Tracing Southeast Asia’s Illicit Drug Supply Chain

In recent years, the illicit drug trade in Southeast Asia is becoming more integrated within the region as well as with the wider Asia Pacific region. With a well-greased supply chain to meet an ever-increasing demand, criminals are turning the regional drug trade into an underground economy that can rival the GDP of some small countries. By Lee Kok Leong, executive editor, Maritime Fairtrade

Southeast Asia’s illicit drug trade has grown to be one of the biggest in the world, helped in part by a steep increase in the manufacture of synthetic drugs, especially methamphetamine, which have reached countries as far as Japan, South Korea, Australia and New Zealand, where they account for about one-third of the total value of the meth market because of the high retail price.

Nevertheless, traditional opiates still remain a problem and the value is estimated at around US$10 billion annually. So, together with synthetic drugs, the total illicit drug market is worth a staggering US$71 billion annually.

At the same time, the many casinos spread around the region, particularly in Cambodia, Myanmar, Lao and the Philippines where there is a lack of regulatory oversight, are acting as a conduit to launder drug money.

While some countries in the region have robust law enforcement and border management, others are lax, and are affected by corruption, bureaucratic loopholes and limited cross-border cooperation. So, as with any other businesses, drug cartels will always seek out conditions that increase profitability, while minimizing risk and cost.

With regards to a relatively safe and reliable supply chain, they rely heavily on legal trade to camouflage their illegal activities, sometimes by mis-declaring the content and country of origin and embedding the drugs in legal cargo.

In recent years, most of the drugs ride on the same infrastructure and routes as legitimate trade, in part because of freer movement of people and goods facilitated by more regional free trade agreements and connectivity initiatives that aimed to boost economic growth.

However, some drugs are still smuggled clandestinely across borders through unofficial seaports or along jungle tracks, the same routes that were once used by criminals hauling opium and heroin on mules through the jungles of the Golden Triangle.