13.4: The Threat of Transnational Crime

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Transnational crime has conventionally been seen as a threat to the state, threatening its national and regional security and rule of law, impeding its political and economic development, and limiting the social and cultural development of its society. Transnational criminals undermine the political and economic institutions of the state through the corruption and bribery of the police, immigration, customs officials, and the judiciary. For example, following the East Asian financial crisis (1997-1998) that resulted in increased poverty and unemployment, some of Indonesia’s coastal inhabitants turned to sea piracy as a means of survival. Low rates of pay among Indonesia’s police, navy and other maritime officials and port workers make them susceptible to corruption by pirates who offer money in exchange for information about the movements of ships and their cargoes (Emmers, 2010).

The illegal exploitation of environmental resources is made possible, and sometimes even organised, by the complicity and protection of corrupt elements in the civil service, security forces and legislature (Elliot, 2007). Over a longer time frame, corruption and bribery destroys the trust that citizens have in the rule of law and the institutions of governance. This is of particular concern in developing countries where the very institutions necessary to tackle transnational crime – political, bureaucratic and law enforcement – are already weakened, as explained in Chapter 8.

Transnational crime also results in much economic harm to the state and its inhabitants through decreased taxation revenues for the state and less employment. The trade in counterfeit parts, for example, costs US automobile manufacturers and suppliers about $12 billion in revenue annually, while up to $9 billion in trade is lost by US companies due to international copyright piracy. Estimates of US job losses due to counterfeiting are as high as 750,000 (International Anti-Counterfeiting Coalition, 2011). Corresponding job gains in poor countries remain unregulated and insecure. Transnational crime can also result in the breakdown of social structures and can be very costly for a country’s social development. Children who lose a parent to trafficking must often quit school and work in order to help support the family. The loss of education has enormous implications for the child, but also for the society as a whole in terms of its future economic development.