Global Financial Integrity – ‘Transnational Crime in the Developing World’

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Global Financial Integrity, a branch of the Washington, D.C.-based Center for International Policy, released a new report today entitled “Transnational Crime in the Developing World.”  Its authors detail the devastating environmental, political and economic effects of transnational crime, shedding light on the manner in which criminal activities flourish in the weak states of the developing world.  According to the report, transnational crime brings in $650 billion annually, and can be divided into twelve main markets.

These twelve major illicit  markets, and their annual profits, are ranked as follows:

1. Drugs – $320 billion
2. Counterfeiting – $250 billion
3. Humans – $31.6 billion
4. Oil – $10.8 billion
5. Wildlife – $7.8 to $10 billion
6. Timber – $7 billion
7. Fish – $4.2 to $9.5 billion
8. Art and Cultural Property – $3.4 to $6.3 billion
9. Gold – $2.3 billion
10. Human Organs – $0.614 to $1.2 billion
11. Small Arms & Light Weapons – $0.3 to $1 billion
12. Diamonds & Colored Gemstones – $0.86 billion

From the report’s executive summary:

“This report analyzes the scale, flow, profit distribution, and impact of 12 different types of illicit trade: drugs, humans, wildlife, counterfeit goods and currency, human organs, small arms, diamonds and colored gemstones, oil, timber, fish, art and cultural property, and gold. Though the specific characteristics of each market vary, in general it can be said that these profitable and complex criminal operations originate primarily in developing countries, thrive in the space created by poverty, inequality, and state weakness, and contribute to forestalling economic prosperity for billions of people in countries across the world.[…]

“The final and most critical point is that criminal networks, which function most easily where there is a certain level of underdevelopment and state weakness, have very little incentive to bolster the legitimate economies in the countries where they operate. Unregulated, they minimize overhead in developing source countries by exploiting local labor forces, often resorting to forced or child labor, dodging environmental and safety regulations, and evading trade tariffs. Any improvements in economic development and governance would usually hinder their illegal activities, so it is in their best interest to actively prevent their profits from flowing into legitimate developing economies. In this way, transnational crime and underdevelopment have a mutually perpetuating relationship.

Read the full report (.pdf)

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