Sunday, July 8, 2007



Crime The Hidden Pandemic

By Moisés Naím
July/August 2007

How crime is quietly becoming a global killer.

In the past five years, the bird flu epidemic claimed 186 victims worldwide. In the same period, another less-recognized but growing menace maimed or killed millions of people and produced massive economic losses. Like others, this dangerous pandemic ignores national borders and erupts in different places at different times. Inexplicably, it has surged in Boston and abated in Bogotá. Experts disagree about its precise causes and what explains its sudden eruptions. Unlike bird flu, it is not caused by a virus transmitted from one species to another; it is exclusively created and spread by people. I am talking about street crime.
The world is experiencing a crime pandemic. Crime rates are on the rise almost everywhere, and these statistics typically are distinct from the death and mayhem that comes with terrorism, civil war, or major conflict. The data reflect the booming number of civilians assaulted, robbed, or murdered by other civilians who live in the same city, often in the same neighborhood. Frequently, the victims are as poor as the criminals.

Crime has increased steadily for all the countries the United Nations measures, according to a 2003 U.N. report. Even in the United States, where crime rates famously declined since the mid-1990s, violent crime has risen sharply in the past two years. In 2005, violent crime had its largest annual increase in 15 years. The Police Executive Research Forum, a U.S. law enforcement association, reports that homicides increased in 71 percent of the American cities that were surveyed, robberies increased in 80 percent of them, and aggravated assaults with guns increased in 67 percent between 2004 and 2006. In Boston, murder rates are at an 11-year high. Crime is also a major problem in Britain; the European Union (EU) calls it a “high crime country.”

Of course, the United States and Europe are still relative paradises compared to other countries. In many, the situation has gotten so bad that frustrated citizens in Johannesburg, Mexico City, and even Milan have staged massive marches to protest the inability of their governments to protect them. And they are right. The streets of many cities have become more dangerous than war zones. Postcard-perfect Rio de Janeiro, for example, has become more dangerous than the bullet-riddled Gaza Strip. According to the Washington Post, 729 Palestinian and Israeli minors died as a result of violence and terrorism between 2002 and 2006. Yet in that same period, 1,857 minors were murdered in Rio.

And Brazil is not even at the top of the list. The world’s most murderous region is the Caribbean, followed by South and West Africa, and then South America. But the trend is global. Russia’s homicide rate is roughly 20 times higher than Western Europe’s. Rising crime rates are also reported throughout Asia.

In the poorest countries, the consequences of high crime rates are crippling. Crime increases the costs of doing business and makes countries less competitive. High crime rates can also scare away investors. “We were making good money in Colombia in the mid-90s,” the CEO of one multinational corporation told me. “But I decided that there was not enough money in the world to compensate for the despair that I felt during the many sleepless nights I spent worrying about my kidnapped colleagues there. We paid the ransom, got them back … and left the country.” The World Bank reckons that Latin America’s economic growth could be 8 percent higher if its crime rates dropped.

But the main reason to reduce crime rates is not to spur economic growth or attract foreign investors. The paramount purpose is to give citizens the right to walk their streets—or stay home—without fearing for their lives, a basic human expectation that millions around the world are increasingly losing.

Unfortunately, while the consequences of high crime rates are clear, their causes are far less so. Consider, for example, the notion that crime is the inevitable consequence of poverty. This idea is as common as it is wrong. There is no correlation between poverty and crime. Some poor countries have high crime rates; others don’t. Russia is far richer than Costa Rica, but its crime rates are substantially higher than those of Costa Rica. Some have suggested that crime rates may be explained by the strength of religious institutions, measured by church attendance and involvement in religious activities. Again, the statistical evidence isn’t there. Countries with high church attendance rates, such as Guatemala or the Philippines, for example, can also be plagued by murder.

So what drives up crime rates? Researchers can agree upon little beyond the general notion that crime soars in places where there is a combination of a high percentage of young males, ample drugs, and easy access to guns. Economic inequality and urbanization also accelerate crime rates (but experts disagree by how much). And, once criminal behavior takes root in a neighborhood or city, it takes a long time and an immense effort to reclaim the streets.

It is easy to dismiss growing crime rates as either a local problem or one that has been with us since time immemorial. But that would be a major mistake. Because, though we may have recently lost ground, the problem has the potential to be a far greater global nightmare. Consider China and India. They have growing populations of young males, growing levels of economic inequality, and rapid urbanization. And, though drugs and guns are still relatively hard to come by, they’re becoming easier to obtain every day. If these two nations become more like other poor countries in this regard, too, their crime rates could soar to unimagined levels. Suffice it to say, the crime pandemic would never be hidden from anyone again.

Moisés Naím is editor in chief of FOREIGN POLICY.

Crime and corruption: Enduring problems of post-Soviet development

Shelley, Louise I
Louise I. Shelley is a professor in the Department of Justice, Law, and Society and the School of International Service at American University and founder and director of the Transnational Crime and Corruption Center (TraCCC) there.

In 1994 Demokratizatsiya published its first issue on organized crime and corruption. The issue, a compendium of Russian and American authors, focused on the severity of the problem and its centrality to post-Soviet economic, political, and social development. At that time, it was a daring and unconventional approach to post-Soviet studies. The publication provoked a significant response, and many were startled by its conclusions. The editors of Demokratizatsiya concluded that more attention needed to be paid to crime and corruption because few in the post-Soviet studies community or the policy community understood the significance of those issues. In our analyses we identified it as a security issue, a human rights problem, and a development issue. The regional focus of the journal has taken in the diversification of the crime and corruption problem, which has grown over the decade.

Throughout the rest of the 1990s, Demokratizatsiya published much on those issues and addressed not only domestic problems of crime and corruption but Western complicity. The corruption of foreign aid to Russia and the former Soviet states became an important recurring theme in our issues. The pioneering work of Janine Wedel on corruption and collusion in foreign assistance was published in 1996. The ideas first published in Demokratizatsiya in 1996 were recognized in 2001 by the prestigious Grohmeyer prize for major contributions to humanity.

Demokratizatsiya's critique of the crime and corruption issue was not confined to Russia. Works identified the criminal-political nexus in Ukraine, since affirmed by the indictment of former prime minister Pavel Lazarenko in Switzerland for money laundering and the ongoing criminal investigation of his activities in the United States. Essays on Kazakhstan addressed the problem of corruption, particularly that linked to the energy sector.

Human trafficking out of the former Soviet Union and nuclear smuggling, issues of increasing concern were addressed in Demokratizatsiya before they became so topical. The multiple consequences of these crimes were presented in the multidisciplinary fashion that characterizes the journal.

The controversial position that Demokratizatsiya took in exposing the crime issue in the mid-1990s required courage on the part of our journal and the Helen Dwight Reid Educational Foundation, which publishes the journal. But the leadership of Heldref insisted that it was the responsibility of a foundation to publish controversial works that might not otherwise reach the public and policy makers.

In 2002, it is hard to believe that Demokratizatsiya's attention to the issues of crime and corruption took courage and aroused controversy. It is now the common belief that corruption is a major impediment to Russian development, that significant portions of foreign aid, World Bank loans, and IMF financial transfers never reached their targets and were diverted internally or transferred to offshore accounts. Anticorruption programs are now a major focus of the United States, the European Union, and other donors to Russia and other states of the former Soviet Union.

Organized crime and corruption have not been static phenomena. Russian organized crime and corruption are much more global than a decade ago. The problem of capital flight and international money laundering continues unabated, but the problem is cumulative. The outflows of capital now total in the hundreds of billions, denying Russia the investment capital it needs. The money lost through these outflows far exceeds the foreign aid committed to the region.

The major changes in the problem can be identified as follows:

Russia has high rates of homicide that are now more than twenty times those in Western Europe and approximately three times the rates recorded in the United States. The rates more closely resemble those of a country in civil war or in conflict than those of a country ten years into a transition.

Corruption and organized crime are globalized. Russian organized crime is active in Europe, Africa, Asia, and North and South America.

Massive money laundering is more than a problem of capital flight. It allows Russian and foreign organized crime to flourish. In some cases, it is tied to terrorist funding.

Crime and corruption differ significantly in diverse regions of Russia.


Many expected the Soviet Union to explode in violent conflict. Although there have been many regional conflicts, including the ongoing war in Chechnya, widespread political violence has not occurred. Instead, in Russia there has been an unprecedented rise in interpersonal violence, particularly homicide. This suggests that the violence is inner directed rather than outer directed and may be a substitute for more overt civil conflict.

The present homicide rate in Russia is approximately 22 per 100,000, far exceeding that recorded in the Soviet period. The vast majority of homicide cases are those connected with family members or known individuals. But homicide numbers have also increased because of the contract killings associated with organized crime groups. Contract killings are most prevalent in large urban areas and in regions of Russia with valuable enterprises and natural resources. The enormous increase in homicides is a consequence of such factors as the greater availability of arms, the reduced quality of emergency medical care, and the increased familial tensions resulting from high unemployment and the absence of social benefits. The armed conflict in the Chechen region may also contribute to the rise in violence in other regions of the country.

The homicide rate is approximately half that found in countries wracked by civil war, such as Colombia. Although Russia's violent conflict is confined to one part of the country, its patterns of homicide more closely resemble those of countries with serious internal conflicts. Its homicide picture diverges significantly from those in countries such as Ukraine that have much lower rates of homicide but no armed conflict within its borders. The divergence suggests that there are great differences in the processes of transformation in these regions.

Globalized Corruption

The globalization of Russian corruption has tarnished Russia's international image and undermined its state capacity. Capital flight and money laundering deprived Russia of the possibility of investing in its infrastructure, paying salaries, and maintaining the quality of its institutions and social services. Russia's billions could not be laundered without the complicity of many Western experts in the banking sector, the legal profession, and the accounting professions. For this reason, the offshore entities of Enron closely resemble those of Gazprom and Itera.

Russia's corruption is not confined by the borders of Russia. The recent bribe payers index of Transparency International put Russia in twentieth place among the top bribe payers. South Africa identified Russians as major "corrupters" in its region. Russians use corruption to internationalize their businesses and buy assets abroad.

Through front companies, trust agreements, and other vehicles to hide wealth, the corrupt and criminalized elite of the Soviet successor states have been the major beneficiaries of the globalized economy. The most deleterious aspect of this globalized corruption is that great portions of Russia's assets are now in offshore havens, outside the reach of Russians and are so successfully hidden that they cannot be recovered.

Globalized corruption has led to massive asset stripping from Russia, Ukraine, and Kazakhstan, and to a lesser degree from the smaller successor states. The hundreds of millions of dollars tied to Pavel Lazarenko, the former prime minister of Ukraine, and the enormous sums tied to President Nazarbayev of Kazakhstan in Switzerland suggest that there is a common trend in the former Soviet states. Elites grab the resources and the ordinary citizens lack the capacity to address the looting of their countries. Instead national resources become part of the globalized economy.

Post-Soviet Organized Crime

Post-Soviet organized criminals are now major actors in international organized crime. They have acquired the distinction because of the diversity of their activities, the global reach of their operations, their links with other organized crime groups, and the sheer volume of their activity. Their involvement in weapons trade internationally and in massive money laundering has made them threats to national security on a regional and international level.

The audacity of their crimes also makes their criminality receive great visibility. The recent indictment of Alimzhan Tokhtakhounov, an Uzbek member of post-Soviet organized crime, for fixing the Olympics is indicative of this high profile crime. Tokhtakhounov, even though he never set foot in the United States, was indicted in federal court in Salt Lake City for influencing Olympic skating judges to favor the French team. Residing in Italy because of his expulsion from France, he sought to acquire a coveted French residence permit to live in his expensive Paris apartment by currying favor with the French. His involvement with the Olympic fix was disclosed by wiretaps placed on his phones in Italy at the behest of the FBI.

The case highlights several of the most important features of post-Soviet organized crime. First, the crime is so transnational that criminals can be indicted for crimes committed outside of the former Soviet states. Second, the offenses are committed in two continents simultaneously. Third, undercover policing techniques requiring cooperation between American and Italian law enforcement are needed to address this crime.

Post-Soviet organized crime groups engage in a full range of illicit activity that includes human trafficking, drugs, and weapons. In the Far East, they also trade in Russia's valuable natural resources such as fish and timber. Their crime partners are the organized criminals of Japan, the Koreas, China, and Vietnam.

Central Asian organized crime groups are major players in the international drug trade because of their proximity to the massive drug production of Afghanistan. They are also key actors in human trafficking between the Indian subcontinent and Afghanistan and western Europe. Many of these individuals are trafficked through Russia and Ukraine en route to their final destinations.

Organized crime groups with greater proximity to Europe are involved in all types of illicit activity and money laundering in that region. Recent arrests in Italy reveal illicit funds in the hundreds of millions of dollars and networks that stretch across western Europe.

The organized crime links are evident throughout the world. In Florida, a Russian organized criminal linked drug traffickers from Latin America with corrupt military from Russia to procure helicopters and submarines for the Cali cartel. A submarine under construction in Colombia for drug traffickers was being built with the assistance of Russian-speaking engineers. These are only a couple examples of the extensive links now evident between Ukrainian and Russian criminals and the Colombian drug cartels.


Ten years after the collapse of the Soviet Union, crime and corruption remain enduring problems for the post-Soviet states. Although they were once seen as peripheral to development, the post-Soviet experience has dramatically illustrated that these problems are fundamental to the course of development. Moreover, understanding the dynamics of the crime problem can provide a key diagnostic tool in assessing social and political stability. The fact that terrorism thrives in regions with rampant corruption makes the problem all the more salient in the contemporary environment.

The rise of the oligarchs and their control of such a significant share of the Russian and Ukrainian economies have eclipsed some of the economic significance of organized crime. But the continued importance of contract killings in key industrial sectors suggests that important operative links endure between the industrial oligarchs and organized crime.

The centrality of the crime and corruption issue was evident to citizens of the successor states before the West was sensitized to these problems. This gap in perceptions was central to the failure to develop effective assistance programs for the Soviet successor states. Demokratizatsiya, in helping to identify the importance of crime and corruption for a Western audience, helped move the debate, and we hope that it contributed to development strategies more attuned to the needs and concerns of the citizens of the former USSR. But often this change in tactics came too late to address the now deeply embedded problems of organized crime and corruption.

Copyright HELDREF PUBLICATIONS Winter 2003
Provided by ProQuest Information and Learning Company. All rights Reserved

Russian investigators at the site of the assassination of anti-corruption official Andrei Kozlov. Photograph: Reuters

Russian anti-corruption official shot dead

Michael Mainville in Moscow
Thursday September 14, 2006
The Guardian

The official in charge of cleaning up Russia's crime-ridden banking system died today after being ambushed by gunmen who shot him in the head and chest.

Central Bank first deputy chairman Andrei Kozlov, 41, had shut down dozens of banks accused of money laundering and other crimes. Russian media reported that two gunmen had been lying in wait for Mr Kozlov last night outside a Moscow sports arena where Central Bank employees were playing football.
They opened fire when Kozlov emerged, killing his bodyguard and leaving him badly wounded. Kozlov was rushed to a nearby hospital and underwent emergency surgery but died in the early hours.

Though not as common as in the turbulent 90s, contract killings of prominent figures still occur frequently in Russia and officials said they had little doubt Mr Kozlov's murder was connected with his work.

Finance minister Alexei Kudrin said in a statement that Mr Kozlov had "repeatedly infringed upon the interests of dishonest financiers" and praised him as "a very courageous and honest person who was at the forefront of the struggle with financial crime".

Anatoly Chubais, the head of Russia's electricity monopoly who was himself targeted in an assassination attempt last year, called the killing "a blatant challenge to the entire Russian government system".

"This is a case when the authorities must respond in a tough manner, promptly and mercilessly," Mr Chubais said in a statement. "[Kozlov] was one of the most professional people in the entire Russian banking sector."

A meeting of the Russian cabinet today began with a moment of silence in Mr Kozlov's memory, after which interior minister Rashid Nurgaliyev promised an investigation.

Since becoming first deputy chairman at the Central Bank four years ago, Mr Kozlov had made many enemies with an ambitious scheme to fight criminality and increase transparency in the banking system. Many of Russia's 1,200 banks are used by criminal organizations for money laundering and other financial crimes. Interfax reported that Mr Kozlov's department has withdrawn the licences of 44 banks so far this year.

Mr Kozlov was also in charge of introducing a deposit insurance scheme aimed at restoring the public's faith in the banking system after thousands lost their life savings during Russia's 1998 financial crisis. He had refused to allow dozens of suspicious banks to take part in the scheme. At a banking forum in the southern city of Sochi last week, Mr Kozlov said the Central Bank was considering introducing measures that would ban bankers found guilty of money laundering from opening new financial institutions.

The last comparable high-profile killing of a Russian official occurred in October 2002 when Valentin Tsvetkov, the governor of the far eastern Magadan region, was gunned down as he walked with this wife and bodyguard down a popular shopping street. Tsvetkov was said to have made enemies with his attempts to impose more control on the granting of lucrative fishing licences. Two suspects in his killing were arrested earlier this year in Spain.

Mr Kozlov began his career at what was then the Soviet central bank at the age of 24. He rose swiftly in the ranks and became a deputy chairman in 1997. He left the bank for two years to work in the private sector before rejoining it in 2002. He is survived by his wife and three children.

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