The illicit economy is a giant, global and growing problem, a new paper by the World Economic Forum Meta-Council on the Illicit Economy shows. But as the widely varying estimates of its cost show, the illicit economy needs to be measured before it can be combatted, according to a new paper by the World Economic Forum Global Agenda Council on the Illicit Economy.
"You need to know your adversary in order to beat it, and sadly there is lack of clarity around the threat of the illicit economy," said Jean-Luc Vez, Head of Public Security Policy and Security Affairs, World Economic Forum, at the Summit on the Global Agenda 2015 taking place in Abu Dhabi this week. "Measuring the illicit economy in a more coordinated and synchronised way thus is the first step global governments and business should take."
The value of the illicit economy is estimated to be upwards of US$1 trillion. Estimates on counterfeiting, one of its largest components, vary from $250 billion (similar to Ireland’s GDP) to $1.77 trillion (similar to Canada’s GDP). Compounding this variability is the fact that almost all estimates are out of date, most often by five or six years but sometimes by more than a decade.
The document says that criminal organisations have exploited the gaps in our governance capacity and policy in addressing the illicit economy. Often more sophisticated and technologically advanced, they are winning the technological arms race against governments in many economies, especially in the developing world.
"The proliferation of illicit activities shows no signs of slowing. It grows particularly in regions where there is lack of governance and social structure. Hence, in an era where several regions in the world are vulnerable and politically unstable, efforts to address these underlying issues must be made," said Adam Blackwell, Chair of the Meta-Council on the Illicit Economy.
The Meta-Council has identified several key areas where all sectors can play a role in curtailing the damage of the illicit economy, to develop a common or harmonised database of knowledge and information exchange, for businesses to employ technologies that allow an appropriate level of information to be shared with the public and law enforcement agencies, better coordination across organisations in joint operational initiatives, and aligning fragmented governance with new concepts around the role of business and individuals In addition, the Meta-Council notes in its paper that technology has been effective in fighting crime in a number of areas. Big data has been used, for example, to uncover sex traffickers in the United States. Combined with satellite imaging, this has had an impact on curbing illegal deforestation. Satellites are also used to tackle illegal fishing while drones have been employed in the war against poaching. DNA could soon be brought to bear in this fight, too, with forensic laboratories able to link stolen ivory to specific animals.