Global Economic Collapse Means Boom Times for Criminal Syndicates

By Michael T. Klare, Tomdispatch.com. Posted April 7, 2009.

An environment of poverty and chaos has long prevailed in Somalia, home to the most determined and aggressive of the high-seas pirates. Of the 293 piracy incidents noted by the PRC in 2008, 111, or 38%, occurred in the Gulf of Aden or off the coast of Somalia. Many of the most daring incidents -- including the seizure of the Sirius Star -- also occurred in those waters. By their own account, many of the Somali pirates are former fishermen driven out of business when the collapsed Somali state could no longer protect the country's rich fishing grounds against predation by the highly organized fleets of other countries. Now penniless, these onetime fishermen have taken up piracy to support their families. "Killing is not in our plans," the hijacker of a guns-laden cargo ship told a reporter in October 2008. "We only want money so we can protect ourselves from hunger."

A Syndrome of Crime, Violence, and Repression

China, of course, is no Guinea-Bissau. Millions of Chinese citizens live in relative luxury, the beneficiaries of a quarter-century of unparalleled growth; but millions more still live in extreme poverty, struggling to survive on minuscule farms in the countryside or working as migrant laborers in the cities, mostly in factories making consumer goods for the export market. So long as China's economy was booming, migrant laborers were able to find work in the coastal export factories and send a bit of money back to their families in the countryside. Now, with Chinese trade figures in a major decline and many factories cutting back or closing due to the slump in exports, at least 20 million of these workers are locked out and Chinese officials fear a spike in social unrest and crime.

That 20 million figure was provided by Chen Xiwen, a senior official who heads the Chinese Communist Party's office on rural policy. "For those migrant workers who have lost their jobs, what are they going to do for income when they return to their villages? How are they going to manage? This is a new factor affecting social stability this year," he said at a news conference in February in Beijing.

That many of the migrants will be able to find remunerative work in their own villages is inconceivable -- plots of farmable land are far too tiny and, despite a Chinese governmental stimulus package, there are as yet few other sources of income. As a result, most of these unemployed former peasants will head back to the cities in search of any sort of work. The danger is that many will be cheated out of their pay by unscrupulous factory owners taking advantage of their desperation or will simply find no work at all, leading to angry protests (known as "mass incidents" in China). Count on one thing: as in Mexico and elsewhere, some of them will be drawn into organized crime activities or other illicit pursuits.

Acknowledging these risks, Chen Xiwen spoke ominously of the need for greater government preparedness to contain mass incidents and other forms of social disorder. "If a mass incident occurs, leading cadres must all go to the front line, and talk to the people directly, face-to-face, to explain things," he urged, rather than simply rely on police coercion and thereby provoke greater public anger.

This syndrome -- declining employment in the core economy, growing reliance on jobs in marginal enterprises or in an unofficial black-market economy, and rising rates of violent crime leading to increased state repression -- is likely to be repeated in a range of other countries suffering from the global economic crisis.

Russia is at particular risk from this syndrome. According to a World Bank report released in March, its economy is expected to contract by a staggering 4.5% in 2009 and unemployment is expected to reach 12%, doubling the 2008 figure. The consequences are sure to be severe: "[T]he number of poor people in Russia will likely increase by 2.75 million, wiping out part of the gains in reducing poverty in recent years." This, in turn, will force more people to make ends meet by any means necessary, including participation in the informal economy, petty thievery, and organized crime -- thereby inviting increased repression by state authorities.

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Michael T. Klare is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author of Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency.

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