The term illicit economy refers to all illegal economicactivity. Sometimes referred to as the shadoweconomy, black market or informal economy, itrepresents the dark side of globalization. Itundermines economic potential, siphons offlegitimate profits, and hampers future economicgrowth and investment.
The illicit economy is one of the most daunting challenges we face today. It is growing byleaps and bounds, accounting for 8 to 15 percent of the global Gross Domestic Product, saidSenior Director for National Security and Diplomacy Anti-Crime Programs, David Luna.
“The global illicit economy is experiencing a boom across a wide spectrum of activities:narcotics, kidnapping-for-ransom, arms trafficking, human smuggling and trafficking, the tradein stolen and counterfeit goods, smuggling of antiquities and cultural artifacts, bribery, andmoney laundering.”
The illicit economy robs legitimate markets by undercutting legitimate businesses. Black marketparticipants do not pay sales or corporate taxes or import tariffs. They do not necessarilyguarantee the quality or authenticity of the goods they offer, and thus could be cheatingtheir customers. Authorities that cannot stop them may be viewed with suspicion, leading todistrust of institutions and a deterioration in the quality of life for millions of people.
One way to fight the global illicit economy is to crack down on intellectual propertyinfringement.
“Protection of intellectual property is at the very heart of economic growth and innovation.When innovators and creators know their creations are safe from theft, they are more inclinedto bring new products and ideas to society that enrich and improve our lives.”
“Weak protection, on the other hand, makes it difficult for private companies to reap thebenefits of their investments in R&D and thus reduces their incentive to make thoseinvestments,” said Director Luna.
Thus we must enact and implement strong and effective laws to combat criminal activities.At the same time, governments, businesses and citizens need to cooperate across nationalboundaries to defend our shared interests. Above all, we must all work together, said DirectorLuna.
“It is not hyperbole to say the convergence of illicit networks is an existential threat tohuman progress. We must stand together to meet – and defeat - this threat.”