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NCJ Number: 164350 Find in a Library
Title: Economic Reform and Criminal Finance
Journal: Transnational Organized Crime  Volume:2  Issue:1  Dated:(Spring 1996)  Pages:66-80
Author(s): D I Keh
Date Published: 1996
Page Count: 15
Type: Survey
Format: Article
Language: English
Country: United Kingdom
Annotation: Profits from the global drug trade represent a substantial portion of the financial reserves available to international crime syndicates, and criminal organizations use these earnings to exploit the needs induced by macroeconomic reforms.
Abstract: Economic reforms, well-meaning as they may be, can open up an array of lucrative investment opportunities in the informal credit sector from which criminal organizations are exceptionally well-placed to profit. Two categories of reform--macroeconomic stabilization and structural adjustment--are considered. Macroeconomic stabilization covers policies aimed at improving current account imbalances and reducing inflation. Structural adjustment involves financial market liberalization, capital account convertibility, and privatization. Reform measures either create a pool of unmet credit need or raise the profitability of investments that legitimate financiers cannot or will not take advantage of. The term "criminal finance" describes the process by which crime syndicates invest in the informal credit sector. Rather than reintroducing barriers to international trade and finance, criminal controls are needed that allow the market to fully serve its purpose as a resource allocation mechanism. Even though some believe regulatory controls of any kind will raise costs and are therefore inherently undesirable, the costs of ignoring the risks of organized crime are high. The following safeguards are fundamental in the control of criminal finance: transparency in financial records, bankruptcy laws, antiracketeering laws, social safety net, information exchange, and internationalization of drug control. 60 notes
Main Term(s): World criminology
Index Term(s): Crime in foreign countries; Criminal infiltration of business; Drug business; Drug regulation; Drug smuggling; Economic analysis of crime; International drug law enforcement; Organized crime; Organized crime prevention
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