Major Developments:
‍‍Malaysia Creating a joint Special Economic Zone including Johor and Singapore.
‍The size of the zone would be over 3,500 sq km.Both Malaysia and Singapore agreed to the SEZ in January, and Malaysian officials hope to have plans finalized by the end of the year.The zone is aiming to target 16 sectors in Malaysia, and includes the Johor Bahru city center and the controversial Forest City investment project.Officials traveled to China this week to solicit investment and promote the plan.
‍Transnational Crime in Southeast Asia Identified by US Institute of Peace as a growing concern.Criminal networks originating in China have been expanding across Southeast Asia, with concerns about potential impacts on regional stability and national security. These organizations have particular presence and influence in Myanmar, Laos, and Cambodia, according to the report.The organizations often conduct both legal business and illicit operations, allowing them to provide incentives for corrupt officials or weak local governments to provide support.Activities include online gambling, scam operations, and human trafficking, but the money laundering activities of the criminal groups also spread to every country in the region.These organizations often target Americans with scams.
‍Indonesia’s incoming President Lays out Foreign Policy Strategy.President Elect Prabowo discussed his “Asian Way” foreign policy strategy, stating that diplomacy and negotiation have been a key part of Indonesian stability.Asked about Indonesia’s stance on China-US competition, Prabowo stated that he was grateful for US and US-aligned nation’s assistance, but the fact that Indonesia is friends with the US doesn’t mean it can’t also be friends with China, Russia.Prabowo seems committed to Indonesian non-alignment and more focused on domestic issues for now.
‍ Indonesian Bid for Accession to the OECD Continues to Make Progress.Indonesia’s president has appointed a team dedicated to accelerating the membership process, and the country recently submitted its accession roadmap.OECD membership could bring Indonesia’s regulatory systems towards international standards and boost investor confidence.OECD membership could help Indonesian economic growth and encourage other ASEAN countries to align their regulations to international standards.

‍Headlines from around Southeast Asia:
‍‍The War in Gaza is Causing Heated Responses across Southeast Asia.‍Flash Floods and Lava Kill Dozens in Indonesia.‍Second Deepwater Natural Gas Well Discovered off the Coast of Indonesia.‍South Korea Considering Indonesia’s Proposed Cut to Joint Fighter Development Program.‍Indonesian Finance Minister Discusses OECD Accession, Economic growth, Geopolitics.‍A Second Trump Term Could Intensify Tensions in Southeast Asia.
‍‍Commerce Bridge Summary of the Week:

In Southeast Asia this week, the announcement of the joint Special Economic Zone (SEZ) between Malaysia and Singapore underscores a significant step towards deeper economic integration in the region. The creation of such a large-scale zone spanning two countries signals a commitment to fostering cross-border collaboration and streamlining business operations. From a broader international context, this initiative not only enhances the economic ties between Malaysia and Singapore but also positions the region as an attractive destination for foreign investment. Of course, given the difficult status of other massive investment projects like Forest City, there is no guarantee that this new SEZ will be a major success. Meanwhile, Indonesia's continued pursuit of OECD membership reflects a promising potential for movement towards regulatory streamlining and adoption of international standards. For businesses eyeing expansion into the region, Indonesia's efforts towards OECD membership could potentially streamline regulatory processes and foster a more conducive business environment, thereby facilitating market entry and growth opportunities.

However, amidst these economic developments, the US Institute of Peace's identification of transnational crime as a growing concern serves as a reminder of the challenges that come with increased regional integration and investment in the region. The presence of robust criminal networks, particularly those originating from China, underscores the importance of effective governance standards and law enforcement mechanisms to safeguard against and respond to illicit activities. For businesses operating in Southeast Asia, navigating these risks becomes crucial, necessitating comprehensive due diligence and compliance measures to mitigate potential exposure to criminal activities and regulatory scrutiny. It also highlights the spillover effect of corruption and weak government institutions in the region.