The world has been so focused on the pandemic and its economic fallout that concerns regarding the shadow economy have fallen to the wayside. But although they may not be front and centre, hidden players are still lurking in the shadows and waiting to move on the desperate.
SHADOW ORGANISATIONS SEEK NEW OPPORTUNITIES
Global lockdown restrictions may have damaged the criminal underworld just as much as legitimate businesses, but they are still alive and kicking, and looking for a way to rebuild.
The Italian mafia is a case in point: as lockdown restrictions brought small and medium businesses to their knees, the mafia was quick to move in and offer these businesses the monetary salvation they so desperately required – although at a price, of course. The aim of these ‘bailouts’ was to capitalise on the expected assistance scheduled to begin flowing to these companies towards the latter part of 2021, as part of the €1.8 trillion economic recovery programme.
Maurizio Vallone, one of the top organised crime investigators in Italy, noted, “The mafia has been choosing the companies that are best-placed to take part in recovery fund tenders, especially in the health and infrastructure sectors where a great deal of money will be spent… It will try to take everything. We have to make sure they don’t get even one euro.”
However, Europe is not the only region to fall victim to underground activity. The Japanese Cybercrime Control Center also exposed dark web activity taking place within the country that was spreading rumours of covid-induced pneumonia. Scammers were then offering to send special masks to email recipients, encouraging individuals to download an app from a link provided in the email which would then leave their phones vulnerable to hackers looking to steal credit card details.
Latin America has likewise been engaged in a long-standing battle against gang and organised crime-related activities, and now faces the threat of underworld members taking advantage of government leadership vacuities to play up their roles as pretend wardens of neglected citizens in marginalized neighbourhoods. One correspondent from the region warned, “From setting curfews and enforcing them to handing out boxes of food and face masks, the criminal underworld – long thriving here – is positioning itself to come out of this pandemic with increased control over territory, and more deeply entrenched loyalty from locals.”
However, while the pandemic has created new opportunities for the underworld to enhance its power, it comes as no news that organised crime plays a significant role in economies around the world, penetrating sectors ranging from construction, delivery, food and private garbage collection to security, and costing consumers globally billions and even trillions of dollars each year. Organised crime raises exorbitant amounts of money from its illicit activities, a significant portion of which then flows into the legal economy concealed as investments, even as regulators scramble to introduce stricter policies. In 2009, the United Nations Office on Drugs and Crime (UNODC) estimated that organised crime’s worldwide proceeds amounted to a staggering $2.1 trillion, of which $1.6 trillion was reinvested in the legal economy.
But although these shadow organizations may often contribute the legitimate economy, one cannot simply ignore the negatives of their activities on the legitimate economy, such as: