The Asian Century: underbelly
5 Nov 2012|

Security and prosperity in the Asian Century have a dark underbelly: the region has witnessed a rapid and complex proliferation of organised criminal networks. They have had considerable impact on economic and social development, the quality of institutions and the security of all in the region, Australia included.

The government’s newly launched Asian Century White Paper understandably focuses on major power capabilities and interests. That’s where the ‘flashpoints’ are but organised and transnational crime—mentioned only in passing in the White Paper as a potential area for practical cooperation with international partners—is more corrosive than explosive. For Australia, the problems of crime in the region defy easy separation into direct, indirect, human and traditional security threats. Nevertheless, the physical, political and economic spaces in which criminal networks fester are gaps into which the region’s future may stumble.

Australia might consider three vectors by which organised crime undermines Asian stability and prosperity: through politics, resource allocation and community insecurity.

Politically, there are two main problems entangled with crime. First, the region’s violent separatists and terrorists thrive on and directly connect to criminal networks for sustenance, protection, movement and weapons. Many caches of home-made explosives—the types that have killed Australians—have been assembled and transported through the region, exploiting loopholes and relationships lubricated by organised crime. Staggering quantities of methamphetamine flowing from Myanmar support fighters in its restive borderlands. Extortion is a central fundraising activity for India’s Naxalite insurgents.

The second problem is more insidious and difficult to pin down. Asia’s model of economic growth has created super-wealthy plutocrats, who sit in government or have family who do so. The systemic fusion of political and economic power at the top creates a level of impunity under which organised crime can thrive. Most elite families are enjoying wealth creation without the need to engage in darker crimes, but those who do benefit from systems that protect them from prosecution.

For example, Myanmar’s opening up to the world offers hope that generals smuggling gems to the markets in Bangkok can become legitimate businessmen, but in the meantime they’re contributing to a black economy that squashes small enterprise and keeps politicians above the law. With politics penetrated by organised crime, decisions of state are vulnerable to perversion—contemporary examples include Cambodia’s destabilising land seizures and Pakistan’s incapacity for cooperation on high-level crime.

Many problems in resource allocation derive from this nexus of crime and politics. The White Paper maintains an interest in the region’s environmental issues; crime is one of the major problems in this area. Asian governments have rapidly established regulatory frameworks on many resource issues, but implementation is generally weak and kept that way by criminals, such as those who are ferociously logging Indonesia, Cambodia and Myanmar.

Beyond environmental issues, organised crime distorts resource allocation by sucking in talent, low-level officials and capital—then spitting out recidivists, small state revenues and investments based on ease of laundering rather than productivity. Asia produces the largest share of illicit flows in the world, estimated at around half a trillion dollars in 2008 and thought to be growing at faster rates than the licit economy.

Moving to the community level, organised crime cripples some communities in Asia and shackles many more. Stripping resources is one thing; threats, coercion and stagnant economies are just as pervasive. Officials and law enforcement agencies tied up with criminal interests blight the hope and prospects of many millions of Asians who do not yet feel ownership of ‘their’ century. Drug use epidemics, fatal counterfeit medicine and small arms proliferation are just some of the criminal industries producing disproportionate collateral damage among the poor.

The White Paper makes a broad brush recommendation (p.23):

Pursue practical cooperation and build local capability with regional partners across a range of issues such as terrorism, people smuggling, transnational crime, non-proliferation and disarmament, human rights, and disaster mitigation and management.

This is encouraging because it shows that the issue has at least been recognised as important. Given crime’s political entanglements in the region, real progress is going to require forging practical partnerships that address these issues from our partners’ perspectives and domestic interests. Only then will we be able to generate political will for substantive change rather than cosmetic efforts.

Jacob Townsend is an ASPI alumnus and is managing director of STATT, a group dedicated to mitigating transnational threats and expanding transnational opportunities.