Organized Crime in Foreign Policy
Summary and Keywords
Transnational organized crime is part and parcel of the modern, globalized economy. The black market has irrefutable influence over both economic and political structures. It corrodes, corrupts, and coopts the institutions with which it comes into contact. Features that arise as a side effect of organized criminal activity also impact economic, social, and political developments. Isolated approaches aimed at counteracting criminal networks have proved ineffective, necessitating a fresh perspective on foreign policy-based solutions.
A central difficulty of researching organized crime is the opaque nature of criminal networks, whose members prefer to operate in the shadows. The underworld does not owe accountability to any outsiders, nor do crime syndicates generally file tax returns. International bodies like the United Nations Office on Drugs and Crime are forced to rely on the reports of member states, which are often subject to distortion. This makes accurate assessment of the extent and impact of organized crime difficult, to say the least.
Part of what makes the black market difficult to combat is the malleable approach of criminal networks. They employ a variety of strategies to pursue their illicit activity and will quickly adapt to the given strength or weakness of their host state. These strategies manifest themselves as either evasion, confrontation, or infiltration of state institutions. All of these strategies undermine legitimate sociopolitical structures, making it imperative to implement effective foreign policy initiatives that fight the trade as a whole.
Transnational organized crime is a massive industry, possibly the world’s largest after the international arms industry. Yet the subject field is severely underresearched and lacks concrete analysis, especially pertaining to its impact on global foreign policy. In addition, contemporary research methods aimed at calculating the value of the shadow economy indicate that researchers have so far been unable to accurately assess its financial scope. The United Nations estimated in 2011 that transnational organized crime generated 3.6%of global GDP (2.3–5.5%), or around US$2.1 trillion in 2009 (UNODC, 2011). This figure is often cited today, 6 years after it was produced, even though some estimates put the total much higher. Indeed, much remains overlooked when states self-report on their own levels of organized crime. The Global Agenda Council on Illicit Trade and Organized Crime puts the trade value of transnational criminal activities between 8 and 15% of global GDP. Such figures are all the more astounding when contrasted with legitimate trade of $10–12 trillion (World Economic Forum, 2013). Generally, such statistics should be viewed with skepticism, for cited figures fluctuate over time and between organizations. The huge difference in values highlights the fact that transnational organized crime operates in an environment that is not subject to public scrutiny. Moreover, this industry has a far greater reach than can be accurately assessed within the current analytical paradigm, which all too often suffers from a political unwillingness to accept the full impact of organized crime.
The definition of organized crime has a major impact on how researchers understand and analyze data. The United Nations Office on Drugs and Crime (UNODC) does not use a precise definition of “transnational organized crime,” nor does it list the kinds of crimes that might constitute “organized activity.” This lack of definition was intended to allow for a broad applicability of the UN Convention against Transnational Organized Crime as new types of crime emerge and as global, regional, and local conditions change. There are, of course, varying degrees of fraud and illegality, ranging from unreported employment of a gardener to financial backing of terrorist activities, all of which can be understood as part the shadow economy but which differ in terms of severity. The UN Convention does, however, contain a loose definition of an “organized criminal group,”1 but again the parameters are left open to interpretation. For present purposes, transnational organized crime will be discussed in the context of large-scale operations where profits are substantial enough to impact global trade routes.
Transnational organized crime impacts international politics in numerous ways. Notably, the presence and growth of organized criminal activity affects both the formulation and implementation of foreign policy. Crime can constrain governments in ways that are both similar and dissimilar to other political actors. Organized crime as an enterprise benefits financially from subverting border regimes, profiting from increased transaction costs, and excluding states from the revenue stream. Foreign policy enters into the equation of the state’s attempts to either contain or combat the loss of resources, both tangible and intangible, to transnational organized crime, but it is also shaped by the operating capacity of these groups it should be noted that by necessity, any analysis of criminality relies on estimates and educated guesses.
Enter the State
The organizational and operating principles of criminal networks often bring them in contact with organs of the state. More often than not, the presence of transnational organized crime impacts the way state organs operate and interact with citizens, nonstate actors, and other states. By extension, foreign policy is hampered in its implementation or long-term effects, as resources are diverted from intended goals and as distorting data lead to a divergence of theory and reality. Especially when a criminal network begins to systematically employ violence, tacitly challenging the state by undermining the monopoly on violence, the authorities are compelled to take action. Similarly, if one or several criminal enterprises are able to establish themselves to such an extent that the administrative budget is significantly being drained, law-enforcement agencies and the judiciary may serve as a loss-prevention mechanism. In a globalized world characterized by high degrees of economic integration between states, the presence of powerful crime groups—especially when they take on a transnational character—can have a major impact on bilateral and multilateral relationships.
When a state’s institutions are weak, issues arising from organized criminal activity can take on international dimensions. This situation can often strain or disrupt international relations, especially when the policies of one country are viewed by another as impinging on its interests or even sovereignty. In the more financially integrated modern world, much of the interaction between states and organized crime in the international arena revolves around trafficking. Usually taken to refer to the smuggling of narcotics or the exploitive trade in human beings, significant criminal activity also centers on the unregistered transportation and trade in more mundane items such as cigarettes, alcohol, textiles, and other consumer products. However, because of their destructive nature, drugs and human trafficking impinge more heavily on the resources of the state, as the government is often left to deal with the fallout from crimes that enrich organized crime networks, and so public confidence in the system is lost. In some cases, the state system can be the force driving the trafficking, as has been the case with North Korea or Belarus (European Monitoring Center for Drugs and Drugs Addiction).
Perhaps the most famous and precedent-setting case of bilateral relations being dominated by a law enforcement perspective can be found in U.S.-Colombian relations in the 1980s and 1990s. This case coincided with the American government’s antinarcotics policy, the so-called War on Drugs, and the increasing rise of Colombia’s cocaine cartels to economic prominence. During this time period, the U.S. leadership’s need to demonstrate its ability to contain and combat criminal enterprise domestically defined the way Washington–Bogotá interact. Domestic pressure on successive U.S. administrations meant that, where once there had been several areas in which the two states had overlapping interests, now these commonalities had gradually been reduced to the point where law enforcement and diplomacy became inextricably linked. Differing opinions and strategies on how to pursue larger goals led to a situation in which “cooperation was often replaced by suspicion, bilateralism with unilateralism” (Crandell, 2008, p. 3). U.S.-Colombian relations soured during this time and would require considerable diplomatic effort and patience to rebuild.
The border-crossing supply lines inherent in the international drug trade necessitate counterstrategies that similarly cross boundaries and jurisdictional lines. Most states within the international community have an interest in collaborating with one another to prevent a proliferation of difficult-to-control or possibly confrontational organized crime. However, doctrinal or pragmatic differences may cause frictions, which can stymy collaboration efforts or derail mutual projects entirely. States may be unwilling or unable to take the steps necessary to curtail organized crime for a variety of reasons. Leaders in a country may refuse to take measures to curtail illegal activity out of self-interest, perhaps because they are unwilling to pay the political price to do so or because they themselves are beneficiaries of organized crime. Even if there is political will to combat crime, resources to do so maybe also simply be lacking.
It should also not be overlooked that transnational organized crime networks lend themselves to governments as a bargaining chip in international disputes. Precisely because the activities of trafficking and smuggling networks affect many entities differently, well-placed governments can leverage their jurisdictional capacity to gain an advantage in another area of negotiations. Governments that have good working relations, share strong mutual interests in law-enforcement practice, or otherwise have a long-established negotiation framework. A geographically visible feature of this framework is the states, which maintain extradition treaties with the United States: All the states of Latin America, as well as the United States’ geostrategic allies in western Europe and East Asia, have a legally enshrined law enforcement relationship with the United States. Historical rivals such as China and Russia, on the other hand, maintain no set of regulations for dealing with law enforcement cooperation; any such interaction must therefore be negotiated at a national level.
At the same time, it is not only citizens of states, but also organizations and states themselves, that are bound by the strictures of international law. Governments can either opt to ignore the risk of sanction and act illegally, as has been the case in the recent Russian annexation of Crimea (Dews, 2014), or dispute the nature of treaties on which legislation is based. In cases where states’ actors wish to obscure their role or mask their actions in order to avoid international sanctions, transnational organized crime may be instrumentalized to circumvent the legal framework. In many post-Soviet states, the financial interests of politicians and their supporters are often tied up in larger organized crime structures. As a result, the foreign policies of some states are being directed by considerations that may support favorable conditions for illicit enterprise.
So-called rogue states may also enter into symbiotic relationships with organized crime to escape the grip of sanctions or to secure alternative sources of income. The most prominent example at present is the Democratic People’s Republic of Korea (DPRK), whose government is believed to have infiltrated the drug trade to further the regime’s capacity for survival. Similarly, quasi-state actors who are not accorded official recognition, such as insurgent groups or unrecognized governments, may opt to take part in a shadow economy as an alternative to legitimate business when international politics denies this course of action. From a foreign policy perspective, supernational legislation can accordingly affect other aspects of multilateralism and diplomacy. In almost every country, some form of criminal activity impacts, to varying extents, the operations of the state.
Especially in regards to states with weak institutions or governance structures, such enterprise can reach major dimensions. In extremis, the line between a government as a sovereign entity and an organized criminal network with transnational aspirations can become so blurred that functionally the two become one and the same. Transnational organized crime as a phenomenon links domestic and international considerations, which has major implications for foreign policy initiatives. For most governments, criminal activity constitutes a drain on available resources by generating costs in the form of loss and prevention, as well as reducing the intangible standing of governments whose authority rests on the consent of the governed. At the same time, potential spoilers can use transnational organized crime to undercut the international community’s ability to respond to threats or maintain the status quo by countering sanctions. Similarly, the desire to protect “beneficial” criminal elements may induce some states to view the actions of potential partners with mistrust, thereby undermining the scope and effectiveness of multilateralism.
For these reasons, it is vital that policymakers take transnational organized crime into account as a potential third force in any effort at diplomatic collaboration, be it as an opponent, a hidden partner, or an alternative power holder. The key to formulating effective policy, as well as advancing academic research into the subject, is to establish a paradigmatic framework in which to model the interaction between organized criminal networks and the state. To do so, it is important to group some of the strategies and behaviors that frame the interaction between state networks and criminal networks, examining the structural principles that define them.
Organizing Principles and Structure
Transnational organized crime is an ever-changing industry that adapts to market demands through the creation of new forms of crime and utilization of their established networks. Organized criminal networks simply reflect the institutional landscape in which they operate, be it the state, global markets, or even the international bodies set up to tackle them. This makes organized crime difficult to control, to the extent that it even affects the formulation and implementation of foreign policy. The “winning formula” of organized criminal networks is their malleability and ability to manipulate the very principles of sovereignty and legality. Unlike the forces that work against them, organized criminal networks are not constrained by bureaucratic processes and can quite easily take alternative paths toward an end goal through force or corruption. Profit margins and control over their field of operation take precedence over humanitarian costs and unpredictable knock-on-effects. In many cases, organized criminal networks also occupy a space that is continually under threat in some way, whether externally from the state or internally. Often, though not always, then they prioritize immediate gains over long-term interests, which can form the basis of stability-promoting policies. In some ways, many organized criminal networks operate as if they were stateless autocracies, especially when they grow in an environment that favors a personalized leadership with no institutionalized method for collective decision making.
Like states, organized criminal networks are political and economic forces that can mobilize people and resources to advance strategic aims and shape the environments in which they operate. This is done without consideration to collateral damage or regard for international implications. They can challenge the state’s monopoly on the use of coercive force, and they have vested interests not only in the domestic environment that surrounds them, but also the policies of the states that are tangential to their financial structures. When analyzing the mechanisms behind organized criminal networks, there is often a blending of strategies. That being said, identifiable tactical spheres can be observed in their operations. Three very general strategic approaches define the behavior of organized crime, as well as their impact on foreign policy:
1. Evasion, in which an organized criminal network will seek to keep its illegal activities hidden from state scrutiny; from a foreign policy perspective, this means that governments must adjust formulation and implementation of policy to take into account the presence of economic and political forces, which are not immediately obvious, and may lead to the loss of resources.
2. Confrontation, which involves challenging a government’s authority by undermining its laws and the monopoly on violence. Organized crime networks that rise in prominence and scope to the point of being able to openly challenge a state may become quasi-governments or administrative alternatives rooted in shadow economies. The presence of such networks can derail the efforts of policymakers.
3. Infiltration, which is the process of organized crime networks entering into the mechanisms of power and effectively merging with government institutions. An extreme form of this approach is an organized crime network taking over from the state as the dominant political and social force (so-called cooption). When the lines between transnational organized crime and government becomes so blurred that the two are practically merged, there are serious implications for the policies of both the afflicted state and other foreign policymaking entities.
Each of these strategies typifies patterns of behavior that are found within the criminal system. As the case studies indicate, some organized criminal networks may employ a combination of all three approaches to help them achieve their aims. While it is useful to apply this model for mapping out organized crime and its impact on foreign policy, like most paradigms that rely on delineation, there is a distortion of reality. Transnational organized crime operates in a world characterized by shades of gray in which clear-cut distinctions are hard to come by.
While the boundaries between these strategies are fluid, all three have implications for the way states make and practice foreign policy. This is because strong organized criminal networks are inextricably linked with global trade, not least benefiting from the increased profit when crossing borders and decreased ability of law enforcement to act. Transnational organized crime is not a bounded entity; rather, it can be conceptualized as a series of links in a larger chain or trade route. If not effectively managed, it can become the most lucrative industry for a wide variety of actors. It can best be described as multifaceted, diverse, and lacking in standardized principles.
Income for transnational organized crime comes predominantly from the production, transportation, and selling of illicit drugs, accounting for almost half of all proceeds (UNODC, 2011). Should profits in another industry be higher, organized criminal networks are quick to refocus their resources, energy, and transit routes. A cost-benefit analysis is always involved in the process, and as in all industries, there is a logical risk assessment. An example can be seen in many European states where cigarette and alcohol smuggling is widespread, despite the fact that these are legal commodities (Wenngren et al., 2016). The people who make up the organized crime networks are for the most part rational actors; while they do not obey the laws of any country, they will conform to the laws of the international market.
Organized crime behaves in parallel to the state and the international community. Labels of “legality” or “illegality” placed on certain commodities determine the areas in which organized crime will take hold. New rules and norms set forth by the international community, such as sanctions or migration bans, result in new avenues being opened up by organized criminal networks. This in effect constitutes the creation of business by norm setting, a phenomenon that occurs in times of social upheaval, civil crisis, or war. During the war in the former Yugoslavia, for instance, the presence of various international embargos created a desperate need for supplies. Unofficial channels quickly came to meet the resulting demand and this expanded the scope of the criminal networks. Efforts to control and then sanction Serbia (the then Republic of Yugoslavia) resulted in that substantial international support was supplied to rebel movements like the Kosovo Liberation Army (KLA/UÇK). However, such movements had by this point in the conflict so evolved that reliance for the supply of arms and supplies was now placed on ties with the criminal underworld. After the war, this connection persisted, with many elements of the former rebel group embedded in the criminal network. Some commentators have even gone so far as to call the Dayton Agreement the “Pax Mafiosa” and to describe NATO’s support for the KLA as amounting to sponsorship of organized crime (Knudsen, 2014).
The structure and function of organized criminal networksallow them to employ several different strategies at once. Tactics of evasion, confrontation and infiltration, can be combined freely and are by no means mutually exclusive. Violence can, for example, be used to avoid sanctions by threatening witnesses, eliminating law enforcement agents, and coercing politicians. Each of these uses of force can play a role in different approaches to criminal enterprise. If an organized criminal network can employ force in these ways, there is no reason why they would not use all three of these measures at once. Decentralized and transnational groups can also experiment with different operative approaches to similar problems, developing a kind of trial-and-error approach and learning from experience how best to balance relationships with the state. In this way, they retain the primary directive of maximizing potential profits, while at the same time negotiating new avenues of income. Mexican cartels for example, have employed violence in different ways, ranging from kidnappings to elimination campaigns against state officials on all sides of the border of operation.
By contrast, states are accountable to the public and have to take a structured approach to policy formulation and are, to a greater extent, tied to national borders and legislation. This involves acquiring funding and support, which is usually tied to the fiscal year. By the time a government has been able to react to a set of problems, the underworld will have moved on to something or somewhere else. The drive by many foreign ministries to develop and maintain crisis committees to respond to dynamic problem fields, such as hostage situations or hijackings, speaks to the gradual recognition of having rapid reaction mechanisms in dealing with criminality. Nevertheless, organized criminal networks are characterized by higher degrees of flexibility than their state-bound opponents. The reality is that their decision-making systems are not subject to unilineal evolution. Much like legitimate CEOs, decision makers in criminal enterprises will shy away from bad investments and seek to cut losses in a rational manner.
Transnational organized crime is subject to myriad external forces (such as changes in global prices, elections, consumer preferences, technological innovation, and shifts in foreign policy priorities). With so many moving parts, it is essential for organized crime to develop a multivectored and nuanced approach to maintain its position. The more external factors exist, the more an organized criminal network needs to accommodate for changes in the environment. Not having an affiliation with an individual company or patent means that a weakening of one link leads to a shift in business. This is both an advantage and a disadvantage. Depending on the position of a country along the supply chain, it can be described as a transit country, as is the case with Guinea-Bissau, an origin country such as Colombia, or a consuming country such as Sweden or China. Should a section of the supply chain become unable to compete within the larger trade structure, it is likely be excluded, and the chain of producers, transit, money launderers, and consumers are well structured and politically potent in weak and strong states alike.
This highlights another aspect of the relationship between organized crime and the state. Neither of these two entities operates in a vacuum; both are tied to a vast array of “civilians” who are neither civil servants nor criminals. Collectively, this amalgamation of people can be thought of as the audience for both criminal and law enforcement efforts. This can be the community within which organized crime network members live, with the electorate awarding a government its mandate and consumers of goods appearing on the black market. Neither the state nor an organized criminal network can act without taking this third actor into account, and any strategy engaged in will redound to the wider public.
The interrelation of these distinct parties can be envisioned as a triangle. The sides of this triangle highlight different relationships: Interaction between the state and the public is based on representation, deliverable of public goods and support; between organized crime and the public on exploitation; and between the state and organized crime on policy and opposition. When organized criminal activity transcends national boundaries, as is the case with transnational organized crime, the relationship between states and organized crime becomes an issue of foreign policy. As with any point of interaction in this triangular model, any relationship has ramifications for the others. For example, in the late 1980s, the increasing power of Colombian cocaine cartels led to public pressure on the U.S. government. The George H. W. Bush Administration came under increasing strain from a number of American lobbying organizations to stem the flow of drugs. This pressure led to heavy involvement of the U.S. Drug Enforcement Agency (DEA) in South America (Sontag, 2016).
Relationships between these various actors can manifest themselves in different ways, further adding to what is already a complex situation. Sometimes the state and organized crime will compete with one another for legitimacy deriving from the public. This has been notable in Tajikistan and Kyrgyzstan where transnational organized crime has supplied public goods when the respective government fails to provide basic public goods such as health care and education (Swanstrom, 2007a). This situation gives rise to phenomena like the “Robin Hood Myth,” which involves criminals “stealing from the rich and giving to the poor.” Popular support for organized crime can lead a criminal enterprise to graft its own agenda onto larger political fault lines.
Narratives of social justice are especially prevalent when a government is not viewed as the guarantor of prosperity and security, but rather as an alien or oppressive force. States that adopt an extractive rather than administrative or supportive stance toward the population are less likely to garner the support of the local power bases that form the constituent basis of regional governance. In such a situation, alternative power structures may be presented with an opportunity to fill the void. States can also seek to boost their own standing by casting organized criminal networks as public enemies to be combated for the common good, justifying repressive measures or attempting to win support. Both governments and organized criminal networks are (by and large) composed of rational actors who will most likely act in their own interests, with the audience employed as a resource on both sides of the legal divide. However, public approval is fickle and easily manipulated. For example, the government of Philippine President Rodrigo Duterte has harnessed public support for an unprecedented crackdown on crime within the country, but at the cost of international standing (Brunnstrom, 2016). The need to promote a narrative to govern or to undercut the budding authority of opponents permeates the policy decisions and actors of leaders in both states and organized criminal networks.
In the 1990s, the chaos that followed the collapse of the Socialist Federal Republic of Yugoslavia contributed to the expansion of organized crime in Europe. The KLA came to rely on drug and weapon smuggling to sustain its efforts to oppose the Serbian state, exploiting ethnic tensions between Albanians and Serbs. In at least one well-documented case, this led to the killing of Serbian prisoners of war for black market organ sales (Schmidle, 2013). Nevertheless, because of the atrocities committed by the Serbian Army, public opinion and an alignment with NATO members allowed the KLA to continue their military operations. At the same time, Albanian/Kosovar organized criminal networks could leech onto the trade route from the Balkans to Oslo. The relationship between politics and crime led to what has been referred to as a hybridization of criminal and political aims (Michaletos, 2007).
Just as the actions of a state impact its standing with the public and other governments, organized crime does not operate in a vacuum. The criminal underworld usually consists of several competing elements. Organized criminal networks have to compete with one another, forming and breaking alliances in a struggle to control resources and people. Romantic notions of a brotherhood of thieves cannot stand up to the cold, hard realities of economic practice. Without a depersonalized control framework in the form of legislation, organized criminal networks ensure social control by manipulating the social environment in which they operate. Most commonly, though not always, this takes the form of violence against opponents or noncooperative elements. It can ultimately lead to a spillover of violence as criminal networks struggle with one another over market and political control. This is very much the case in Naples, where the Camorra mafia has a much more horizontal structure than a strict hierarchy. The various Camorra clans work independently of each other and are prone to feuding among themselves, and profits supersede any allegiance to family ties. Access to profit was a driving force of the so-called Secondigliano War, memorably described in Roberto Saviano’s Gomorrah (2006).
This is a very important aspect for foreign policymakers to consider. In reality, organized criminal networks rarely feature this top-down structure held together by power and respect. They do not follow the conventions of the often-romanticized Sicilian mafia, dramatized in films and series. The individuals within the networks are interested in financial gains and are notoriously ambivalent when it comes to notions of allegiance. This has both positive and negative consequences for foreign policymakers. On the one hand, criminal networks can be fractured and splintered off into smaller working groups when profit margins are refocused or sanctioned. On the other hand, when pushing down on one criminal network controlling a certain region or product, then just as quickly another network will sprout up, elsewhere taking advantage of the power vacuum. This is what is known as the push down–push up effect. If one network is suppressed, another will take its place because the demand still exists and there is therefore a profit to be made. After U.S. pressure on the Colombian government led to the killing of Pablo Escobar and the collapse of the Medellin Cartel, the resulting gap in the marketplace was quickly filled by the rival Cali Cartel (U.S. Department of Justice, 1994). In terms of foreign policy, changes in legislation and the presence of international sanctions can lead to the creation of new markets or practices. For example, the reduction of heroin production in Myanmar in favor of other products, pushed up heroin production in Afghanistan.
Tactics of Organized Crime Networks
At their heart, organized criminal networks are driven by profit even if political activists or terrorists utilize them. As such, they tend to function like businesses, attempting to maximize profits and minimize losses. The major difference between legitimate and illegitimate business is the relationship with the law, and even here the boundaries are undefined. Ultimately, the activities of organized criminal networks are governed by the laws of the marketplace, even as they flaunt the laws of the state or society in which they operate. A profit-driven character ensures that these networks employ the most cost-effective means to secure their sources of income, influencing the behavior of both criminals and the governments who are forced to interact with them.
Evasion is the most common tactic employed by organized criminal networks based in the developed world and can take on many different forms. Operating on the principle that a state cannot punish what it is not aware of, or prosecute what it cannot prove to be happening, criminal groups seek to mask their illicit sources of income. In some cases, this leads to a blending of legitimate and “illegitimate” businesses and spans the whole spectrum of illegal activities. Hiding assets and shielding those who profit from them have firmly entrenched money laundering in criminal networks (Williams, 2001).
This is precisely the case of the “hawala” system—a form of money originating in the Middle East, which is governed by a code of honor among people who share ethnic ties and is based on common values (The Economist, 2015). A system of informal banking, the money transfer happens without mediation or transactions via banks, rendering it untraceable. Illicit money in fact disappears through legal businesses and makes use of modern technology to ensure its functioning. The advent of online banking and the ease with which financial assets can be transferred between currencies and countries rapidly has opened up new opportunities2 (Getreu, 2015). Apart from making it nearly impossible to recover illicitly embezzled finances, money laundering lends itself to terrorist financing and the circumvention of sanctions. As recently as 2014, BNP Paribas was ordered to pay a fine of USD8.9 billion for falsifying documents and violating U.S. trade sanctions on Cuba, Iran, and Sudan (Raymond, 2015). The transnational structure of organized crime uses the limitations of cooperation over sovereign borders between state entities, but also between organizational structures, and the legal differences that exists between states and state institutions. In many ways, the transnational structure protects organized crime and decreases the risks.
Arguably the easiest and cheapest form of evasion is avoidance. By operating outside of the purview of law enforcement, criminal networks can focus on profit margins and not worry about externalities arising from interaction with the state, such as costly legal bills, the loss of human capital to incarceration, or a disruption of the supply chain. Especially when the infringements are based on low-level crimes, such as petty theft, the most cost-effective response to prohibition is to minimalize the potential for evidence gathering. On the ground, this manifests itself in a division of labor, with higher-ranking members of a network distancing themselves from the supply end of their trade.
Often the cost of policing these kinds of infringements is far greater than the actual damage done, so the authorities are happy to turn a blind eye, especially in situations where law enforcement resources are needed elsewhere or when government officials or institutions are benefiting from the trade. In some places, notably the Netherlands, law enforcement will tolerate some forms of narcotics, legalizing the sale and consumption but not the production of cannabis. An astounding amount of ingenuity will be invested in finding and expanding potential avenues for illegal trafficking and distribution. Organized crime has been successful in incorporating new technologies in order to streamline operations, both from a profit-maximization and a detection-minimization standpoint. This effort can take on large dimensions, depending on the potential profits, and accounts for the existence of “narco-tunnels” connecting San Diego and Tijuana. This literally undermines the U.S. border authority, or the use of “narco-submarines” (The Guardian, 2016), but in most cases it provides much more low-technology and low-cost solutions.
Once the volume of trade begins to exceed a certain point or to threaten the legitimacy of the government, the balance of the hide-and-seek calculation can be upset. As a criminal enterprise grows, so does the scrutiny of its activities. In settings where criminal enterprise flourishes as an attractive alternative to economic stagnation, an elevated degree of wealth is conspicuous. Similarly, some kinds of offensives are more prone to draw attention, especially those that challenge the state’s monopoly on violence. Organized criminal networks will commonly develop internal codes of conduct to better control their members and thereby better navigate the criminal landscape in which they operate and counteract increased surveillance.3 Such organizing principles are fundamental to the process by which an organized criminal network’s behavior is adapted and transformed over time.
Monetary incentives are also applied to create an effective smokescreen that obscures illegal activity, obviating the need for elaborate masquerades. Organized criminal networks can make use of their illicit profits to bribe members of the community and law enforcement into ignoring, or even participating in, crime. In extreme cases, this kind of corruption can lead to a vicious cycle in which law enforcement and criminals engage in symbiosis: organized criminal networks rely on the connivance of law enforcement and encourage the police to engage in rent-seeking behavior. This explains the desirability of posting to the Tajik-Afghan border service by members of the Russian military; the gains to be made from participating in heroin shipping vastly exceeded the meagre pay available to civil servants. If left unchecked by the state, this kind of development can lead to infiltration of state mechanisms by organized crime. In countries like Pakistan or Kosovo, a fractious political landscape with high degrees of corruption has led to the association of political parties with criminal groups (ICG, 2017).
Organized criminals are completely aware of the laws they are violating and the risks to which their illicit businesses are exposed, to the extent that they actively manipulate domestic and international legislation. In an effort to preempt potential sanctions that can be levied against it, an organized criminal network will constantly be probing for possible legal loopholes. If at all possible, an illicit enterprise will seek to exploit ambiguity in the legal system, both national and international, which can force a costly and complicated rethinking of legislation. For states to change their laws, significant political will is required, and this can sometimes strain international relations. This is the case when the activities of an organized criminal network based in one country is considered to have a disproportionate impact on the interests of another state.
International relations, which exist at the intersection of many different legal regimes, is prone to gray areas that can be exploited by transnational criminal groups wishing to avoid sanction by the authorities. In its simplest form, this can mean simply moving from one country where an offense is committed to another where different laws preclude punishment. Similarly, mobility in goods or financial assets can be used to obfuscate sanction, with tax evasion as a major example. Organized criminal networks are adept at utilizing international mobility to advance their own financial interests, enriching themselves on resources that are denied the state. Foreign policy can be used to combat these problems, through either cooperation in supernational law enforcement bodies such as InterPol or bilateral extradition agreements. However, the price of searching out and disrupting evasive elements may preclude effective policing, especially if the cost outweighs the benefit or affect cooperating states differently.
Strategies of confrontation have their own strengths and weaknesses, as well as implications for foreign policy. Once an organized criminal network has demonstrated its ability and willingness to employ deadly force, it can take advantage of fear and uncertainty as coercive mechanisms to advance its own aims. The potential threat of violence can be just as compelling as violence itself and gives an organized criminal network an incredible amount of leverage. If left unchecked, these networks can become a potent political force, capable of derailing or removing foreign policy initiatives. This may undermine a state’s monopoly on violence and, in the case of weak states, may allow a direct challenge to the authority of the government.
Organized criminal networks can profit by expanding their market share, as well as by controlling as much of a given market as possible. They seek to branch out and develop new avenues of income. Creating vested interests in organizations that reside outside codified legal frameworks, they can develop the capacity to challenge state authority, especially when states and economies are weak or bilateral relations are poor. Large-scale organized criminal networks can threaten the position of both their host states, meaning the state nominally governing the area where a particular organized criminal network operates, and nonhost states used for transit or as export destinations. For example, various cartel organizations that are based in different regions of Mexico, their home state, control illicit trade routes into the United States, a “foreign” country. According to data from the DEA (2015), various cartel organizations have staked territorial claims in different U.S. cities, which also is their primary market.
Direct opposition becomes an attractive option for organized criminal networks that wish to expand their operations by controlling the infrastructure and environments surrounding the black market. For example, some commentators have suggested that the riots between Uzbeks and Kyrgyz in Southern Kyrgyzstan in 2010 were motivated by control of the lucrative heroin smuggling routes rather than ethnic animosities (Trilling, 2010) but also by alleged terrorist organizations that seem to be interested primarily in controlling their economic stakes in the drug trade such as the Islamic Movement of Uzbekistan (Swanstrom, 2007b). In practice, this entails not only disregarding the sovereignty of the state, but exercising de facto sovereign rule on their own. This is a potential source of conflict when the government refuses to relinquish control of an area or practice. In the developing world, many postcolonial states are dependent on the extraction of natural resources and will bitterly combat attempts by nonstate actors to exploit them, especially if they are not cut in. Myanmar’s efforts to curb illegal logging is a prime example of this situation (Environmental Investigation Agency, 2016).
Insurgent movements and organized crime, which aspire to confront the state, will in many cases begin to blend with one another. This blending typically occurs when an armed separatist movement takes control of a region. Without the legitimacy of international recognition and with their focus on military goals, separatist militias often either begin to act in a manner indistinguishable from organized criminal networks or grant criminals carte blanche in their actions. Examples are the militarized criminal networks in the resource-rich east of the Democratic Republic of the Congo, where the UN Security Council has found the Democratic Forces for the Liberation of Rwanda (FDLR) guilty of trafficking gold, wildlife, and other natural resources (UN, 2016).
An organized criminal network that has established a degree of sovereignty in a territory can utilize its regional power to levy taxes and in other ways control the supply chain. This includes extortion of companies, both domestic and international, in sectors that are of strategic importance such as energy suppliers and extractive industries. While organized criminal networks rarely acquire enough power to stand on an equal footing with the states they are interacting with, they can leverage their issue-specific power to get state authorities to sit down with them at the negotiating table. At this stage, these networks are in a position to expect concessions from the state, instead of simply avoiding sanction or spending resources on evading the state. Foreign economic interests can draw nonhost states into these disputes. Foreign states confront many of the same hurdles as the organized criminal networks’ host states. They may face military challenges or other confrontations emanating from criminal groups, and their business interests may be undermined by the lawlessness of the organized criminal networks. Lawlessness can, however, be exploited to gain leverage in bilateral negotiations by both states and these networks.
Transnational organized crime can also complicate things for foreign states by functioning as a tool for “embargo-busting,” often encouraged by the host government. The Milosevic regime, for instance, actively sponsored the growth of state-organized crime in order to circumvent the international trade embargo against Yugoslavia. By installing trusted people in positions of power in the customs services and at border crossings, the state intentionally facilitated clandestine commercial activities. Thus, the cooperation of organized criminal networks served to undermine the international community’s efforts to stop Milosevic’s support of Serbian rebel groups in Bosnia (Andreas, 2005). North Korea has been very successful in employing criminal networks in breaking the international embargo and has today created an effective integration of organized criminal networks and the state security. Dynamics of this kind are all too common and frequently diminish the efficiency of sanctions imposition and any leverage this would impart. Third parties can bypass national regulation by approaching organized criminal networks or establish themselves as the hub in such a network not bound by the strictures of international bodies and national politics.
In other ways, the growth of organized criminal networks can (un)intentionally undermine states’ foreign policy objectives and thus indirectly challenge state authority. The social instability that is often associated with organized criminal activity has ripple effects that spread beyond borders. By their nature, organized criminal networks conduct illicit trade, the effects of which, when it crosses national borders, become international issues. When country A suffers from narcotics (or other unwanted goods or services) originating from country B, the two countries’ relations will suffer. This obscures other issues that are deemed less pressing. The relationship between Afghanistan and Iran was for many years dominated by the flow of narcotics permeating the border between the two states. The same can be said for the relationship between the United States and Mexico, where the border has become the most important bilateral issue. Transit of drugs, money laundering, refugees originating from instability, and the like can all be aspects of such an unwanted attention and more often than not impact foreign policy and bilateral relations.
Developing nations with weak rule of law are highly susceptible to influence from organized criminal networks. When given the opportunity, criminal organizations will penetrate various institutions of the state with the objective of influencing or even controlling them. This action of course undermines the authority and legitimacy of the state and leads to a disjointed relationship between society and authority. In extreme cases, a state can be so severely infiltrated by trafficking that it can become a so-called narco-state. Countries like Tajikistan, Colombia, Afghanistan, and Guinea-Bissau have all had the dubious honor of being strongly identified with the large amount of influence wielded by members of organized crime. The degree to which the administrative organs of a state, or other governing body, are vulnerable to criminal networks is dependent on a large number of variables. While this phenomenon is often considered on a case-by-case basis, the implications for wider policy would constitute an interesting study onto itself.
In different contexts, different institutions and organs of the state can be affected by transnational organized crime in myriad ways. For example, one region, or province, can be heavily affected by organized crime, while other parts of the country are not. When local authority structures find themselves at odds with a superimposed national government, they may make recourse to criminality to fund their opposition, or even go so far as to harness economic interests rooted in the shadow economy to challenge unfavorable laws by supplanting the lawmaking body. This phenomenon can have a major impact on the foreign policy options of a state contending with widespread crime domestically, or a state impacted by the inability of a partner state to deal with transnational organized crime.
Organized criminal networks utilize corruption to infiltrate the state, taking hold of state leadership, while ensuring that the basic state apparatus stays intact. In essence, the government is kept on life support, with just enough investment to keep the engine of profit going. Douglas Farah, an expert on transnational organized crime, suggests that a “criminalized state” means that the leaders of the state are themselves part of organized crime and invest state assets in criminal enterprises (Farah, 2010). An example of a state becoming linked with organized crime is Kosovo, where traffickers bringing people, narcotics, and weapons into Europe have taken root. The country’s close collaboration with NATO partners allowed criminal enterprise to take advantage of international resources that were invested in the country, undermining international efforts to establish the country as an ally in the critical Balkan region. There have been allegations that transit trade and money laundering in Central Asia have reached more than 50% of the total economy in Tajikistan and Kyrgyzstan, a rise that has made it very difficult to create any change (Swanstrom, 2007a).
Criminal infiltration manifests itself in a statetropic manner (Bobea, 2014), involving a criminal organization coercing senior officials toward its objectives of illegal operations while keeping the legislative structure intact. They will offer financial incentives to public officials in order to gain allegiance and protection. Statetropic criminality is a far more stable proposition than attempting to supplant a government, as it is based on a mutually beneficial scenario for both high-level and low-level civil servants benefiting from criminal activity. The state is therefore in a position to enforce the law and simultaneously serve the interests of criminal enterprise. In this way, the state loses its validity as a body for the citizens and in effect becomes a legitimizing authority for the organized criminal networks (Bobea, 2013). This can have devastating effects on a country’s economic development and international standing. Suspected involvement with various criminal activities is one of the reasons the DPRK has become a pariah state.
Strong ties between organized criminal networks, government institutions, and high-level business figures are a significant threat to economic growth and democracy. In states with weak governance, corrupt officials will often turn a blind eye to organized crime or in some cases fervently embrace it as a lucrative form of business. Organized criminal networks can enter into the political process in a number of ways. Entry can often be achieved through direct bribery of government ministers, having their own “ministers” run for office, infiltrating financial and security forces through coercion or corruption, engaging international organizations, or simply waiting until the shadow economy is too large to not be considered a political force. Typically, these organized criminal networks become an alternate sociopolitical force. They become alternate providers of governance, services, public goods, and security. As they grow, they threaten stability and undermine the free markets. Judicial processes become a cloak for illicit activity, the press is subjugated by fear of retaliation, and transparency becomes a thing of the past.
When government institutions become influenced by criminal groups to this extent, then the state has been “coopted” by organized crime. In the process of infiltration, illegal networks destroy the social contract between the government and its citizenry. Corruption becomes the linking factor between power and economic revenue, stymying growth. A culture of illegality and violence will become the norm, which in turn will further entrench poverty and inequality in the long run. In some cases, governments that have been subjected to recession, conflict, or isolation may themselves begin to act like organized criminals. Allegations of Syria’s Assad regime relying on what were once criminal syndicates as enforcers in the ongoing civil war bear witness to this development (BBC, 2012). It is important to remember that state governments are not always the victim of organized crime but can be criminal instigators themselves.
International attempts to redress organized crime through suppression often do not have the desired effect, especially when they fail to take into account the realities of the way criminal violence can be woven into a society. Poor or disfranchised populations living in marginalized neighborhoods tend toward the criminal economy, whether voluntarily or by necessity. Simplistic measures such as setting up blanket embargos obscure any meaningful understanding of a complicated phenomenon. Any attempt to implement policy solutions to hydra-headed organized crime necessitates a nuanced understanding of the systemic causes of criminality.
Despite potentially causing violence and insecurity, organized criminal networks provide opportunities and resources, such as employment, and protection to those who live in the most affected neighborhoods. Especially in less developed states, elected representatives cannot or will not focus on resolving the plethora of socioeconomic problems that exist in poorer communities in the short term. That being said, research by the UNODC indicates that the socioeconomic costs related to drug abuse are twice as high as the illicit income generated by drug trafficking (UNODC, 2011). Criminality leaves a deep scar on the regions it affects, perpetuating and promoting itself as criminals leech of society.
Legally combating organized crime requires jurisdictional and operative cooperation between authorities from the various nations. Ensuring conviction necessitates intelligence sharing, extradition, and cross-border police collaboration. It also requires assurance in the capability of domestic institutions of judicial independence, guaranteeing both international norms and independence from meddling by organized criminal networks. Furthermore, nations jealously guard their judicial and policing authorities and are often quick to distance themselves from other states or international unions once they start “infringing” on matters of sovereign concern. In addition, it is uncommon for states to release domestic intelligence to other nations, even shying away from sharing with established international bodies such as Europol.
In a number of major world powers, the state itself is linked, either directly or indirectly, to transnational organized crime. The governments of Russia and other Eurasian countries are known to benefit from ties to transnational organized crime as well as from cybercrime; the Chinese economy earns substantially from counterfeit consumer goods sold internationally; and many Latin American and West African politicians are either coerced by narco-trafficking groups or maintain close ties with them (Council on Foreign Relations, 2013). This exacerbates the difficulties in collaborating to dismantle transnational organized crime networks on an international scale, given that certain states are bedfellows with organized criminal networks.
Finding demonstrable evidence of such corruption is extremely difficult, however. It could be simply a handful of government ministers at fault, or it could be a well-developed system within the government itself. It is also important to note that there are different degrees to which state actors can be involved in transnational organized crime. An inability to act against criminal activity is fundamentally different from being a member or a net profiteer of an organized criminal network. Herein lies the Catch 22: accusing a UN state of corruption is a serious allegation and will likely be counterproductive. The state could respond by cutting off bilateral agreements and claim that the allegations amount to international interference in national policy, as Russia did in the Magnitsky case, where a Russian lawyer was arrested and died in custody triggering allegations of fraud, corruption and human rights violations (The Economist, 2010). This could then lead to further isolationism by the state and benefit the criminal networks operating in that country. Clearly, there is no easy solution to this problem. However, what must be understood is that organized crime and corruption enjoy a mutually beneficial relationship. For this reason, any efforts to combat either phenomenon must take into account their symbiotic relationship.
Case Studies of Organized Crime and Impact on Foreign Policy
The following three cases dealing with how organized criminal networks can have foreign policy implications are very different from each other, but all three are extreme cases and can only be seen as examples of what the impact could look like. Very few other cases have such an overwhelming criminal impact.
Myanmar—Gems, Insurgents, and States
Dominant source of illicit trade: Jade
Position in the shadow market: Origin state
Main strategy of organized criminal networks: Evasion
Throughout its modern history, Myanmar has struggled to contain and defeat separatist groups that have established themselves in minority-dominated border regions. Two of the hardest hit regions are Shan and Kachin States, both of which lie on the border with China. Separatist groups and their involvement in organized criminal networks have severely affected the economy of these regions. Clearly, both economic instability and stagnation can be attributed directly to crime and long-term separatist agendas. As in other areas plagued by insurgencies, the resource-rich jungles along the Myanmar-Chinese frontier have become a haven for organized criminal networks. The lawlessness of these border regions, combined with the abundance of natural resources, has given rise to smuggling operated by groups that challenge the state.
One of the most prominent of these groups is the Kachin Independence Army (KIA), which officially claims to represent the interests of the Kachin minority group in northern Myanmar. The KIA exercises de facto sovereignty over a large portion of Kachin State and functions as a quasi-government, levying its own taxes and challenging the government’s monopoly on violence. The group has also become heavily dependent on selling black market jade. It extracts this mineral from Kachin State and then sells it almost exclusively in neighboring China (Global Witness, 2015).
Like many of the separatist movements that operate along Myanmar’s border, the KIA draws on co-ethnics within China or local officials in the border area to support their illicit activities. This relationship helps to facilitate the transnational flow of narcotics and illegally extracted natural resources across what is already an exceedingly porous border. It is easy for members of the KIA and their allies to travel along illicit routes. This allows them to evade the jurisdictional authority of law enforcement in China, even if some of the trade is not illegal in China as it is taxed at the border, albeit not by the Myanmar government. The collapse of the price for contract killing, prostitution, or drugs in Chinese regions bordering Myanmar is symptomatic of the difficulties in maintaining law and order when confronted with an area peripheral to the kind of ungovernable space favored by transnational organized crime.
At the same time, it has been alleged that Chinese government institutions have sought to utilize their own relationship with insurgent groups in Myanmar to pursue their own political objectives (Sun, 2013). Furthermore, Chinese businesses interests, including state-owned enterprises (SOEs), can bypass already weak national regulations by trading with rebel-controlled companies. This indirectly funds groups like the KIA. As a result of such arrangements, policymakers in both Beijing and Kunming fear that the consequences of insurgent violence will spill over onto the Chinese side of the border. This grants organized criminal networks and the rebel groups they are attached to considerable leverage over government institutions. In extreme examples, they may even be allowed to wrest concessions from Naypyidaw, Myanmar’s capital.
The government of Myanmar’s pursuit of domestic and external agendas is significantly undermined by the criminal activity that emanates from both separatist minority regions and more traditional organized criminal networks. A major factor hobbling Naypyidaw’s efforts to enforce the law of the land is the authorities’ inability to function as a united entity. In environments where corruption and contact with organized criminal networks is not a high-risk activity, public servants are receptive to bribes and other forms of quid pro quo. Unfortunately, in some parts of the administration, involvement in illicit activities has been more a rule than an exception.
The entrenchment of these interests within Myanmar has meant that data on the jade trade is suppressed. This fact may seem surprising since licenses to mine and export jade are legally required to be registered. Logically, this would mean that the government should have some overview of the extent of the problem and be in a position to publicly report figures about the trade. However, at the time of writing, this is certainly not the case, and such figures are unavailable. In effect, the strategic decision to obfuscate information contributes to a symbiotic relationship between the state and organized crime. As one jade businessman commented, “if published, the whole world would know … how much mining tax the government should get. They don’t want the world to see” (Sun, 2013, p. 27). Similar corruption is frequently found on the other side of the border as well. When the former vice chairman of China’s Central Military Commission, Xu Caihou, was charged with corruption in 2014, 100 kilograms of jade were found secured in his basement.
Afghanistan and Stability
Dominant source of illicit trade: Narcotics (Heroin)
Value of the industry: $USD 2.4 billion
Position in the shadow market: Growing region
Main strategy of organized criminal networks: Confrontation and infiltration
Afghanistan and Stability
Having suffered more than three decades of near-continuous conflict, Afghanistan has become a symbol for violence and instability. While the country is an extreme example and is often referred to as a “failed” or “narco-state,” as a case study it provides some instructive insights into the way organized crime interacts with the global economy. Opioids emanating from the country’s lawless poppy fields have flooded the world market. Indeed, an estimated 94% of the world’s heroin supply originates from the country’s so-called Golden Crescent. Money generated through opium addiction flows back to Afghanistan, where it fuels instability and undermines the rule of law in neighboring countries.
Since the collapse of the Islamic Emirate of Afghanistan after the 2001 U.S.-led intervention, the Taliban have evolved into an insurgency with a broad support base. Much as in Myanmar, Afghanistan has witnessed a marriage between Islamist (separatists in Myanmar) and organized crime activities. The three major arteries of trafficking leading north into Central Asia, west into Iran, and south into Pakistan, respectively, have ensured that the Taliban leadership has vested interests far beyond Afghanistan’s borders. In the wake of the rise in violence following the U.S. invasion of 2001, the amount of poppy being produced in the region is believed to have tripled (UNODC, 2016).
There is a correlation between areas in Afghanistan involved with the cultivation and trafficking of poppy and those areas where the central state holds minimal control. The reliance on agriculture and the inability of state institutions to secure basic civilian needs necessitate the production of poppies and control of smuggling routes. Organized criminal network groups command a strategic interest in contesting the central state in areas with a heavy trafficking presence. This explains the prevalence of attacks on border guard units. Minority groups that inhabit the border regions can take advantage of alienated co-ethnics living in neighboring states, both to strengthen trade networks and to establish bases of operations outside of the state’s control. Waziristan is a prominent example of how this undermines regional stability. This Pakistani province just across the border from Afghanistan has become a paradise for both insurgents and drug traffickers. Warlords have managed to guarantee stability and ensure security to people living under their control. This is an evident case in which organized criminal networks have taken on the role of the state by providing the public good, which has proven to be detrimental to the authority of the government.
State weakness has encouraged the Taliban to increase their efforts to replace the Islamic Republic of Afghanistan. Although most commentators avoid referring to the Taliban as an organized crime group, the movement has cultivated ties with criminal networks around the world to finance their operations. Furthermore, the Taliban are known to have hosted and encouraged terrorist training camps; notably, they provided a safe haven for the infamous terror group, Al-Qaeda. A significant portion of the funding for these activities has come through narcotics trafficking and related activities. Although members of the international community (most notably the United States) have launched many efforts to counter international Islamic terrorism, it has been at an enormous financial and political cost.
The corrosive power of organized criminal activity is not limited to the opponents of the state. According to Transparency International’s Corruption Perception Index, Afghanistan consistently ranks among the world’s most corrupt nations (Transparency International, 2015). Poverty and violence have conspired to give rise to an environment where kickbacks, political favors, and rent-seeking behavior are commonplace. Instability has forced the government to rely on local power brokers, who often command personal militias and take advantage of their position to profit from smuggling and expand their operations. Abuses of power and rampant embezzlement sap the state of legitimacy and impede any efforts by the international community to promote long-term development in the region. Afghanistan’s government has in effect become dependent on heroin. The USAID budget for 2017 has set aside USD 1.45 billion USD in an attempt to strengthen reforms and promote good governance in Afghanistan and Pakistan, at least some of which will indelibly flow into the coffers of the organized criminal networks (U.S. Department of State, 2016).
When the drug economy attains such a proportion, as in Afghanistan, a security paradox comes into being: the narco-economy represents a source of security for the farmers and those at the bottom of the value chain, even if threats and pressure are commonplace. At the same time, it represents a threat to the security of the state as well as the international community. The delicate balance of combating the narco-economy and strengthening the legal economy has repeatedly failed, and the Afghanistan example clearly shows how poor policies can create the narcotization of a state.
Beyond the global threat of Islamist terrorism and the destabilization of the region, violence and exploitation in Afghanistan have led to an exodus of large portions of the population. According to estimates by the United Nations High Commissioner for Refugees (UNHCR), currently about 1.5 million Afghan refugees reside in Pakistan and another 950,000 in Iran, though these figures may very well be lower than the reality (UNHCR, 2015). Some 15% of migrants arriving in Greece and Italy during the ongoing refugee crisis are believed to be Afghan nationals, making Afghans one of the largest contingents of asylum seekers trying to enter Europe (UNHCR, 2016). This exodus means that it is difficult for the country to retain the resources invested in the population, as at least part of the country’s human capital will flee or emigrate, while the economies of countries taking in refugees are strained and confronted with political problems.
West Africa—Cocaine Transit
Dominant source of illicit trade: Narcotics (Cocaine)
Position in the shadow market: Transit region
Main strategy of organized criminal networks: Infiltration
Although states in West Africa rank among the poorest in the world, its drug trade is an industry valued in billions of U.S. dollars (West Africa Commission on Drugs, 2014). After ceding independence from imperial powers, much of the region is now characterized by ethnic strife, poor governance, and food insecurity. The specters of corruption and civil war have scarred many of the states in the region and preclude the development of robust and functional state structures. More recently, the knock-on effects of climate change and Islamist insurgencies have further undermined the region’s stability.
While most West African countries do not lend themselves to the large-scale cultivation of narcotics and are not major producers of drugs, illicit trade routes have transected the borders of several states and corroded many aspects of civilian and political life. It would be incorrect to characterize West African organized crime as a regional phenomenon born out of local problems. In reality, West African organized criminal networks are part of a supply chain that emanates from South America, notably Colombia and Venezuela. Over the past decade, states such as Guinea-Bissau and Nigeria have become transit points for organized criminal networks seeking to bring their wares (narcotics, illegal arms, counterfeit goods, etc.) to the lucrative markets of North America and Europe. This has allowed local crime syndicates to firmly embed themselves into both West Africa and the Transatlantic Narcotics Supply Chain. Infiltration is the strategy adopted by many organized criminal networks in this region to ensure cost-effective and secure illicit trade. State weakness and a history of corruption have allowed organized criminal networks to quickly dominate the economic market of the region.
Precise figures about the West African drug trade are difficult to come by owing to the opaque nature of transnational organized crime. The UNODC estimates that since 2005, cocaine smuggling from South America to Europe has drastically increased and is now so large that it threatens stability and development. Drug cartels based in the Andes have been able to exploit the weakness of West African law enforcement to undermine states. In some cases, they have coopted government institutions to launder money and find vulnerable points of entry into European states. Synthetic drugs and opioids have also become common goods on the route north from West Africa. Drug traffickers have become so instrumental to political patronage networks that organized criminal networks and governments have in effect merged into single entities.
Guinea-Bissau is one more recent example of a West African state that has been part of this dramatic increase in the prominence of transnational organized crime. Owing to its strategic location along the coastal route to Europe, the poor competency of its poor law enforcement, and its stagnant economy, the country has become highly susceptible to corruption and trafficking. Guinea-Bissau is a major hub for narcotics smuggling with local institutions, and social networks have grown around the illicit enterprise. This has led to a situation in which the shadow market can prosper and grow to draw in legitimate business interests. The lack of state intervention and the potential infiltration of criminal elements into the government have prompted commentators in places such as the United States to refer to the country as a “narco-state.”
Officials in Guinea-Bissau are fully aware of the problems arising from the trade in illegal narcotics. The political will to tackle crime does exist in some quarters, but a crippling lack of resources precludes any real progress. Not only is the government impotent in its opposition of organized crime but, owing to the absence of any significant commitment by international partners, organized criminal networks can simply outbid or coerce the slightest opposition to their business interests. The Gulf of Guinea has become an arena in which maritime criminals can operate in areas of weak governance, adding kidnapping, oil theft, and environmental destruction as further corollaries to the impact of drug trafficking.
Assessing the extent of transnational organized crime in West Africa necessitates an analysis of myriad factors. Globalization and a growing integration into both the legitimate global economy and its illicit twin have had an impact on states in West Africa. Like many governments that are based on an extractive relationship with the public, Guinea-Bissau is susceptible to the allure of the “quick gain results” from the shadow economy. Weak law enforcement and an absence of independent, incorruptible safeguards, coupled with ease of access through permeable borders, have made the country an ideal haven for organized crime.
When analyzing how international action could help to alleviate the region from criminal control, an important question needs to be taken into account. Namely, considering the poor economic situation of the region, how much illicit money is required to induce instability? The entire military budget of some West African countries is less than the wholesale value of a single ton of cocaine in Europe. Therefore, little incentive is required for individuals to turn to the shadow economy. It is for that very reason that South American cartels have exploited this region. If one nation receives stronger enforcement measures from international efforts, then the problem simply moves to a weaker neighbor. The push down–push up effect is further exacerbated because of the Economic Community of West African States (ECOWAS), which allows for the free movement of people and goods in this region. In theory, drugs and contraband can move uninhibited from one West African country to the next. It is therefore imperative that the issue be tackled regionally.
Moreover, given that corruption has infected the very highest levels of public officials, investment in the region must be very carefully consigned. The central aspect is taking away the cost effectiveness of the West African route into Europe. Greater controls and transparency will mean that it will no longer be profitable for traffickers to use this route; this is a key measure in protecting such a vulnerable region.
The three case studies present extreme and very different examples of how transnational organized crime can take hold of a country and its foreign policy. Each case has its own defining characteristics, which vary depending on the strength of the host state and the network’s position within the supply chain. The unifying theme of these examples is the undeniable strength of the shadow market and its effect on international politics; also important is how great the impact could be on weak states and economies if ineffective policies were to be implemented domestically as well as internationally. High demand leads to a rise in supply and individuals determined to take advantage of the market. Corruption in these cases restricts states’ ability to break down this equation.
A three-part model distinguishes methods of operation. Evasion, confrontation, and infiltration are part of the “toolkit” employed by organized crime and should not be mistaken as stages of development. Each part of this model can be harnessed by a network interchangeably depending on the strengths or vulnerabilities of the host state. The malleability of transnational organized crime is part of what makes it so difficult to tackle. If measures like sanctions are applied in one area, the organized criminal networks will play to their strength by changing methods or rerouting trade. This was the case when opium production in Myanmar diminished and Afghanistan rapidly became the world’s lead supplier of heroin. The “push down–push up effect” often reverses any progress made by international sanctions. Despite the significant investment in resources that have been expended to combat it, transnational organized crime still remains. With regard to foreign policy, the loss of resources, both tangible and intangible, has a significant impact on the development, implementation, and effects of bilateral and multilateral relations.
Because of its transnational structures, in combination with organizational decentralization, the foreign policy impact is immense and difficult to manage. States’ inability to combat transnational organized crime or even their direct or indirect complicity strains relations, and ethnic or religious groups’ cross-border interaction has proved to directly impact the security of neighboring states.
Organized crime feeds on “weak” states and on economies prone to instability and economic stagnation. Regardless of whether a group is ideologically or socially driven, corruption and the use of force will always remain attractive avenues to pursue goals. While combating crime is vital for the continued survival of states and global prosperity, it must be dealt with in concert by the international community. States that act alone may end up doing more harm than good. The approaches familiar to the law enforcement agencies of nation-states cannot be used to promote human security, good governance, and socioeconomic development in a globalized world. International policymakers must act together to address the many threats emanating from organized criminal networks.
The public can be quick to dehumanize perpetrators and cast them as hardened criminals. While this characterization may be true in some cases, most individuals involved in the trade consider themselves businesspeople or simply, workers providing for their families. This is something that is especially true among farmers, who make the least from the trade. Transnational organized crime cannot be cast as a black and white issue; despite its deplorable business, transnational organized crime often provides public goods that the state has failed to make available. Consumers of the illicit trade are just as much involved; without the demand, there would be no need for supply. It is therefore paramount that countries with markets generating demand take responsibility for the issues pertaining to transnational organized crime and seek to address the roots of the problem. In crafting effective foreign policy initiatives, decision makers should not take the easy route of blaming the source and transit countries, whose populations are often the most susceptible to violence and poverty.
Given the imperfect data academics and analysts are forced to rely on, any inquiry into the effects of organized criminal networks on policy will inevitably lead to imprecise conclusions. For more thorough analyses to be carried out, it is imperative that data gathering be improved and impartial sources of data be expanded. Especially when seeking to consider long-term and knock-on effects of policy initiatives, as well as their ramifications, a nuanced appreciation of potential risks and externalities is vital. This can best be undertaken by nonpartisan, independent agencies that do not rely on official data provided by states afflicted with the issue of organized crime.
We would like to extend our thanks to Oskar Gustafson, Pär Nyrén, Serena Sorrenti, and Julian Tucker for their excellent work with this chapter.
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(1.) The Convention does contain a definition of “organized criminal group.” In Article 2(a): a group of three or more persons that was not randomly formed; existing for a period of time; acting in concert with the aim of committing at least one crime punishable by at least four years’ incarceration; in order to obtain, directly or indirectly, a financial or other material benefit.
(2.) The result of this has been the rise of cryptocurrencies, such as Bitcoin, which function as decentralized mediums of exchange and employ encrypted programs to secure financial transactions.
(3.) One of the more curious ways in which this is done is through the creation and use of cryptolects. Cryptolects, also sometimes referred to as cants, are secret languages used by closed social groups to communicate secretly in public. Derived from local idioms, these secret languages often involve reversing the meaning of words, using codes or mixing in elements of foreign languages. Examples include Fenya, the language of the Russian “Thieves-in-Law,” or the Shelta of Irish traveler groups, which blends elements of the Gaelic and Romany languages. The creation of these argots specific to closed subgroups lends itself to concealing criminal activities and in turn fosters a sense of cohesion within a criminal network, which is a first step toward organization.
(4.) Estimation based on figures from several sources, including the UNODC, Africa Economic Development Institute, U.S. Senate, Caucus on International Narcotics Control, Hearing: Countering narcotics threats in West Africa, Opening Statement of Senator Charles E. Grassley, May 16, 2012.