MANILA: Criminal networks operating across South-East Asia are hurting the region’s investment appeal, a new report warned, which flagged four “criminal hubs” that it said are exploiting legitimate businesses, trade routes and economic zones.
In a study commissioned by the EU-Asean Business Council, the International Institute for Strategic Studies (IISS) identified the major criminal hubs as the Golden Triangle spanning Laos, Myanmar and Thailand; parts of Myawaddy in Myanmar; Sihanoukville in Cambodia; and Poipet along the Thailand-Cambodia border.
These areas pose “major international and security risks” as they serve as grounds for illicit activities including cybercrime, human trafficking and money laundering, the report said.
While the Philippines was not included among the four hubs, the report noted that cyberscam operations and casino operations had expanded in the country and elsewhere in the region, particularly following China’s crackdown on similar activities.
It also flagged North Korea’s use of casino and cryptocurrency in the Philippines as part of its state-sponsored cyber operations.
“Criminal networks fuel illicit trade, threatening not only regional security, but also economic resilience,” EU-Asean Business Council executive director Chris Humphrey said in a statement.
“They point to cracks in governance and the rule of law, undermining the stability and predictability that businesses need to commit long-term investment in South-East Asia,” Humphrey added.
According to the report, many of the region’s criminal hubs are either located in or near special economic zones, whose “permissive” regulatory and financial environments have opened up opportunities for illicit activities.
It warned that criminal proceeds were increasingly finding their way into legitimate sectors, including real estate, tourism, logistics and financial technology.
“While supporting legitimate economic activities, these environments have also created opportunities for illicit financial flows and transnational organised crime,” the report said.
Beyond investment risks, illicit trade also creates unfair competition for legitimate businesses while weakening supply chain integrity, the council said.
Illicit tobacco trade is estimated to have cost the Philippines and five other Southeast Asian economies more than US$13 billion in combined government revenues in 2024 and 2025.
To address these threats, IISS called for stronger financial oversight, intelligence sharing and cross-border law enforcement.
It cited the Philippines’ maritime security cooperation with Indonesia and Malaysia as a model for disrupting transnational crime, noting that coordinated patrols and intelligence sharing had helped curb illicit activities in the Sulu-Sulawesi Sea.
“Businesses see the immense appeal of trading and investing in South-East Asia, but that needs to be matched with strong governance and regional mechanisms that protect legitimate business,” Humphrey said. - Philippine Daily Inquirer/ANN
