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    26 January 2011

    Globalization's sinister entrepreneurs hurt economic growth says UNODC

    VIENNA, 27 January (UN Information Service) - "Transnational crime is undermining economic growth, posing an added challenge to the world's economies as they struggle to recover from the global fiscal crisis," said Yury Fedotov, Executive Director of the United Nations Office on Drugs and Crime (UNODC) at the annual gathering of the World Economic Forum (WEF) in Davos, Switzerland (25-30 January 2011). Criminals undercut legitimate commerce and divert billions of dollars from development into illicit enterprises whose profits are used to buy elections, politicians and power, and in some cases support terrorism. "We must disrupt and dismantle criminal networks as a matter of priority," he said.

    The world's biggest economies are also the biggest markets for illicit trade. But organized crime has itself become one of the world's foremost economic forces, with illicit markets sometimes generating more than the GDP of many countries, he said. Exploiting open borders and communications, criminals opportunistically cater to changing demands - endangered species, cultural artefacts, timber, counterfeit medicines, blood diamonds, child pornography or cheap labour.

    According to a recent UNODC report on The Globalization of Crime: A Transnational Organized Crime Threat Assessment, here are some examples of crimes and the costs involved:

    • Trafficking in persons to Europe for sexual exploitation brings in $3 billion annually and involves 140,000 victims, mostly women and children.
    • Smuggling of migrants from Latin America to North America earns $6.6 billion from 3 million illegal entries each year.
    • Heroin trafficked from Afghanistan to Europe has a street value of $33 billion. The global market for Afghan heroin is worth some US$55 billion.
    • Of the US$72 billion cocaine market in North America and Europe, some 70 per cent of the profits are made by dealers in the consumer countries.
    • The global market for illicit fire-arms is estimated at US$170-320 million per year, which is 10-20 per cent of the licit market.
    • Illicit wood products imported from Asia to the EU and China were worth some US$2.5 billion in 2009.
    • The number of counterfeit goods to Europe has gone up tenfold over the past decade, for a yearly value of more than US$8 billion.
    • The number of piracy attacks off the Horn of Africa is still rising. Of the more than US$100 million annual income generated by ransom, only a quarter goes to the pirates, the rest to other players in the organized crime market.
    • Identity theft produces at least $1 billion for criminals each year, with a far-reaching impact on the economy and online commerce.

    Mr Fedotov cautioned that law enforcement will not be able to deter the mafias if the white-collar criminals -- lawyers, accountants and bankers -- continue to launder their proceeds. It is important to go after dirty money, he said, by increasing the risks for criminals and lowering their incentives. He called for more robust implementation of the United Nations Convention against Corruption, more effective anti-money laundering measures and a crackdown on bank secrecy.

    At a session of the WEF on "Criminals without Borders," Mr. Fedotov said international cooperation was essential. Appealing for more development and technical assistance to reduce the vulnerability of poor nations, he said more vigorous and universal implementation of the United Nations Convention on Transnational Organized Crime and its Protocols was the best way to combat transnational crime. The Convention is a powerful tool that enables countries to work together more effectively to pursue and prosecute transnational criminals and provide support to their victims, he stressed.

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