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Risks to Economic Growth and Sustainable Development

Finance
Typography

Today's global threat environment is a multi-dimensional matrix connecting an incredible array of illicit actors and networks at critical nodes in space and time. The pipelines linking these threat actors and networks slice through borders, drain licit markets into illicit cesspools of wealth, and undercut the interests and security of our partners across the international community.

 Consequently, illicit trade and the wide availability of illicit liquidity not only prevent fair and open markets from reaching their full economic potential and threaten state sovereignty, but the hard truth is that illicit trade also decays communities as kleptocrats, criminals, terrorists, and illicit networks dominate every facet of life in certain communities, and endangering the health and safety of our people and destroying our vital habitats and ecosystems:

•   In addition to the corrupting and destabilizing harms of illicit drugs to societies every year based on the staggering tens of billions of dollars in its trade – regionalized drug epidemics, increased drug use, and high relapse rates impose enormous economic costs that further tax communities, including the costs of healthcare programs to treat drug abuse, lost productivity, support for law enforcement and the criminal justice system to counter violence and criminality, and costs to fund other social programs. Of increasing concern is the alarming lower age for the initial onset of drug use (e.g., in many parts of the world, drug addicts as young as 4-8 years of age have been detected for the first time); the high purity of drugs such as Afghan heroin and a the impurities/toxic cutting agents in Latin American crack cocaine that are causing a public health crisis, especially among children;

•   The high-profit, low-risk dumping of toxic waste by organized criminal groups contaminates food and water supplies, while illegal logging and deforestation exacerbate climate change concerns;

•   The poaching and trafficking of endangered wildlife species for the production of traditional medicines and other uses destroy vital habitats and ecosystems and robs governments and citizens of their natural resources and national treasure;

•   Counterfeit pharmaceuticals endanger public health, as well as the lives of individuals, by denying the sick effective treatment and allowing deadly diseases to mutate and become untreatable; and

•   Trafficking in persons devastates communities and wastes the most precious resource of any community – its people – tearing families apart and violating individuals’ basic freedoms and dignity instead of investing in human capital through education and skills-development training to help emerging economies become the new markets of tomorrow.

As some have underscored, the illegal economy obeys no laws except the law of the strong, the corrupt, and the criminal; impunity, coercion, lawlessness, unrest and violence reign.

From an economic perspective, all of these illicit activities divert money from the balance sheets of legitimate businesses and put cash in the hands of criminals, who build larger and larger illicit networks. These networks threaten the stability of governments and the prosperity of our economies. National revenue and assets intended to finance the future are instead embezzled and stashed away for private gain, impairing the ability of communities and businesses to make the investments necessary to create resilient pathways for economic growth and give people hope for a brighter tomorrow.

Illicit trade and the illegal economy also undermine the social stability and socioeconomic welfare of our communities. Illicit enterprises not only divert opportunities from the legal economy, they also divert revenue threatening economic growth and development and preventing the equitable distribution of public goods. But this goes beyond just the economic harm. The illegal economy also incurs a significant negative social cost.

Consider how criminals undermine fair labor conditions through exploitation of persons in the illegal economy such as coca and heroin cultivation and in industries as varied as manufacturing counterfeits, agriculture, tourism, and elder hostels. Equally damaging is the environmental damage resulting from criminals’ penetration into illegal logging, wildlife trafficking, waste hauling, and fishing. Instead of producing wage earners for tomorrow’s markets and investments, the communities most at risk of exploitation by illicit networks are saddled with the negative externalities of the illicit economy.

The grim reality is that revenue that could be used to build roads to facilitate commerce, hospitals to save lives, homes to raise and protect families, or schools to educate our future leaders are lost to kleptocrats, criminals, and terrorists whose only interest in the future may be to destroy it.