Karas 1 Rachel Karas USFP Toward Illicit Networks Prof.

Miklaucic 10/6/12 Exploitation of Development and Underdevelopment Dynamics by Illicit Networks during 21st Century Globalization 2. The proliferation of transnational illicit networks is said to represent the dark side of globalization. What does this mean? Which dynamics of globalization might contribute to the proliferation of transnational illicit networks, and what mechanisms of globalization permit them to interact, coordinate and collaborate more effectively than in the past? When envisioning the future of global economy and security, one need not look at traditional structures of government, stock markets or militaries. The answers lie in the white dotted patterns of lights strewn across Earths black nighttime landscape. Without question, the juxtapositions of urban and rural, wealthy and poor, governed and anarchical, developed and emerging, archetypal and atypical can be found in the deceptively simple image of the world at night. These disparities often occur within the same one area, yet at the same time connect across cities, borders, continents and hemispheres. Showing global light and dark purely in terms of luminosity cannot reveal issues of ideology and political tension emotional, interpersonal creations of the human mind but surely the contrast exposes an unavoidable truth of the 21st century: globalization. Indeed, it is conceivable that the major global divide of the twenty-first century will be caused not by competing ideologies, the struggle for power or the clash of civilizations but by clashes between states that uphold law and order and those that are dominated by criminal interests and criminal authorities, Phil Williams writes in Lawlessness and Disorder: An Emerging Paradigm for the Twenty-First Century.1 Yet it is also entirely feasible, if not correct, that the rise of these competing ideologies, power struggles and the clash of civilizations are all direct byproducts of globalization itself, and that the clashes between lawful and criminal entities occur simultaneously in tandem with and independently of those wars of thought and ego. The proliferation of transnational illicit networks since the end of the Cold War brought to light an age-old phenomenon newly able to evolve and prosper at a rate previously unimagined. While Western scholars postured that those in the former Soviet Union would quickly embrace democracy and capitalism, gaining political and economic strength to match that of other developed countries, it was not the case. What was hoped to be a vast lightening of the global development map spreading more white pinpricks of modernity across a large colorless area only transitioned into deeper contrast between the areas of have and have-not. Newly-formed countries learned not only self-governance, but corruption as well. With the rise of urbanization, democratization and ungovernable spaces, a worldwide demand for goods requires more than what traditional government and business can provide. Consequently, four major categories of illicit trade exist: illicit trade of licit goods, sale of
1

Williams, Phil. Lawlessness and Disorder: An Emerging Paradigm for the Twenty-First Century. Publication. 2012. Print.

Karas 2 counterfeit goods, sale of contraband and money laundering. This trafficking of humans, money, drugs, excisable goods, wildlife, small arms, natural resources, counterfeits and more may total a global retail value of $650 billion, or $2 trillion including illicit financial flows.2 These activities can be called the dark side of globalization because they use interconnectivity and business prosperity to undermine the public good; influence economic and political outcomes through coercion; contest the states use of power and maintain strength through loyalty to the organization rather than to a state, serving their best interests and bottom line all which are caused by and threaten to destabilize globalization. Globalization, described as international integration via technology and cross-border value-added economic activity, has therefore enhanced the gap between figurative light and dark on multiple levels, from governance to development to morality. Surely, light and dark can be explained in pictorial terms, of physically seeing the electric lights of global population centers from space. This symbol of population inherently includes the underlying legality, enforcement and business aspects of both developed and developing countries. But light and dark are also definable as that which are or are not socially and normatively acceptable, and the intersection of physical and normative provides a foundation upon which to analyze the rise of transnational illicit networks. To understand illicit networks, it is necessary to first look at what constitutes a light area and a dark area, and the characteristics that allow these often deviant organizations to form and thrive. It is important to consider the theory that crime is always found where the people are. However, though this may have been true in decades prior to the 1990s, less crime is not found in areas with fewer people simply different forms of crime to satisfy different needs arising in the global economy. As Nils Gilman describes in Deviant Globalization, illicit networks use the technical infrastructure of globalization to exploit gaps and differences in regulation and law enforcement of markets for repugnant goods and services.3 Without globalization, illicit networks would be limited to internal, national organizations much more easily controlled by federal governments. It is this recognition of a worldwide playing field and audience that defines how networks now connect and flourish in todays economic structure, involving everything from narcotics and weapons to body parts and human beings in order to fill gaps on an international scale that cannot be satisfied within or by a nation itself. The lightest areas on the nighttime map signify the worlds most population-dense cities, urbanization and crowding themselves being phenomena of globalization. The worlds population has grown outward and upward, creating both suburbs and cities, as urban areas also become larger by inheriting those in search of better opportunities and a more developed social structure. It is in these urban centers that government tends to be the most established, but the same governance cannot effectively cover the entirety of the most populous places. This signifies a loss of sovereignty on a micro level, where the sheer volume of humanity makes total law

2 3

"Issues." Illicit Trade. Global Agenda Council, 2011. Web. 09 Oct. 2012. Gilman, Nils, Jesse Goldhammer, and Steve Weber. Deviant Globalization: Black Market Economy in the 21st Century. New York: Continuum, 2011. Print.

Karas 3 enforcement nearly impossible and therefore open to possibilities for illicit networks to operate in the void. Government establishment also presumes a level of regulation, most thoroughly enforced in developed countries and in these urban centers where authorities have most direct control. This regulation invites organizations to provide illicit real or counterfeit goods where licit means prevent or restrict distribution, failing to satisfy demand. Trade regulation is another hallmark of globalization, a mechanism through which one country can ensure it can create profit and jobs using its own goods and imposing financial barriers upon competitors. This, in turn, creates competition and prevents the global economy from stagnating, but also creates illicit avenues alongside the less flexible licit business practices. Conversely, free trade agreements create loopholes through which illicit business slips, taking advantage of lax regulation amongst fiscal allies. Regulation also enables one government to impose its moral viewpoints by illegalizing goods and practices deemed socially unacceptable repugnant, as Gilman says. This enables societies with different ethical standards to provide goods unavailable in other areas human organs, sex workers, any type of drug because of the moral lumpiness4 that accompanies newfound awareness of other places with different ethics and before globalization was exploited far less often. Similarly, light areas signify many people competing for the same limited resources, often controlled by government regulation through eligibility standards or simply underprovided because of insufficient quantities in supply. Whether it be health care, housing, security, food, or any other basic human need, organizations other than the official government step in to provide, and in turn gain loyalty or subservience from people through both dependence and coercion. This magnifies the gap in wealth already widening through globalizations redistribution of resources, as those who can pay for basic human needs do so and those who cannot become indebted to the illicit entities who provide for them. Those in charge of the resources profit from the control, and the cycle continues. Though corruption is not a direct product of globalization, it is influenced by the increased competition of worldwide politics and business. Establishing ties between official entities and illicit networks enables officials to gain more influence or more resources than they may have had originally and illicit networks are able to leverage the relationship into protection a symbiotic connection of profit and blackmail. In light and dark areas alike, this relationship is easily kept under the radar. Corruption, coercion and violence can flourish while staying silent in the white noise of a large population or in the shadows of few inhabitants. The ability to disappear in populous places also enables the activities of illicit networks. Sex trafficking thrives in cities, both for the ability to recruit or kidnap women and children off the street in public areas and for the ability to sell their services to a large number and wide variety of people in a short amount of time. Though weapons trading cannot stay as hidden, drug transactions can move in small or large amounts across hands and vehicles. Money laundering and counterfeiting easily hide in the shadows of the immense economic activity already

Gilman, Nils, Jesse Goldhammer, and Steve Weber. Deviant Globalization: Black Market Economy in the 21st Century. New York: Continuum, 2011. Print.

Karas 4 occurring in city banks and markets. In fluid areas, the personnel networking and trade possibilities are endless. One such light area can be found in the favelas, or slums, of Rio de Janeiro. Though the favelas themselves are poor, underdeveloped and lack technology, they are located in an urban area untouched by the Brazilian government. As a result, drug gangs have nearly complete control of favela society at the expense of its inhabitants, as Harvard researchers Barenboim and Campante describe: These gangs impose militarized control over the favelas, and engage in constant armed conflict over turf with rival gangs and against repression by the police which has very little presence in the favelas other than through occasional violent incursions [Favela-dwellers] often cannot go to areas controlled by rival factions, they might be coerced to give support to the local dealers, and even to take part in their activities They are also subject to arbitrary violence (public humiliation, expulsion, expropriation, beatings, murder, sexual abuse) committed by the drug gangs, and sometimes by the police In sum, crime exerts a great deal of influence over the daily lives of the favela-dwellers, whether they are directly involved in criminal activities or not.5 The favela drug gangs are pivotal in moving cocaine and other drugs throughout South America and the rest of the world, using violence to accomplish their business and recruit members. Though they are localized to this one part of the city, globalization and development have made it possible to work with buyers and sellers worldwide while evading government interference and terrorizing others in Rios sprawl. Dark locations, in contrast to the light, have many of the same characteristics while stemming from different causes. The worlds shadows tend to be less densely populated, less developed and less technologically advanced, grouping fewer people into villages and towns rather than the packed urban sprawl of cities and suburbs a perfect breeding ground for those who wish to remain undetected. These are the populations able to hide due to either living in ineffectively governed states, unable or unwilling to enforce law, or living far enough away from the seat of government in light areas that they are to a degree out of reach and ignored. Illicit trade networks can flourish in the absence of government without fear of repercussion, but are also likely to hold more sway or greater power than the formal government and therefore lessen the chance of consequence. Most dark areas operate under tribal or other forms of local, personal governance, many of which set their own moral standards that often do not conform to international norms. Terrorist entities are most often found in these areas, working on a local scale to offer services and protection to citizens who are likely underprovided for by the formal government, while conducting ideological coercive and violent operations both domestically and internationally. Illicit activity can likewise facilitate a more widespread distribution of water, food, money, shelter, electronic goods and more, bridging the gap between governments who often hoard resources and grow rich at the expense of starving and destitute populations. However, such
5

Barenboim, Igor, and Filipe Campante. Does Crime Breed Inequality? Evidence from the Favelas in Rio De Janeiro. Rep. Harvard University, Apr. 2008. Web. 9 Oct. 2012.

Karas 5 distribution is generally based on favoritism, boosting family members and close friends rather than entire populations. This simply perpetuates networking by creating close ties of not only blood and friendship, but survival as well, and leads to tribal and village loyalty toward an organization that may result in harboring and facilitating their work. Globalization has nevertheless had an impact on the rural areas equal to that of the urban. In addition to increased competition for scarce resources in sparsely populated areas, little to no government regulation exists in dark areas so that organizations and individuals work independently of an existing economic structure rather than alongside one. This allows free illicit trade of both licit goods and contraband across borders without government intervention, broadening markets to other countries sans policy barriers. However, governments are also highly likely to want to capitalize on the spreading economic activity, and may offer large incentives to those working in illicit trade while reaping benefits for themselves. Globalization spurs competition not only amongst businessmen, but among the politicians who feel they have nothing to lose by engaging in corruption to move up in the world order because there are few to hold them accountable domestically. The general barrenness and little technology of dark areas do well in facilitating a variety of trafficking schemes because it allows for under-the-radar movement of goods in large quantities, such as weapons, drugs and natural resources. This fluidity is ideal for moving products across continents, enabling globalization without triggering major alarms while storing and shipping illicit goods. Developing countries, particularly those in Africa, are also frequent recipients of the trafficked goods small arms that fuel civil wars, insurgency efforts, drugs to satisfy growing demand, etc. The removed nature of less developed countries is both caused by and changing through globalization: while other countries provide products that allow for regressive actions like war, pushing nations farther from development, the interconnectivity that allows for this exchange exemplifies the world growing smaller and becoming depending on others for both productive and destructive activity. One archetypal dark area is the African Sahel in An assessment of crime related risks in the Sahel, the NATO Defense College in Rome posits that the African continent offers numerous advantages for traffickers: poor border control; the predominance of diasporas in transnational trade; local police with no training in investigation; the spread of corruption to all levels of state institutions; total lack of national criminal records; inadequate, [and] outdated judicial systems that are susceptible to corruption.6 The Sahel hosts multiple hubs of drug trade and light weapons trade, terrorist organizations, and governments like that of Sierra Leone leading war economies fueled by blood diamonds, as one example. Chaos in this chain of weak states relies on not their own internal turmoil, but also outside entities to perpetuate conflicts by supplying manpower, weaponry, and customers for the natural resources that often provide funding for local and regional wars.

Ammour, Laurence. An Assessment of Crime Related Risks in the Sahel. Rep. no. 53. NATO Defense College, Nov. 2009. Web. 9 Oct. 2012.

Karas 6 Though these locations are described as light and dark for their respective levels of development, population and technology, illicit networks connect both to exploit the qualities of globalization and take advantage of the morally dark side of economics and power politics. These characteristics rapid evolution of technology, disintegration of state sovereignty, increased speed and ease of business transactions and communication, worldwide expansion of economic markets, global economic and political competition, interconnectivity of growing populations, cross-cultural awareness are the factors that connect light and dark areas across borders and continents. This, in turn, requires illicit networks to constantly adapt and innovate to operate effectively regardless of location. Because globalization is largely an economic concept, it is motivated by profit rather than ideas and allows organizations to develop fiscal ties that do not depend on cultural and ideological norms of an area. Without both light and dark, and without globalization, illicit networks would not be able to operate as efficiently as they have learned to do in the 21st century. Globalization and illicit networks are entirely dependent on technology, which allows communication and transactions to take place between groups in different parts of the world. The advent of the Internet, cell phone technology, etc., exponentially increased the speed of economic activity and individuals ability to find one another. This also allows for the spread of information amongst groups, enabling networks to evolve intellectually by learning from others mistakes and advice. Technology gives networks the ability to connect laterally rather than hierarchically by keeping in contact without face-to-face interaction, and allows business transactions to be kept largely anonymous through mobile cash transfers. Through emails, calls, text messages and more, buyers and sellers can find each other and do business without ever meeting in person. Black market goods are sold via the Web en masse each day as well, with few concrete ways of ensuring legitimacy and relative ease of shipping across borders using intermodal containers.7 Loss of sovereignty and weakening borders are also crucial aspects of globalization in connecting light and dark areas and facilitating illicit activity. As the world becomes smaller, borders have become more fragmented and fluid through technology, business, migration, and government interaction. This prompts greater government regulation through tariffs and border control, only further encouraging illicit trade by providing barriers to avoid. Loss of sovereignty prompts national insecurity from the inside and vice versa, allowing large volumes of badly monitored goods in and out of the country in a perhaps unintentional attempt to shred the economic and normative fabric of a functioning society. Human migration, another large aspect of globalization, is a consequence of weak borders and enables illicit networks by providing both workers and customers who are often desperate for money or resources in leaving their home. This also poses more resource issues for the receiving country, intensifying the demand in the area for services provided by illicit traders. In the example of the Sahel, internal wars spill over borders and mix populations and economies in unstable combinations. The influx of refugees and increased scope for illicit arms flow provide easy smuggling and trafficking opportunities, increase pressure on local economies to provide resources and open cross-border territory for long-term use by illicit networks. National
7

Williams, Phil. Lawlessness and Disorder: An Emerging Paradigm for the Twenty-First Century. Publication. 2012. Print.

Karas 7 and human securities are highly compromised by illicit abuse of borders and individual lives in the pursuit of increasing business opportunities, henceforth using aspects of globalization destructively to achieve economic ends instead of constructive licit means of trade.8 In utilizing these factors of globalization to undermine existing economic and political structures worldwide, illicit networks are embracing the dark side of business to turn a profit at the expense of global human security. To comprehensively battle all forms of deviant organizations, terrorism and crime alike, their interdependence must be understood and the demand must be addressed rather than the supply alone. Proactive rather than reactive policies of law enforcement and deregulation can help to remove incentives of illicit trade and urge global networks toward integration into the licit economy. Rather than dividing the light and dark areas of the globe and restricting cross-culturalism in an effort to curb globalizations underworld, governments must work together toward alleviating the initial social and economic stresses that cause such networks to form.

Ammour, Laurence. An Assessment of Crime Related Risks in the Sahel. Rep. no. 53. NATO Defense College, Nov. 2009. Web. 9 Oct. 2012.