Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy [Hardcover]

Moises Naim (Author)

Book Description

Release date: October 18, 2005

Pick up a newspaper anywhere, any day, and you will find reports of illegal migrants, drug busts, smuggled weapons, and laundered money or counterfeit goods. Illicit trades are booming and so are the traffickers’ revenues—and their political influence. Hamstrung bureaucracies in rich and poor countries alike are losing the battles against these agile, well-financed, politically powerful, and ever-shifting networks of determined individuals. Religious and political zeal drive terrorists, but it turns out that simple profit is no less a motivator for political upheaval and international instability. Black-market networks are stealthily transforming global politics and economics.
Filled with fast-paced, vivid examples that are as real as they are surprising, Illicit shows how we got to this dangerous point—and stresses the interconnections between these illegal enterprises, how they endlessly recombine to breed new lines of business, distort the economy of entire countries and industries, enable terrorists and even take over governments. From pirated movies to weapons of mass destruction, from human organs to endangered species, drugs or stolen art, Illicit reveals the inner workings of these amazingly efficient international organizations and shows why it is so hard—and so necessary—to contain them.
Illicit offers a fresh, ingenious and compelling vision of this untold story of globalization. It provides a powerful new lens with which to assess how today’s world really works and where it may be headed. Illicit will surely ignite urgent debate at the highest levels—and change the way you think about the world.

Editorial Reviews

Amazon.com Review

Illicit activities are exploding worldwide. The onslaught of globalization has unleashed a tidal wave of bad stuff--everything from arms trafficking, human smuggling, and money laundering to music bootlegging. Here is the dark side of globalization: the mushrooming underground economy. Moisés Naím explores this murky world in his book Illicit. Naím is the editor of the relaunched magazine Foreign Policy and a former executive director of the World Bank and Minister of Trade and Industry of Venezuela. In Illicit, he unties the connections between the Colombian cocaine dealer, the New York banker steering money to offshore tax havens, the Albanian forcing women into prostitution, and the Chinese market stall-holder selling counterfeit DVDs.

Naím reports that legitimate global trade has doubled since 1990 from $5 to $10 trillion. Meanwhile, money laundering has gone up tenfold, exceeding $1 trillion a year. Smuggling and money laundering have always existed, but Naím shows how they have increased at a staggering pace in the wake of globalization, despite new government controls since 9/11. The main culprits are the collapse of the Iron Curtain and state deregulation. As the reach of organized crime has expanded, governments have failed to keep up. Naím illustrates the problems with stories about A.Q. Khan, the father of Pakistan's atomic bomb who sold nuclear technology to North Korea and Libya; Walter C. Anderson, an American who was accused of hiding $450 million in offshore accounts to evade taxes; and Vladimir Montesinos, the Peruvian intelligence czar who is on trial for trafficking drugs and arms. The book, while a little dry, will be interesting to policy buffs and aspiring crooks alike. --Alex Roslin

From Publishers Weekly

Starred Review. In this sweeping and informative work, Foreign Policy editor Naím demystifies the global trade in illegal goods and services and, in the process, presents an original portrait of globalization that skillfully eschews the utopian doggerel that often characterizes such accounts. Naím provides a detailed tour of the major globalized criminal activities—drug production and distribution, illegal arms dealing, human trafficking, counterfeiting, money laundering and so on—and introduces a host of criminal networks that profit from them. The book is regrettably devoid of the kind of firsthand reporting from the field that would have made the subject matter really jump off the page. Yet Naím creates a picture of illicit trade which demonstrates that, far from taking place in a shadowy underworld, such activity is inextricably linked to legitimate commerce and directly affects all of us. In Naím's view, globalization's "diffusion of power to individuals and groups" and away from sovereign states has created a "smuggler's nirvana," in which the lines between legitimate and illegitimate economic activity are blurred and criminal networks possess an unprecedented degree of political influence. Making matters worse, the widening gap between global haves and have-nots—what Naím calls "geopolitical bright spots and black holes"—has increased the incentive for individuals and groups on both sides of the divide to participate in illicit activities. The remedy? In addition to offering a bevy of specific policy ideas, Naím urges readers to move away from simplistic moral denunciations and to focus, instead, on reducing the demand for criminals' goods and services and on weakening the incentives for ordinary people to become involved in their enterprises. (On sale Oct. 18)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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Product Details

• Hardcover: 352 pages
• Publisher: Doubleday; 1St Edition edition (October 18, 2005)
• Language: English
• ISBN-10: 0385513925
• ISBN-13: 978-0385513920
• Product Dimensions: 9.3 x 6.3 x 1 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (23 customer reviews)
• Amazon Best Sellers Rank: #676,027 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

45 of 46 people found the following review helpful

5.0 out of 5 stars The Bureaucracy vs. The Network December 3, 2005

By KEVIN M. OCONNOR

Format:Hardcover

Illicit bursts with detail and example, though it contains very little in the way of illustrative anecdotes. The author seems mainly concerned with communicating two main points. First, our conceptions about the nature and organizational structure of international trafficking networks has fallen dangerously out of date. Second, operating assumptions and ideological sacred cows prevent governments from framing the problem of illicit trafficking in a way that will allow for constructive action.

Concerning the first point, the "cartel and kingpin" conception of narco-trafficking formed and propagated in the 80's no longer applies. Our present counter-narcotics strategies assume that the enemy organization has a hierarchical structure with information and power flowing up and down a chain of command. In fact, trafficking organizations these days take the form of decentralized networks which shift continuously, assuming new configurations as opportunities present themselves and then morphing again to meet the needs of the next moment. Also, today's traffickers don`t specialize in a single commodity like cocaine. Instead, they move whatever goods present an opportunity for profit in the present moment; drugs today, arms tomorrow, people the next day and then knock-off designer handbags after that. Only the small players at the beginning and end of the supply chain specialize in particular products, e.g. the Bolivian coca farmer and the illegal immigrant selling bootlegged DVDs or knock-off Rolexes on the streets of New York.

The author's second point concerns two ideological sacred cows. First, he warns against the politically entrenched practice of talking about illicit traffic in strictly moral terms.... Government officials denounce illicit traffickers as evil-doers rather than acknowledging that traffickers act from economic motives determined by market forces. Drugs and other illicit goods bring great financial reward when moved from one place where traffickers can purchase them at a low price to some other place where they command a high price. Adaptive systems like markets and networks make short work of the kinds of problems that prohibition-minded bureaucratic hierarchies place in their way. Talking about illicit trafficking in economic rather than moral terms would produce a more intelligent discussion and offer more effective courses of action.

Here and there throughout the early chapters, the author drops the occasional hint that he advocates legalizing marijuana, and at the book's end he makes that point explicit. In a free society marked by an ever-increasing volume of international trade, governments will have to pick their battles. Spending billions to try to interrupt the traffic in marijuana makes no sense if we hope to make any headway curtailing the trade in nuclear weapons technology, radiological materials and sex slaves. Don't mistake Naim for any kind of Libertarian. He makes it quite clear that he wants to see governments win the battle against illicit traffickers. He just knows that, realistically speaking, we have to prioritize, and that trying to keep millions of eager marijuana customers from millions of eager sellers serves no useful purpose and consumes resources that could otherwise be put to good use.

The other ideological sacred cow involves national sovereignty. Naim doesn't advocate subordinating the US federal government to the U.N., but he does call for much greater coordination of efforts with our closest allies, and such a move will entail some compromise of the absolute national sovereignty upon which the US government now insists. Read more ›

53 of 65 people found the following review helpful

5.0 out of 5 stars Definitive Volume--$2T/Year and Growing, Lost Government Revenues October 30, 2005

By Robert David STEELE Vivas HALL OF FAMETOP 500 REVIEWER

Format:Hardcover|Amazon Verified Purchase

I have known Moises Naim for many years, and admired his pragmatic approach to managing the content of Foreign Policy, as published under the auspices of the Canegie Endowment for International Peace. He has been Minister of Trade and Industry in Venezuela, a dean and professor of business administration, executive director of the World Bank, and an accomplished thinker and author. Above all he has been moral. He gets it: morality in politics and morality in business are priceless.

This book is important in two very big ways: the first, the one that most are noticing, is that it documents very ably the fact that crime pays--the author has done a superb job of itemizing the global illegal trade industry in a manner that could be understood by anyone, and the bottom line is frightening in that illicit trade is perhaps $2 trillion a year, while legal trade is between $5 trillion and $10 trillion. Off-the-books bartering and immoral invoicing within corporations are additional reducers of government tax revenue--import export tax fraud in the USA is known to be $50 billion a year ($25 rocket engines going out, $10 pencils coming in).

The second reason this book is important, the real value of this book, is in documenting the revenues lost to government. Legalizing prostitition has economic as well as public health implications. Reducing the arms trade, where the US is the greatest exporter of violence and bribery, has implications across ethnic conflict, stability, water and oil conservations, and so on. Eliminating counterfeiting and illegal immigration would have enormous implications for positive constructive government revenue.... I personally know where $500 billion a year can be found in additional tax revenue for the US, mostly from eliminating pork barrel subsidies and corporate fraud, and by restoring the traditional share of corporations to the tax fund--when Halliburn pays $15M on billions in profit, when Exxon makes $3 billion in profit in a single quarter with no requisite tax bite, the system is broken. Eliminating crime, and corporate crime, provides the financial foundation for restoring the democratic contract, the social contract, with the working class and the middle class.

Moises Naim has, in brief, delivered the seminal work on one of the five factors that will determine how the human species does in its World War with itself and with bacteria. The other four factors are the end of cheap oil, the end of free water, the virulent re-emergence of infectuous diseases accompanied by the mutation and migration of new diseases from animal hosts to humans; and the promising but by no means assured emergence of collective democratic intelligence, perhaps aided by real-life decision support games such as those produced by BreakAwayLtd.com.

I consider Dr. Naim to be one of the most precious intellects now active--as penetrating but more pragmatic than Joe Nye, as strategic but more pragmatic as Zbigniew Brzezinski, as articulate but more pragmatic than my all time favorite strategist, Dr. Colin Gray from the United Kingdom.

Naim is a giant. He also represents, if I may be permitted an observation from my decades in Latin America and my Colombian-born mother, why Latin America is the future and why the US ignores the Chinese takeover of Latin American lands and resources, the Iranian penetrations, and the related Brazilian, Indian, Pakistani, and Russian incursions, at its peril. Latin America is both the source, and the solution, for most of the illicit trade that undermines the Republic. It's time we recognize that morality matters, crime is a greater threat than isolated terrorism, and Latin America is part of the Americas--the part that may achieve informed populist democracy before the USA recovers from the neo-conservative coup d'etat and ethical misadventures of a White House owned by Halliburton and dismissive of both the domestic and international publics. Read more ›

10 of 11 people found the following review helpful

5.0 out of 5 stars Captivating! October 29, 2005

By Eusebio Mayz

Format:Hardcover

This is one of the the best books I have read this year. I could not stop reading it once I started. It combines jaw-dropping facts that we should all know-- but don't --with fascinating stories about how the globalization of smuggling is changing politics everywhere. As the Editor of The Economist writes in the back cover this book changes the way one sees the world. Naim is a great writer. Read this book.

7 of 7 people found the following review helpful

3.0 out of 5 stars Interesting, But Hard to Put into Perspective December 6, 2005

By Loyd E. Eskildson HALL OF FAME

Format:Hardcover

"Illicit" provides an interesting (but sometimes repetitive) summary of the various genre of illicit trade, difficulties in prosecuting such activities and how they sometimes conflict with government decision-making, but little in the way of data that allows one to put the topic into perspective - eg. what percentage of total trade is illicit, and how is that changing over time? (Steel's review provides some data, but no details as to its origin.)

Naim states that illicit trade in developing nations and those leaving communism is often the most powerful vested interest - in some cases more powerful than government. Raising barriers simply increases profit rates and incentives.

Arms Trade: A. Q. Khan, national hero in Pakistan, has provided nuclear technology to other nations (presumably for primarily economic, rather than ideologic reasons), surplus arms released from Cold War downsizing, arms manufacturers seeking to replace former markets and unguarded Iraq arsenals have all served to increase supply. As for deterrence, Naim points out that the U.S. (under Bush II) sidetracked a U.N. conference on illicit trade in small arms/light weapons on the grounds that such would violate its Constitution.

Drugs: Naim reports that research has led to new forms of cocaine resistant to herbicides and increased plant size, while violence and bribes are endemic in the industry.

Counterfeiting of software, drugs, music, consumer goods, parts, etc. represents 5-10% of GDP, per Naim....

Moneylaundering, a prime concern of those opposing terrorism, is aided by the very large flows of money, reduction of exchange controls, reduced restrictions on foreign investment, and the ease with which one can break down large amounts for electronic transfer using computers and the Internet.

Other topics include organ trafficking, stolen art and antiquities.

Barriers include multiple jurisdictions within a nation - combined with "stove-piping" structures that inhibit sharing information across similar levels, variation in what's illegal in the nations involved, involvement of multiple nations, and serious threats and bribes for those that would oppose illicit activity. Industry group efforts to contain eg. software piracy are cited as a "plus" by Naim.

Naim recommends reducing the overfocus on supply-side (eg. illegal immigrants - focus more on employers), terrorism as a state issue, increased use of biometrics, and decriminalization of some areas such as marijuana and counterfeiting of consumer goods to allow increased focus on more serious areas. Good suggestions, but not likely to make major impact. Read more ›