illicit: reviews

Bloomberg (October 25, 2005)

'Illicit' Shows What Microsoft, Sex Slaves, GM Have in Common

The world according to Moises Naim pulsates with the good, the bad and the just plain nasty.

It's a planet of Internet cafes, offshore banks and Asian girls sold into slavery. The Soviet Union splinters, loose nukes proliferate and rich Germans buy kidneys off poor Romanians. Free markets spread, along with sales of fake Viagra, stolen van Goghs and phony Honda motorcycles.

All of these trends accelerated in the 1990s, Naim recalls in his harrowing book, "Illicit: How Smugglers, Traffickers and Copycats Are Hijacking the Global Economy'' (Doubleday, 340 pages, $26). The political and technological upheaval that marked the end of the 20th century created a "smuggler's nirvana.''

"Call it the darkness within the light,'' Naim writes. "The advances we cherish and seek also produce nefarious opportunities for trade and profit.''

Naim knows a trend when he sees one. As editor of Foreign Policy magazine, he travels from China to Latin America to track the nexus between politics and economics. Wherever he goes, police say illicit trade is more pervasive than people think.

Death Equals Profit

Human smugglers exploit disposable cell phones and e-mail. Colombian cocaine kings hide behind the encryption techniques that make it safe to buy books from Amazon.com Inc. Copycat goods roll off the very Taiwanese factory lines that produce brand-name originals. Abhorrent transactions piggyback on each other: Humans smuggled across borders transport heroin. Chinese prisons supply human organs as well as counterfeit goods:

"More executions mean more profit,'' Naim writes.

Naim is best when he pelts us with examples. Human traffickers, he says, bring us women "for sale'' on the Web; sex slaves in middle-class America; a house on the edge of a golf course in Scottsdale, Arizona, packed with illegal immigrants.

The author anchors these anecdotes in grim context. It took 400 years, he says, to bring 12 million African slaves to the New World. Yet in the past 10 years alone, some 30 million women and children have been trafficked in Southeast Asia, he says.

Moral indignation has done little to stop such abuses. So Naim counts other costs: illegal migration distorts labor markets, corrupts government officials and aids terrorists.

Companies Under Siege

Naim also shows how counterfeit goods gnaw at the world's biggest corporations. The knockoff market extends well beyond fake Gucci handbags, pirated Kylie Minogue CDs and bootleg copies of Microsoft Corp. software. Chinese reverse engineering has stoked disputes with General Motors Corp. (over its bug-eyed Chevrolet Spark) and Toyota Motor Co. (over its logo). Chinese streets hum with copycat Honda Motor Co. motorcycles, Naim says.

"Illicit'' is light on original reporting and heavy on material culled from newspapers and magazines. In a sense this doesn't matter. Naim's skill lies in synthesizing information, not in ferreting it out.

More annoying is his habit of repeating anecdotes. In five different sections of the book, he tell us how Pakistan's Abdul Qadeer Khan, "the father of the Islamic bomb,'' supplied Libya with parts for a nuclear centrifuge. In three places, he tells us about fake Haitian cough syrup laced with antifreeze.

Revisiting material to make new points is OK. Doing it too often makes Naim sound like a prosecutor short on evidence.

Crooks have always been arbitragers, buying cheap in one country and selling dear in another. The West fuels illicit trade with its appetite for officially forbidden fruits.

All in the Family

Yet the dark side of globalization grew darker when nations opened markets in the 1990s. As exchange controls fell, the global volume of currency trades soared, to $1.88 trillion a day in 2004, Naim says. Washing dirty money was never so easy.

The fragmentation of the U.S.S.R., meanwhile, allowed criminals to set up their own states. Transdniester, a breakaway region of Moldova, became "a family-owned and operated criminal smuggling enterprise,'' Naim writes.

Today's criminals enjoy fluid, decentralized networks, he says: They can go where they want and buy the latest technology. Police, hobbled by red tape and national borders, can't keep up. The international police organization Interpol had a budget of about $50 million in 2004 --"one-fifth of the funds estimated to have been available to Osama bin Laden in 2001,'' says Naim.

Targeting Profits

Naim offers pragmatic solutions for how to curb illicit trade. Start by driving out the value, he says: Legalize the use of marijuana and deal more honestly with illegal workers. Bring government agencies dealing with narcotics, counterfeiters and human smugglers under one roof. Illicit traders move these "products'' together in their networks; it makes no sense to combat them separately.

Above all, Naim says, spend less time on moralizing and more on addressing the economic realities. The driving force behind illicit trade is not low morals, he says. It is high profits.