Global Economic Collapse Means Boom Times for Criminal Syndicates
In all catastrophes, there are always winners among the host of losers and victims. Bad times, like good ones, generate profits for someone. In the case of the present global economic meltdown, with our world at the brink and up to 50 million people potentially losing their jobs by the end of this year, one winner is likely to be criminal activity and crime syndicates. From Mexico to Africa, Russia to China, the pool of the desperate and the bribable is expanding exponentially, pointing to a sharp upturn in global crime. As illicit profits rise, so will violence in the turf wars among competing crime syndicates and in the desperate efforts by panicked governments to put a clamp on criminal activity.
Take Mexico, just now in the headlines. In late March, during her first trip there as Secretary of State, Hillary Clinton was repeatedly asked about the burst of narcotics-related violence in that country, the thousands of deaths that have gone with it, the patent inability of the Mexican military to contain, no less repress, the drug trade, and the possibility that the country might be at risk of becoming a "failed state." Mexico itself may not be in danger of collapse, she replied diplomatically, but a very real danger threatens both countries from a rise in violent crime along the U.S.-Mexican border. "The criminals and kingpins spreading violence are trying to corrode the foundations of law, order, friendship, and trust between us," she declared at a press conference in Mexico City. To counter this danger, the secretary of state promised a militarized response that reflected the level of danger she imagined -- a significant increase in U.S. anti-narcotics assistance, including the expedited delivery of Black Hawk helicopters.
The Mexican drug trade itself is nothing new. The illicit export traffic to the United States and the ensuing bloody competition among drug traffickers for access to the U.S. market have long concerned U.S. and Mexican law enforcement authorities. In the last two years, however, the violence associated with this commerce has grown to unprecedented levels as the leading crime syndicates -- the Juárez Cartel, the Sinaloa Cartel, the Gulf Cartel, and Los Zetas -- have successfully resisted a fierce government crackdown, while fighting among themselves for control over key border access points. According to Mexico's Attorney General, Eduardo Medina-Mora, 5,376 Mexicans were killed in drug-related violence in the first 11 months of 2008 compared to 2,477 during the same period in 2007, an increase of 117%. And as times get ever tougher for ordinary Mexicans, recruiting for the trade grows ever easier while the killings only multiply. U.S. law enforcement officials now believe inter-gang warfare is spilling into the United States in a serious way, producing rising murder rates in border states like Arizona, California, and Texas.
The ongoing slaughter in Mexico may be monopolizing overseas crime headlines, but other parts of the world have also seen sharp rises in criminal violence in 2008 and the early months of 2009 as the global economic crisis has deepened. With legal jobs disappearing, growing numbers of unemployed youth are unsurprisingly drawn to what's still available -- illicit professions or jobs in the military and police that, in many countries, are ill-paid but allow access to bribes. Just such a process appears to be under way in impoverished parts of Africa, Asia, and Latin America.
Drug Traffickers and Pirates
In fact, it's an irony that, as global trading and other aspects of economic globalization are breaking down, crime may be globalizing. Consider recent developments in Guinea-Bissau and Peru, when it comes to the growing reach and savagery of Latin America's drug traffickers.
On March 1st, in Guinea-Bissau, a former Portuguese colony on the west coast of Africa, unknown assailants killed Army Chief of Staff General Batiste Tagme Na Waie and President João Bernardo Vieira within hours of each other. The two men had long been political rivals, and it is widely believed that President Vieira was behind Na Waie's assassination and was then killed in retaliation by members of the country's security forces.
Guinea-Bissau, however, has also become an important way station for the transshipment of illegal narcotics from Colombia to Europe. Many observers believe that the assassinations were tied to in-fighting among the drug cartels and their associates within Guinea-Bissau's political and military elites. While the killings may have been sparked in part by "personal hatreds [and] ethnic rivalries," said Joseph Sala, a former State Department official with knowledge of the country, a factor was also "the growing involvement of Latin American drug cartels."
In Peru, the pervasive lure of illicit drug profits is reflected in the re-emergence of the Shining Path guerrilla movement -- this time as a cocaine smuggling operation. Originally a revolutionary Maoist organization, the Shining Path largely disappeared after its messianic leader, Abimael Guzmán, was captured by Peruvian anti-terrorist agents in 1992. Recently, however, a surviving faction of the group has reappeared in a remote, impoverished jungle redoubt, promoting the growing of coca and its refinement into cocaine. Although still professing loyalty to its Maoist roots, the guerrilla faction appears to devote most of its time to fending off efforts by the Peruvian military to suppress drug trafficking in the area. The result has been a spike in armed violence with at least 22 soldiers and police officers killed in the region in 2008, the highest death toll in almost a decade.
As times get tougher, increased criminal violence is also evident in two other striking ways: as rising levels of piracy on the high seas and as a spike in capital punishment in China.
The increase in piracy has gained particular notoriety since Somali pirates hijacked the Sirius Star, a Saudi supertanker carrying more than $100 million worth of crude oil, in November 2008. In some sense, Somalia may be the poster child for what lies in store for far wider regions in a new era of criminalization. As a genuine failed state, after all, it has been experiencing the local equivalent of a great depression for years. While it has led the way on piracy, the phenomenon is on the rise elsewhere as well. The taking of the Sirius Star was only one of 293 incidents of piracy in 2008 – the highest number since the Piracy Reporting Centre (PRC) of the International Maritime Bureau began compiling such records in 1992. According to the PRC's annual piracy report, 889 crew members were taken hostage in 2008, 11 were killed, and 21 are still missing and presumed dead; guns were fired in 139 of the incidents, up from 72 in 2007.
When it comes to China, whose booming economy was a global wonder until world trade took a tremendous hit last year, it's hard to gauge the level of violent crime, as officials there are said to systematically under-report it. However, there are indications that it is on the rise and that organized crime has secured a stronger presence in the country. In what is evidently an effort on Beijing's part to combat this trend, the government has vastly stepped up its executions of criminals found guilty of capital offenses. In 2007, according to Amnesty International, at least 470 convicted criminals were executed and another 1,860 (or more) sentenced to death. The just-released figures for 2008 show an enormous increase: 1,718-plus executions and another 7,003 people sentenced to death. Some of those killed may have been political prisoners falsely charged with criminal offenses, but most were, presumably, common criminals put to death to intimidate others who might engage in similar behavior.
The Rise of the Narco-state
These developments and others like them naturally beg the question: To what extent can any increases in violent crime in the coming period be attributed to the global economic meltdown?
Certainly the situation in Mexico suggests a close correlation. Like other countries dependent on exports to the United States, Mexico has been reeling from the current crisis. Total exports fell 32% in January, while automobile exports -- a major source of economic activity in Mexico's border states -- fell by 50% in the first two months of 2009. By one account, Mexico's export factories have lost 65,000 jobs since October, a number that experts believe understates the loss. Many economists now predict a painful 5% contraction in the Mexican economy in 2009.
One Mexican export business, however, is thriving in bad times: the drug trade. With so many people out of work or facing diminished incomes, the attraction of being employed by it has certainly risen. By some estimates, illegal trafficking, mainly to the United States, nets the Mexican drug cartels nearly $25 billion each year, making this one of the country's most lucrative industries, and despite an attempted government crackdown, there seems to be no downturn in sight. True, narco-traffickers risk being apprehended and doing jail time, but so many of Mexico's police and court officers are evidently on cartel payrolls that the likelihood of that happening remains modest for higher level operatives. With other job opportunities for poor young men dwindling, the appeal of easy money -- not to mention the faux glamour of an outlaw's life -- must seem irresistible to many.
The crackdown on drug trafficking being conducted by the Mexican government with strong U.S. backing has, paradoxically, made the narcotics trade more appealing as a profession. This is so because increased drug seizures have driven up the street price of drugs, thereby increasing profits for those who succeed in eluding the police and antidrug agents. Given the general economic environment, this is certain to prove a self-perpetuating system that will continue to lure ambitious or desperate young men into the drug trade.
As Professor Francisco E. González of Johns Hopkins University suggests in explaining this predicament in Current History magazine, "[I]t goes without saying that conditions of hopelessness and extreme life choices abound in developing countries such as Mexico. As long as these conditions persist, and as long as the system put in place to counter the narcotics trade leads to the generation of exceptional profits, there will continue to be individuals willing to play this lottery."
In fact, this observation applies no less well to many other countries suffering from severe economic distress. Take Guinea-Bissau and its neighbor Guinea, both essentially indigent countries that are widely described as "narco-states" (that is, states whose political and economic institutions have been thoroughly infiltrated by the Latin American drug cartels). Guinea-Bissau holds the ninth spot from the bottom on the overall U.N. human development index released in December, which measures living standards, health, and quality of life globally. In terms of gross domestic product per capita, however, it's fifth from the bottom, just ahead of Liberia and Burundi. Hardly surprising, then, that a government almost incapable of otherwise generating income is thought to be heavily penetrated by the cartels.
According to UN officials, Guinea-Bissau reaps as much as $1 billion per year in illegal proceeds from the drug trade, a vast bounty in a country so poor. Drug trafficking "is indeed a factor in the current crisis," observes Carlos Cardoso, a researcher at the Council for the Development of Social Science Research in Africa. "Drug trafficking seems to involve the military. Given the ubiquity of the military in political life, anything that affects it, affects the state."
Neighboring Guinea, once known as French Guinea, presents a very similar picture. Ruled until December 2008 by the military dictator Lansana Conté, it, too, had become a haven for South American narco-traffickers. "In the past few years, as Mr. Conté's health declined, Guinea drifted toward chaos," Lydia Polgreen wrote in the New York Times. "South American drug traffickers, who ship cocaine to Europe via West Africa, infiltrated the government at the highest levels. Mr. Conté's son Ousmane confessed on television [in February] to aiding the cocaine traffickers who had turned Guinea into a virtual narco-state." Lansana Conté died on December 23rd and power was usurped by a military junta headed by Captain Moussa Dadis Camara; the junta's young officers have pledged to clean up the country and oust the traffickers, but many Guineans express skepticism about their capacity to accomplish this Herculean task.
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.
Russia has, of course, long been plagued by high levels of individual and organized crime. "The U.S. Embassy receives numerous criminal incident reports from private and official Americans on a routine basis. These incidents include, but are not limited to, racial violence, theft, vandalism, robbery, physical assaults, and murder," the Overseas Security Advisory Council (OSAC), a State Department agency, reported in February. The current economic crisis has, by all accounts, sharply increased the level of such lawlessness. Russian newspapers have reported increases in everything from shoplifting and aggravated assault to murder. "One of the most significant negative consequences of the crisis could be a change in crime trends," the chief prosecutor of Moscow, Yuri Syomin, observed in February. "If life becomes worse, then crime will rise."
One aspect of the growing violence in Russia likely to be replicated elsewhere is attacks on immigrants, who are often portrayed by racist and ultra-nationalist groups as taking jobs from native people at a time of employment scarcity. "There has been a steady increase in racially-motivated incidents and ethnically-motivated violence throughout Russia," the February OSAC report noted. "Attacks on ethnic minorities by young Russian ultra-nationalists who profess a sentiment of 'Russia is for Russians' have risen for the third straight year." These concerns were heightened last December when photos of the decapitated body of a Central Asian male, presumably an immigrant from one of the former Soviet republics, were sent to human rights organizations in the country by an ultra-nationalist group that claimed responsibility for his murder and mutilation.
Wherever one looks, then, the global economic crisis is destined to be accompanied by rising levels of crime, violence, and -- increasingly -- state repression. Worried governments may attempt to forestall the risk of criminal disorder by spending more on law enforcement or, as in the case of China, stepping up the rate of executions. In a world on the brink, this is unlikely to deter those like the Somali pirates who "only want money so we can protect ourselves from hunger."
Without a global stimulus effort aimed at those at greatest risk of destitution, hunger, and homelessness, expect an epidemic of global crime and boom times for criminal syndicates and cartels everywhere.