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Misha Glenny – The geographies of transnational organised crime

Misha Glenny, currently working on a full-length book study on the topic, argues that unless policies try to address the demand for illicit goods and services, the fight against transnational organised crime will not go anywhere.


An interview to Pavlos Hatzopoulos for Re-public


Pavlos Hatzopoulos: What would you say are the novel characteristics of organized crime beginning from the late 1980s-early 1990s onwards?


Misha Glenny: There is the co-instance of two events. One was the emergence of globalization and the liberalization of financial markets. The other was the collapse of communism, the consequent end of the Cold War, and the rising of unstable transitional states. What happened was that there was a collapse of state authority in large parts of the former communist world. That collapse created a vacuum and in order for the new market economy to work there had to be policing of contract law. The state was not in position to guarantee it and, as a result, protection rackets emerged all over the place, in former Soviet Union and Eastern Europe. What they were in effect were privatised law enforcement agencies and businessmen were happy to pay them and to pay for them because the state could not guarantee their ability to do business. A huge amount of money became concentrated in small areas in the former Soviet Union. They sought to expand, looking for market possibilities elsewhere.


And this brings globalization into the picture. Money and goods were moving more easily around the world. Transnational organized crime -which is in fact decentralized and very diverse, it is not about huge conspiracies- took the opportunity. The world was globalizing very fast in terms of trade, but in terms of regulation it is globalizing very slowly. So, there are for example, tax differentials between the European Union and countries outside the EU. One of the biggest illicit trades around the world is cigarette smuggling. This happens because many countries have very high taxes on cigarettes.


This combination of events allowed criminal groups to exploit all sorts of opportunities. But, there is also another issue which is very important and that is the nature of globalization. That is mainly the European Union, the US, and Japan that are the main movers of globalization, seek to open up markets in the developed and semi-developed world so that they sell their goods and services in there, place their capital there, repatriate their profits, but maintain very strict control on labour movement. That has created a very large criminal market in the trafficking of human labour. The other thing is that they maintain very high tariffs on their agricultural goods. That means that a lot of the developing world countries cannot penetrate the markets in the EU, the US, and Japan to pay for the goods they are importing –in the name of globalization- from the developed world. And so they seek to penetrate the European and American markets, with goods and services for which there is a high demand and which they produce, i.e. narcotics, women, labour, and so on. So, these are the main issues, which have seen this pretty dramatic rise in the percentage of organized crime as it accounts for the global GDP.


P.H.: Do you think that cybercrime is the future of organized crime?


M.G.: I think that organized crime has a future in all manner sectors. Cybercrime will be one of the big growth areas in the next 15 years. The more that we work with computers and operating systems, the more opportunities there will be for criminals to exploit these. When you just had simple computers and the Internet, there were limited possibilities. Now you have all sorts of daily operations which are run by computers. If you taker the example VoIP (Voive over Internet Protocol), you can relatively easily get a hacker who can listen to the all conversations of a company using VoIP.


The possibilities are endless. There was the famous case two years ago of a British bank that was hacked through a candy vending machine, which was linked to the central operating system of the bank. People involved in cybercrime are sometimes fantastically smart and inventive. They usually have conventional organized crime groups standing behind them which outsource their work.


P.H.: Would it be correct to conceptualize organized crime as a network? And if so, how can fight against a network?


M.G.: No, it’s not a large network. It is a lot of small networks. Wherever you see a crime boss developing a monopoly or a partial monopoly on a trade, as for example in Medellin and Cali in Colombia in the 1980s and 1990s, he was actually uniting a number of small groups under one cartel. Once you break the big guy, Pablo Escobar or Rodriguez Gacha, what you find is that most of these groups retained some relative autonomy and they just move in to fill in the vacuum. Most of organized crime is done by very small groups. Cocaine is one commodity where you tend to have large criminal groups. As it happens, the commodities will have an influence on what kind of groups are formed, depending on the geography of where the good is produced, where it is sold and so on.


On the whole, it is rather like that the lack of impact that the killing of Zarkaoui had in Iraq. It was the same with Escobar – it had no impact whatsoever. Was there any impact on the production of cocoa and its sale in the United States and its price in the US? Absolutely none.


P.H.: In terms of the fight against organized crime, how would you assess existing traditional methods?


M.G.: Well, you don’t have enough money to do it. A lot of resources are taken away. For example, in relation to the war on terror. In the 1990s, organized crime was identified by President Clinton as being on a par with terrorism –what he called the dark side of globalization- but it now has been downgraded. Traditional policing is first under-resourced and second it can’t head at the root of the problem. It is just like putting your finger on a dike.


Traditional policing is important and it can be improved, but it will never work unless you also address the social and economic issues on the supply side, i.e. in Afghanistan, and on the demand side, i.e. what is it that people shift so many of these illegal goods and services into the EU and the US?. It is because that in the EU, for example, with a population of over 400 million people, a large percentage of these citizens have an insatiable desire to sleep with prostitutes, to smoke untaxed cigarettes, to stick 10 pound or 50 euro notes up their noses. Until you address that demand side, you are not going to get anywhere. This is capitalism: the supplier seeks a market and there is a huge market out there. If you look at the statistics, which the British government inadvertently publishes, something between 18-20% of heroin coming into the UK is confiscated. They estimate that only if you confiscate around 60-70% of the drugs coming into the UK will it affect the economic motivation of the suppliers.


Basically, what we do is ineffective: you are going to put some bad guys behind jail but that will not stop the trade.


P.H.: Do you see any positive aspects or positive effects in the multiple operations of organized around the globe?


M.G.: You do in some transitional states, where organized crime provides a certain order. If you look at the classic example of Pablo Escobar, he built schools and churches in Medellin. Pablo was a revered figured in large parts of Medellin, particularly in the barrios and the poorer parts. It may have been bloody in the streets of Moscow, and although the murder rate rose tremendously in Russia in the early 1990s, most of the people being killed were mafia people or businessman. The public actually didn’t suffer. If you take, for example, the Solntsevo area which was home to the biggest organized crime group in Moscow, Solntsevskaya, they made a point of making the streets of their home district safe. Organized crime groups were, in many cases around the world, substitutes for the states and assuming state responsibilities, carrying out functions which the state was not at that time in a position to do.


Having said that, there is no method of independent regulation of organizations like these, and so what tends to happen is that all the money is channeled up to a small group at the top. The para-statal function tends to very arbitrary. One day they wake up and feel like the church needs a new bell – I will give them 400 dollars for that. It doesn’t have any check and balances on it. If you get a very nasty guy at the top then it is bad news for the locals.


Further links


Mob rule


Drug’s and terror: Britain’s role


Special issue: migration unbound, recent articles
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