According to Tony Blair, Britain did not support America's action against Afghanistan solely be-cause of the war on terror. He also claimed that it presented a great opportunity to obliterate the opium industry - it is estimated that Afghanistan supplies 90 per cent of the heroin consumed in the UK. Yet even the government now admits that opium production in Afghan-istan has run out of control since the removal of the Taliban, leading to a startling increase in availability and a steep reduction in the price of the refined drug on British streets.
In recent decades the US has devoted huge sums to the eradication of the coca industry in South America. In all that time, the price of cocaine in the US (which accounts for 40 per cent of the drug's global consumption) has never even twitched upwards. Instead it glides down steadily, proof that Plan Colombia and its successors are a breathtaking waste of resources.
Billions of dollars' worth of weaponry from the former Soviet Union have found their way across the world in the past 15 years, drawn to the spreading conflicts in failed or collapsing states across Asia, Africa, South America, the Middle East and in Europe. They are sometimes bartered for mineral and vegetable resources found in conflict zones: diamonds from Angola and West Africa; coltan (used to make mobile phones) from the Democratic Republic of Congo; and, naturally, opiate derivatives from Afghanistan. There are very few people who do not use some goods or services that owe their passage to the consumer in whole or in part to the shadowy networks that control illicit trade.
Moises NaIm, the editor of Foreign Policy, argues that the purveyors of illegal goods and services, along with their compadres in the money-laundering industry, are steadily eroding the very foundations of the global economy. "Left unchecked," he writes, "illicit trade can only pursue its already advanced mutation . . . This is no longer just about crime . . . [It is] about the new economic realities that have brought to the fore a whole new set of political actors whose values may collide with yours and mine, and whose intentions threaten us all."
NaIm intends his work to be a clarion call that will persuade us to rise up against the corrupt and criminal networks that now account for up to 20 per cent of global GDP. He is undoubtedly correct that this is a very grave problem. To my mind, it runs a close second to global warming and poses a much more serious threat than terrorism (although NaIm sees international terror as an integral part of the shadow economy).
Unfortunately, the global shadow economy is a complex beast that does not lend itself to simple categorisation. In his desire to make his central point as forcefully as possible, NaIm misses some critical influences on the shadow economy, and thus a number of his conclusions are off-beam.
Full disclosure is required here - I am writing a book on a very similar topic, albeit using a different method and style. My work developed from watching the emergence of mafia structures in the Balkans during the Yugoslav wars of the 1990s, and from trying to ascertain their relationship with the emerging democracies and, perhaps even more importantly, with one another. It was striking to see how men at war were happy to engage with one another in lucrative trade deals (for oil, for weapons and for narcotics, not to mention high-end consumer goods). I have been following un-likely trails of co-operation in illicit goods from Ukraine and Russia to Croatia; from Bolivia to Bulgaria; and from a number of Arab and Muslim countries to Israel.
In NaIm's view, the growth in illicit trade is easily explained: "Globalisation happened." He assumes that the Washington consensus, which urges and pressurises countries into opening their markets to a swifter flow of goods, services and capital, is a good thing (which it may or may not be). And he states that malign forces have exploited the openings that this liberalisation encourages.
But he does not investigate the imbalances between developed and developing nations that might leave the latter with no option but to go down the illicit route. Albania, for example, cannot sell its citrus fruit into the European Union because its farmers cannot compete with the subsidies that Greek, Italian and Spanish growers receive under the Common Agricultural Policy. The orchards have since been transformed into cannabis plantations as there is a strong and profitable market for this product in the EU. The trade is driven in the first instance not by evil drug smugglers, but by millions of European dope smokers.
Furthermore, there has been only limited liberalisation of the movement of labour in the globalising world. The job of traffickers in women and economic migrants is made easy by high levels of unemployment and poverty in the countries of origin. Some of the Moldovan and Transnistrian women I interviewed were literally starving when recruiters persuaded them to travel abroad to work as waitresses or au pairs (they ended up servicing as many as 20 clients a day in brothels around the world). There is a huge demand for prostitutes in more affluent areas, while western business is often desperate for the cheap, unregistered labour that migrants offer. The markets are lively, but it is politically impossible to liberalise labour to complement the fluctuations and opportunities created by the movement of capital and goods.
NaIm rightly insists that we should look at the whole issue as an economic rather than a moral problem. The solutions he proposes, however, are to do with improved policing - which drags the discussion back into the moral zone. The reality is that it will take much more than a few snazzy gadgets at borders to address this deeply damaging phenomenon. Policing is part of the solution, but much more important to reducing the negative impact of the trade in illicit goods and services will be a fundamental reassessment of demand in the north (including the central issue of prohibition) and supply in the south.
NaIm comes close to suggesting that the traders in illicit materials are bent on bringing down our civilisation. In fact, what most of them want is a piece of the action. If they are excluded from the official globalisation (for whatever reason), they will find another way to join in the universal hunt for profits.
Despite its flaws, this book opens serious discussion on one of the main issues affecting world economic development. It's not always an easy read, as NaIm packs in case studies and stories, many of which have been cut and pasted from the New York Times and the Washington Post. NaIm works hard to prise it open but, in some respects, the bizarre world of the shadow global economy remains a closed book.
Misha Glenny is the author of The Balkans: nationalism, war and the great powers 1804-1999 (Penguin)