as, for instance, in the compounds that until not so long ago were being built by mining companies in South Africa to house an all-male Black migrant workforce [or China’s ‘dormitory regime’.]

…

The labour regime that we are witnessing in the online scam industry today is much more coercive than any of these systems. Workers are often duped or drafted against their will, prevented from leaving, subjected to round-the-clock surveillance, and disciplined through the constant threat of arbitrary physical violence. As we have mentioned, many of those who enter willingly are also blocked from leaving, through either threats of violence or demands for exorbitant fees to break dubious contracts they were forced to sign on arrival. It is the norm for operators to confiscate and hold workers’ passports. And, unlike in South African mining compounds and Chinese dormitories, in today’s scam compounds there is very little scope for solidarity, with workers often feeling uneasy around their peers, and fearing that they will be informed on if they express a desire to leave.

There are also more subtle ways the workers in scam compounds are exploited. They are paid so-called salaries that are often much lower than promised and dependent on hitting performance targets. Interviewees told us how they had to pay a range of absurd fees for everything they used on site. To earn their keep, they are forced to work extremely long shifts, and even then their debts continue to accrue, adding to the ransom that their families may have to pay to get them out. At the same time, the compound economy is tightly controlled, and often the small businesses within the premises are run by friends and relatives of the managers, or people connected to them. These businesses thrive because they can take advantage of cheap or free labour and charge monopolistic prices that are substantially higher than in the outside world. Ultimately, workers in the scam compounds are exploited as both labourers and consumers.

Third, at a time when scholars debate surveillance capitalism, scam compounds represent yet another, extreme form of data extraction. Unquestionably, the efforts of the global tech giants to extract data from a largely oblivious population are becoming increasingly sophisticated. From this point of view, there are certain uncomfortable similarities between legitimate tech companies and online scam operations. Even though the latter remain labour-intensive – unlike the largely automated efforts of commercial companies that engage in data extraction through algorithms – both business models are based on the ability to entice and retain their targets by making them addicted to services (such as a caring voice in a time of loneliness that is a hallmark of pig butchering and other romance scams) and then manipulating their behaviour. Scam operations can be as sophisticated as legitimate tech companies. There are reports of advanced apps being developed with the specific purpose of tricking hapless targets into handing over access to their accounts, and deep-fake technology is now also being used to trick victims into parting ways with their cash. In a disturbing twist on the supposedly legitimate harvesting and trade in personal data that goes on around us every day, scammers are also known to recycle victim data, holding on to their details and approaching them later posing as companies that can help them recover assets. Victim lists are also sold to other scammers as potentially vulnerable targets.

Finally, just as capitalist exploitation is grounded in processes of dispossession and proletarianisation, the online scam industry preys on a workforce often rendered desperate by the lack of viable alternatives. This included people whose plight was exacerbated by the COVID-19 pandemic, but more broadly recruiters often target the young and people with limited economic prospects. There is no doubt that many individuals enter the scam compounds voluntarily, enticed by (often bogus) promises of high incomes and a good life. Yet, reducing the motivations of the industry’s willing workforce to pure greed is an oversimplification. While the industry long predates the pandemic, COVID-19 acted as a catalyst, providing scam operators with a new pool of labourers desperate enough to be willing to turn a blind eye to conditions clearly too good to be true. As the industry, in turn, flourished by taking advantage of people’s loneliness and desperation during the years of lockdown, we witnessed a predatory loop of desperation exploited at both ends, a dynamic akin to the ouroboros snake eating its own tail – which Nancy Fraser has aptly used as a metaphor for capitalism’s cannibalistic tendencies.

Excerpted with permission from Scam: Inside Southeast Asia's Cybercrime Compounds by Mark Bo, Ivan Franceschini and Ling Li. Published by Verso Books, 2025. 

The Internationalist Archive