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April 16, 2013

UN: Asia's Transnational Criminal Profits Dwarf GDP

by Daniel Schearf

The U.N. Office on Drugs and Crime says criminal groups in East Asia and the Pacific are earning $90 billion annually, most of it from narcotics, fake goods, illegal wood and wildlife, and smuggling people.
 
According to the UNODC study released Tuesday, “Transnational Organized Crime in East Asia and the Pacific, a Threat Assessment," well-organized crime syndicates, reaching suppliers in Africa and markets across Asia, Europe and North America, boast criminal earnings that dwarf some economies in the region.
 
"It accounts for approximately 90 billion U.S. dollars a year, which, just to put it in perspective, represents two times the size of the GDP of Myanmar, eight times the GDP of Cambodia, and 13 times the GDP of Lao P.D.R.," said Giovanni Broussard, a Bangkok-based UNODC program officer who drafted chapters of the report.
 
The study says combined sales of heroin and methamphetamines account for more than a third of criminal proceeds in the region, netting roughly $16.3 billion and $15 billion respectively.
 
Most of the heroin is produced in Burma and sold to buyers in China and Southeast Asia. Both Burma and China are also major manufacturers and exporters of methamphetamines.
 
Broussard says efforts to crack down on Afghanistan's opium production for heroin led farmers in Burma to increase production.
 
"That's why we are strongly encouraging countries to work together when devising these strategies ... that repression of one [criminal] activity in one country might have detrimental effect on the neighboring country.
 
Throughout the report, China emerges as one of the most significant players in transnational crime. Counterfeit goods made in China and sold to Europe and the United States make up the single largest illegal industry, amounting to more than $24 billion annually.
 
Fake medicines, mainly from China and India, are found throughout Southeast Asia and as far as Africa, risking dangerous health consequences. The UNODC cites forensic studies showing an average of 47 percent of anti-malarial medicines tested in Southeast Asia were found to be fraudulent.
 
​​China is also the largest consumer of illegal and endangered wildlife, much of it poached from Indonesia, the Philippines, Burma, Laos and Cambodia.
 
Asia's growing demand for traditional medicine and trinkets is also driving poaching of rhinos and elephants in Africa.
 
Broussard says there is also evidence that African poachers are looking for replacements of Southeast Asian wildlife nearing extinction.
 
"We have seen through 2012 more and more episodes of seizures of the African version of … the scaly anteaters, being poached in Africa and seized in maybe one of the transit countries en route to China, [such as] Vietnam," he said.
 
The study estimates more than 30 percent of the region's wood products, a $17 billion industry, were illegally sourced in 2010 and that China and Indonesia are the largest exporters, annually selling an estimated $7 billion and $6 billion respectively.
 
Broussard says efforts to prevent organized crime will fail without China's help and cooperation.
 
"China is certainly a key player," he said. "The size of the country and the growth of its economy makes it certainly a key player in this region. No effective response can be devised in Southeast Asia and the Pacific without the involvement of China."
 
The UNODC says although human trafficking and migrant smuggling are relatively small in dollar terms, about $2 billion annually, damage done to victims is immeasurable.
 
The study notes the Association of Southeast Asian Nations is set to establish an economic community by 2015 to facilitate the free flow of labor, goods and investment, but it warns the economic community will also make possible the increased mobility of illegal goods.