Economies around the world are facing the blight of illicit trade, but perhaps nowhere more so than in Asia-Pacifc. The region, long a source of supply for illicit goods—be it counterfeits, drugs, or traffcking in humans or illicit wildlife—is now emerging as a major source of demand, compounding the problem signifcantly.
And although not much hard data are available, it is quite clear that “due to rising affuence in Asia and other major consuming economies, illicit trade volumes have gone up,” says Steven Galster, founder and executive director of the Freeland Foundation, an Asiabased non-governmental organisation (NGO) focused on environmental conservation and human rights, who cited the trade in endangered species, specifcally.
As a result, wildlife species are disappearing at alarming rates; pirated and mislabelled products are traded freely across borders and sold openly within them, with varied rates of concern and control on the part of governments; narcoticsrelated incidents1 frequently make headlines of regional newspapers; human traffcking is becoming even more common, abated and masked at the same time by various refugee crises in South-east Asia; illegal logging remains a threat to deforestation throughout the region, spurring corruption and lining the pockets of criminals with piles of cash; and illegal arms sales are rampant.
The Global Illicit Trade Environment Index is a tool not to measure the size of the problem, but to better understand underlying vulnerabilities in economies that give rise to illicit trade or fail to inhibit it. Although the size of the problem in monetary terms is hard to measure, it is clear the sums of illegal money involved are huge, and there is a consensus on the need to curb illicit trade. Through this study, we hope to provide insight on how economies can use the tools at their disposal to create the right environment to do so.
Given Asia’s geographic, economic and political diversity, it should come as no surprise that its economies have had varying degrees of success in—and varying attitudes towards—combating illicit trade. As the region continues to grow, and as it moves towards deeper economic and trade integration via various trade agreements and related initiatives, such as the Association of South-East Asian Nations (ASEAN) Economic Community (AEC), there will be an attendant need for it to implement stricter policies on illicit trade. Its record so far is not encouraging.
There have, however, been some positive developments in recent years, says Jeremy Douglas, regional representative of the UN Offce on Drugs and Crime (UNODC) for South-east Asia and the Pacifc. Mr Douglas notes that there has been “increasing political interest” in addressing illicit trade and [we are seeing] a couple of key ASEAN member states prioritising action on border management and scanning illicit fows of all kinds. Nevertheless, he does caution that political interest “hasn’t translated into practical change yet”.
To measure how nations are addressing the issue of illicit trade, the Transnational Alliance to Combat Illicit Trade (TRACIT) has commissioned the Economist Intelligence Unit to produce the Global Illicit Trade Environment Index. The global index expands upon an Asia-specifc version, originally created by The Economist Intelligence Unit in 2016 to score 17 economies in Asia on the extent to which they enabled or prevented illicit trade. The Asian index generated much-needed attention on the issue of illicit trade within the region. Building upon the success of the Asia index, the global index now includes 84 economies, providing a global perspective and new insights on the social and economic impacts of illicit trade.
This briefing paper focuses on the 21 economies in the Asia-Pacifc covered by the index. For an explanation of how the global illicit index differs from the 2016 index, please consult the methodology in the appendix.
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