Underground Economy along the Indonesia–Malaysia Maritime Border in Sebatik Island: Between Labour and Trade

DOI

10.2991/978-2-38476-545-4_80How to use a DOI?

Keywords

Underground economy; maritime border; labor; trade; Indonesia-Malaysia

Abstract

This study analyzes the dynamics of the underground economy in the Indonesia-Malaysia maritime border region, particularly on Sebatik Island, in the context of labor migration and illegal trade. Illegal economic activities such as labor smuggling and the smuggling of basic necessities are part of the adaptive mechanisms used by border communities to cope with limited access to the formal economy. This study aims to understand the transformation of sea lanes as socio-economic spaces, as a result of state neglect of illegal activities, while also examining cross-border economic integration that creates dilemmas in transnational governance. Using a qualitative approach through field observations, spatial mapping of smuggling routes, and secondary data analysis, this study finds that underground economy practices in border areas systematically manipulate regulations designed to reduce costs and build alternative economic-political structures that support the livelihoods of local communities. This phenomenon confirms the state’s failure to monopolize economic and security authority, as well as the community’s ability to build an adaptive economic system through the utilization of maritime space as infrastructure for informal economic circulation.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Yahdi Qolbi
AU  - Mujibburahman
AU  - Imam Syahid
AU  - Asbudi
AU  - Muh Fichriyadi Hastira
PY  - 2026
DA  - 2026/03/13
TI  - Underground Economy along the Indonesia–Malaysia Maritime Border in Sebatik Island: Between Labour and Trade
BT  - Proceedings of the World Conference on Governance and Social Sciences 2025 (WCGSS 2025)
PB  - Atlantis Press
SP  - 1127
EP  - 1141
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-545-4_80
DO  - 10.2991/978-2-38476-545-4_80
ID  - Qolbi2026
ER  -