Terrorism remains a potent threat in parts of Southeast Asia, even though efforts to counter extremism have yielded fruit in some countries, a first-of-its-kind report suggests.

The newly-launched Global Terrorism Index (GTI), published December 4th, ranks 158 countries based on the number of terrorist attacks, the number of fatalities and injuries from terrorism, as well as the estimated property damage. It is produced by the Institute for Economics and Peace (IEP).

Two countries in the region – Thailand and the Philippines – were in the top ten, indicating a high risk of terrorist activity. Thailand, struggling to contain a shadowy insurgency in its southern border provinces, ranked 8th. Among Southeast Asian nations, it was first on the list.

"Out of the terrorist attacks which were claimed or attributed to a group, almost all entirely are related to the insurgency in the south of the country between Muslim separatists and the Thai government," the report said, while noting that the perpetrators remain unidentified in 85% of attacks.

"The main targets excluding private citizens were businesses, police and educational institutions including schools which terrorists regarded as representing the Thai government," it added.

In the Philippines, meanwhile, militant groups representing a spectrum of ideologies – from Islamist extremism to Marxism-Leninism -- continue to wreak havoc. Ranking 10th on the list overall and second in Southeast Asia, the country is currently finalising a peace deal with one of the main militant outfits, the Moro Islamic Liberation Front.

"Terrorism in the Philippines is intrinsically tied with nationalist separatist claims by people living in provinces in the Southern Philippines," the report said.

Extremists in Indonesia rebuild their ranks

The worst terrorist attack in Southeast Asia during the past decade occurred in Indonesia, where militants linked to the Jemaah Islamiyah network bombed a crowded Bali resort in 2002, killing over two hundred people.

Counterterrorism police have since broken up the main terrorist networks and imprisoned or executed key militant operatives. But militant cells continue to operate, often in areas of the archipelago where the government and police have more limited reach. Karanganyar (Central Java), Madiun (East Java), Poso, and Ambon have emerged as hotspots in recent years.

The country ranked 29th on the GTI -- significantly below Thailand and the Philippines, but above Malaysia, which was 91st.

"In 2012, Indonesia has found many new faces of terrorism," Al Chaidar, a terrorism expert who focuses on Indonesia, told Khabar Southeast Asia via telephone. "There are many factions among the networks; they are growing and establishing other smaller groups."

Many groups train in heavily forested mountains, away from local communities, he said. There they learn to shoot and make bombs.

Compared to earlier militant networks, the emerging groups "focus more heavily on recruitment, and their strategies are now more developed", Chaidar said.

Despite the changing profile of extremism, younger militants still have ties to their predecessors, he said. For example, a 19-year-old terror suspect named Farhan Mujahidinwho was killed in a shootout with police in Solo on August 31st, is the stepson of Abu Omar, a member of Jemaah Islamiyah with ties to Abu Sayyaf. Abu Omar was arrested in July 2011 for attempting to smuggle weapons from the Philippines into Indonesia and Malaysia; he is now serving a ten year prison sentence for the smuggling operation.

Militants feed off of poverty, identity crisis

The GTI shows the urgency of countering efforts by extremist groups to attract a fresh generation of operatives, Indonesian sources told Khabar.

Purnama Wirtana, 48, said more active intervention is needed. "The first step is really to stop the recruitment. Then we need to be ready with intelligence in order to cut terrorist funding," he said.

Eric Hiariej, a professor at Gadjah Mada University, said terrorist groups are able to capitalize on economic grievances and psychological confusion.

Terrorists are not only motivated by religion but also by a "torn identity", he told Khabar.