The Fourth Largest Illegal Trade in the World Is Probably in Your Medicine Cabinet

Note:

Written in March 2024 for a Southeast Asian Economics course at UC San Diego's School of Global Policy and Strategy — the second policy paper I submitted for the course that quarter, the first being on digital trafficking. Wildlife trafficking generates an estimated $7-10 billion annually and is deeply entangled with poverty, corruption, and the same criminal networks behind other forms of illegal trade. The paper argues that enforcement-only approaches are not only insufficient but actively counterproductive — and that the path forward runs through economic incentives and community involvement, not crackdowns alone.

Exclusionary and Unsustainable: Southeast Asia’s Wildlife Trafficking Crisis

Abstract

Southeast Asia (SEA) remains one of the central nodes in global wildlife exploitation networks. Demand stems from several factors, including medicinal ingredients, luxury goods, exotic pets, and food¹. The complicated relation to larger criminal networks means that tackling some of the drivers behind local supply is more feasible. Illegal trade is sustained by the prevalence of economic incentives and weak institutions, providing a starting point for solutions. Here, the question is whether the legalization of trades could mitigate illegal supply and provide economic incentives in SEA. By quantitatively analyzing economic incentives and using qualitative case studies, recommendations of selectively legal trade and the encouragement of conservation tourism will be supported. 

Background

Wildlife trafficking is broadly defined as the “commerce of non-domesticated animals or plants, usually extracted from their natural environment or raised under controlled conditions, either as living or dead animals or their body parts”. As such, it covers a wide range of critical issues relating to ecosystems, economics, and development factors. The modus operandi of these criminal networks varies from poaching to online trading. Global revenues are estimated between 7 to 10 billion USD yearly -- and when combined with unregulated fisheries and timber, comprises the “fourth largest global illegal trade”².

Trafficking also affects the human population -- achieving any sustainable development, economic growth, or environmental action must address this critical issue². To determine which countries would be focused on for case studies, data from the United Nations Office on Drugs and Crime (UNODC) was manipulated to look at both the quantity (kg) and live equivalent of various species that originated in or were traded to each country in SEA. It was found that Thailand and Vietnam consistently had the highest numbers – both for the origin and destination of trade – thereby being the most appropriate to utilize as evidence (Appendix A)⁴ .

Poverty and Economic Incentives

Poverty is a significant driver in wildlife trafficking, as it encourages locals to hunt in exchange for rewards – and a relatively low risk^,,. There are some interventions, like livelihood schemes and heavier enforcement, but these don’t encapsulate the deep rootedness of trafficking as a community sustainer. Additionally, the use of force or deterrence creates “poor relations between conservation authorities and local people by restricting access to resources” in the region that may not be illegally traded ^1,9. This also exacerbates regulatory gaps (Appendix B). 

Vietnam, which is both a transit point and a major consumer market, can be studied here^,.  The annual profits from illegal trade are over 3 times the budget for forestry staff and fine collections, resulting in about “12 times the total annual revenue from legal trade”. Given the high number of “forest-dependent” people, low rural incomes, and some high unemployment, wildlife farming is very lucrative. One market, snake farming, “provides an average income of USD 93 a month for each working resident…helping alleviate poverty in the locality,” which is far beyond other means of income²². With this, it becomes clear that simply encouraging deterrence or increasing crackdowns will only alienate communities that rely on trade for livelihood. Globally, little research and policy changes occur to fix this pain point in the trafficking network. As such, it is teeming with potential for mitigation. 

Weak Institutions and Corruption

Corruption and judicial weakness allow networks to flourish without fear of consequences. There are multiple points of entry for corruption; border crossings, airports, and ports are physical avenues and legal gaps structural paths (Appendix C)^,. The Organization for Economic Co-operation and Development (OECD) collected reports over a 10-year period that displayed the hierarchical position of corruption per country; as such, there were only 6 reported in Thailand and 7 in Vietnam; this is a severe underestimation (Appendix D, E)¹² . 

Of course, countries can follow Thailand’s response and robust legal framework to some degree. As per a 2020 survey, 15% of 1000 Thai consumers “had personally bought, or knew someone who had bought, wildlife products in an open wildlife market,” as it is one of the largest points of transaction in SEA. Thailand’s Land Transport Federation approached this with a new agreement to combat illegal trade. This resulted in several seizures; Thailand continues to shift its focus to cross-country frameworks, utilizing its expertise to approach this issue in a top-down manner. Yet, zones such as the Tiger Temple continued to function with little impunity, allowing The United Nations’s (UN) “Convention on International Trade in Endangered Species of Wild Fauna and Flora” (CITES) -protected species to be trafficked through loopholes in the Wild Animal Reservation and Protection Act^, (Appendix F). 

Policy Recommendations

Given that “just stopping corruption” is an idealistic goal, there are 2 alternate recommendations to tackle this issue – each with their own benefits and consequences. The first is to legalize specific trades and involve local communities. A 2019 report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) found that local and indigenous management of biodiversity, helps mitigate environmental decline while also promoting economic benefits for underserved populations (Appendix G, H)^,.

A second recommendation is to incentivize conservation tourism and protection. Research has been conducted regarding this policy, indicating “tourism can reduce poverty, provide economic incentives to individuals and communities, and encourage people to change behaviors towards wildlife” (Appendix I). It also encourages conservation efforts from the government as it directly funnels into the national economy. Both recommendations serve similar purposes and are linked in their implementation and outcomes. 

Implementational Difficulty and Workarounds

One major hindrance to legalizing specific trades is the burden on developing countries – the resources needed to analyze specific species sets a high bar, and qualifications and consistency in classification is nuanced ^22,. Trade legalization, if not supplemented, may also not provide tangible benefits to locals because “most protected areas do not create sufficient revenue to offset the costs to communities of maintaining them and benefits are often unequal”. Essentially, the legal economic benefits are seen as “add-ons” rather than alternatives to the substantial value found in illegal markets²⁸. This may complement weaker enforcement of laws, as partial legalization is often seen as easily circumvented due to regulatory laxness. Yet the alternative is to attempt more strict enforcement -- which denies local communities the rights over their land use, and also increases the allure of purchasing or selling exotic items. 

With wildlife tourism, issues center around it being “overdone” and leading to further environmental degradation. The sheer volume of tourists often threatens natural environments due to mismanagement and a lack of regulation²⁴. Yet there are several stories of success, such as over 25 biodiversity hotspots across SEA and numerous conservation parks. Additionally, tourism directly alleviates poverty as locals can be engaged as both operators and conservators – and tourism boosts small business profits²⁴. It should be viewed as a central investment in the fight against illegal trade and a benefit to local communities as well as the overall economy²⁴. 

Conclusion

Even with implementational difficulties, legalization will reduce the impacts of illegal wildlife trade. The process is almost circular, with illegal trade being supported by weak institutions (even with strong regulatory measures), leading to poverty as legal livelihoods are eroded – which causes underserved locales to turn to wildlife hunting to make up household earnings. Interventions must happen at every step to break the cycle, but one place to start is from the ground up. A critical way to approach this is by re-analyzing legal trade methods and to encourage wildlife tourism – and subsequent protection. Allowing communities to be involved in sustainable trading will help encourage the breaking of ties with larger crime rings, and the revenue from wildlife tourism can be funneled into protectionary measures. This then provides a tangible solution to economic and environmental concerns, motivating the decline in illegal trade across Southeast Asia -- and thereby the globe. 

Appendix

Appendix A - Country Selection

Extant literature names Thailand, Vietnam, and Cambodia as locations with the highest demand for illegal wildlife products. In fact, these countries appear frequently on intergovernmental watch lists (along with most of SEA, but these are usually higher up).

Using data from UNODC, countries in SEA were filtered and then graphed to figure out consistently high numbers of export and import both in quantity (live) and in kg of animal products. Thailand, Vietnam, Malaysia and Cambodia consistently were at the top of each list. Thailand and Malaysia were the highest for source countries, and Vietnam was the highest destination country. As such, Thailand and Vietnam were chosen to show both sides of the network -- sourcing and destination -- before international trade.

Table depicts the source countries for the trade of various animals and parts. 

Table depicts the destination for the trade of various animals and parts. 

Appendix B - Regulatory Gaps

The United Nations' Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is one of many regulatory policies, along with the Lacey Act (which focuses specifically on illicit trade). Yet, several gaps in the protectionary measures have been discovered. While physical trafficking numbers appear to have decreased since the start of the pandemic, figures ignore online sources, stockpiles, and decreases in enforcement. It was thus found that COVID exacerbated poverty, increasing illegal hunting and trade -- with a newfound reliance on online services, doubling the presence of products since 2015. Additionally, it has been found that illegal trade is prevalent especially in countries that lack the capacity to deal with the “ever-increasing sophisticated crime rings,” regardless of “CITES and national scale regulations”. Regulatory frameworks do not account for these “loopholes” and are thereby easily manipulated. Even with thousands of successful seizures and government interventions, it’s clear that

“ What must be eradicated are the many basic enabling factors that drive and fuel illegal trade…” and “[SEA] is source, consumer and transit personified. Only political will at all levels of government and a willingness to act will break the grip of illegal trade chains and networks” 

-- Kanitha Krishnasamy, Director for TRAFFIC in Southeast Asia.

The basic driving factors, on the supply side, link to poverty and weak institutions -- so providing recommendations that take into account local incentives is key. 

Appendix C

This table was sourced from the OECD, and displays the various cases that involve corruption. There is often corruption at ports of entry – maritime, airports, land borders – and legal loopholes make it difficult to enforce laws . As per the OECD report:

“Seizures of pangolin are reported to be the most traded form of illegal wildlife trade along the border regions of focus, followed by other goods such as carved ivory, big cats, rhino horn and various live animals (UNODC, 2013[35]). The role of the northern border regions highlights Viet Nam’s position as a major transit and transshipment country for illegal wildlife trade along the route to China”²⁹. 

Appendix D - Anti-Corruption Frameworks and Illegal Trade

The table above displays the various frameworks against corruption in SEA countries . As per the table and article, many have increased public integrity frameworks, especially since “several high-profile corruption cases involving senior government officials in Thailand and Indonesia and VietNam have taken place in public, and the public is becoming more aware of the effects of graft and abuse of power due to extensive media coverage of high-profile cases”²⁹. 

Appendix E - Corruption Case Studies

There are several large corruption scandals that have been uncovered over the past few years. A few relate to the countries focused on in this paper:

In April 2018:

“A Vietnamese Customs Officer in a shipping port and Export Processing Zone outside of Ho Chi Minh City was sentenced to 12 years in jail for accepting bribes and abuse of power to facilitate trafficking and trade fraud. Court reporting indicates that the individual in question was also likely acting as part of a broader network”.

In 2017:

“The Viet Nam Ministry of Public Security arrested two customs officers on corruption charges 2017 over the disappearance of over 200 shipping containers as part of a co-ordinated scheme to import goods in-transit”.

Appendix F

Thailand has several legal frameworks in place to address trafficking as well as corruption. It is one of the most protected countries in the region regarding this issue, but has consistently maintained its position at the top of trafficking warning lists. A strategic shift from its current domestic-focused policies to more broad supply chain and ground-up methods would help address regulatory issues. One large loophole is in the 2014 Wild Animal Reservation and Protection Act, where animals are smuggled into Thailand and then traded as “captive-bred specimens” globally³³. 

For example, the breeding of Tigers is currently prohibited by law and possession is must be licensed – usually to zoos for non-breeding and non-commercial purposes. However, the Tiger Temple has a breeding program that had been operating “with impunity” for years. It was masked as a conservation center and tourism hub, but in 2016, officials raided and shut it down³⁴. This is an ongoing story as officials attempt to determine genuine conservation areas from illegal centers for trade. There are several literature sources tracking not only Thailand, but other SEA nations’ efforts to curb pseudo-conservation areas as well as breeding programs. CITES continues to be amended to provide legal frameworks and punitive measures, but yet again, the process is slow and populations diminishing. 

Appendix G - Environmental Restoration

Research is finally being conducted into indigenous and local knowledge and its impact on sustainability. The IPBES report co-chairs stated that biodiversity should be looked at as common heritage, but is being stretched to the “breaking point”. The report provided several actions for sustainability across the world, depicting how intersectionality between areas like agriculture, freshwater systems, urban areas, and finance is the only way to account for the trade-offs in management and conservation³⁷. Well-managed wildlife trade is critical to protect biodiversity without taxing natural environments; and can help support “local livelihoods so that future generations can continue to secure an income by not driving declines in wild populations”. CITES also faces a key problem with proposals that limit or ban species trade “without considering how this will impact those communities where wildlife is harvested” and therefore removes a key means of sustenance for several. 

Appendix H - Sustainable Communities

Legal wildlife trade exists around the world, but is overshadowed by the illegal variation; this ignores the high economic impact that it has for various nodes in the supply chain. As a fundamental part of national and international economies, it stands that trade, if conducted sustainably, can be an agent for positive development³⁸. 

One example, not from SEA, is regarding vicuña; in the 1960s, the population had crashed to the brink of extinction, but the numbers are significantly higher and no longer under direct threat – due to the controlled trade done by local communities . Local communities are far more knowledgeable about sustainability practices; biodiversity is “declining less rapidly in areas where it is owned and managed by indigenous people and local communities”³⁹. 

The main factor in allowing for sustainable practices in communities is to look at the actual biology of the species, such as reproduction rates and the manner in which they are being used – and some farming and trade is good for conservation (in species like crocodiles)³⁹. Being aware of these restrictions and benefits, and managing trade for populations like parrots or pangolins that cannot be caught easily or reproduce as quickly is critical³⁹. Structuring the supply chain and involving local communities can lead to benefits for the producer, consumer, and the environment. Anastasiya Timoshyna from TRAFFIC says that people should celebrate products made naturally with wildlife extracts (such as shea butter), since they support local communities, as “Trade that is sustainable benefits everything” ³⁹. 

Appendix I - Wildlife Tourism

There are several concerns over the sustainability of wildlife tourism. As such, there are examples of countries that have created regulations that mitigate these issues. In Thailand, there are a number of incentives that focus on these concerns -- such as the Tourism Authority of Thailand’s push to reduce plastic garbage by 2020. Additionally, media and research focuses on how to involve hotels and tourists to address waste problems and encourage sustainable interactions with the environment⁴². Encouraging tourism also improves the economic incentives to preserve wildlife rather than disturb or damage it. 

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