Nexus between organized crime and terrorism

I went to an interesting talk tonight on the nexus between organized crime and terrorism. For me, the most interesting part was a specific logic outlined by Georgetown Professor Vanda Felbab-Brown on how terrorist, insurgent, or other "belligerent" groups interact with illicit economies. Prof. Felbab-Brown has a book coming out soon, "Shooting Up", which I assume contains these arguments in full.

Prof. Felbab-Brown argues that belligerents derive political benefits from controlling illicit economies. The local population that survives on the illicit economy owes their economic wellbeing to the belligerent group (
a term that includes terrorists, insurgents, gangs, etc.). The government, whether its trying to eliminate poppies in Afghanistan, trying to shut down smuggling networks in the Sahara, or trying to eliminate coca in Colombia, is trying to shut down the economies that many ordinary people's lives depend on. Thus, a belligerent group's motivations for controlling an illicit economy is not just that they are greedy (although they may be), but the desire for control over illicit economies can be to gain political power.

This is the situation in Niger and Mali regarding the Tuareg rebellion. U.S. official policy seems to be oriented towards shutting down smuggling networks that aid terrorists. However, as former ICG anthropologist Mike McGovern argues, shutting down smuggling networks with the goal of denying terrorist networks support and sanctuary, while not replacing them with legitimate economic opportunities, could backfire and “threaten to turn people towards more extreme politics."

Felbab-Brown also made the point that labor-intensive illicit economies give the belligerent groups greater benefits, because, she argued, more people are dependent on the illicit economy for survival. Thus more people are indirectly dependent on whichever insurgent or terrorist group that controls the illicit economy for survival. I didn't get a chance to ask her whether a situation like Niger would give broader legitimacy to belligerents - in Niger, the illicit economy is based on smuggling, which is not labor-intensive, however because of the lack of other economic opportunities and because of the key role smuggling has in the economy (makes many other activities affordable, like eating), a larger segment of the population is dependent on the illicit economy than might otherwise be the case with most smuggling networks.

Felbab-Brown argued that the state of the legal economy is directly related to the legitimacy of the government in power. It'd follow that the state of the illicit economy, if controlled by a belligerent group, is also directly related the legitimacy of that belligerent group. This is because, just like governments create markets by enforcing property laws, facilitating information flows, etc., belligerent groups police illicit markets, protecting them from the state and from rival groups.

Felbab-Brown closed her talk with the observation that no terrorist or insurgent group has ever been defeated by the government targeting the illicit economy it relies on to deny it funds. Instead it can backfire: Econ 101 tells us that targeting supply while ignoring demand will cause prices to rise, an observable effect of the War on Drugs (tm). This makes illicit economic activity more profitable for the belligerent group controlling the economy. In economies that rely on smuggling, it would also make life harder for the population that government policy is supposed to win over.

To apply this reasoning to the Tuareg situation, targeting smugglers in Mali and Niger might restrict supply for smuggled goods, but would not shrink the demand. Prices would therefore go up, and with them one would expect smugglers' profits to rise as well. However the population that depends on smuggled goods to survive would see their wallets pinched as a result of government policy. They would then be alienated from the government, the exact opposite of the intended result.

During the Q&A session, I asked her a question on how to distinguish between scenarios in which insurgent/terrorist groups engage in smuggling themselves, and individuals associated with insurgent/terrorist groups profit off of smuggling. I think this question goes to the heart of Niger's accusations against the MNJ that they are just smugglers and bandits, as well as MNJ accusations that the Nigerien Army is itself a criminal organization engaged in smuggling. To my delight, Felbab-Brown's answer was basically: Kalyvas! She said analysts should disassociate between the stated goals of the organization and the motivations of individual members, which might include profit, and also revenge, honor, hate, or whatever else.

All in all it was a good talk. Plus there was free pizza!


Kotare said...

This is an excellent post, Adrian.

There is an interesting correlation between the Marxist-Leninist idea of establishing underground governments, which usurps the legitimacy of the state (as practiced by the Chinese Communist Party, the Vietcong in South Vietnam, and Sinn Fein / Provisional IRA in Ireland) and the point you make about insurgent and crime groups controlling and encouraging the illegal economy.

Adrian said...

Thanks Kotare.

So you are saying that, irrespective of the political benefits of protecting illegal economies, some groups may engage in illegal economic activity just because it's illegal?

GrandMasta Splash said...

Are you her agent? How much do you get paid to advertise the book?

Adrian said...

I get paid in free pizza.

Kotare said...

Not quite - like establishing an alternative government, controlling a black economy (from which large numbers of the population make a living) may be a way of establishing political legitmacy for the insurgent group or criminal gang, and undermining the authority, such as it is, of the government.

subadei said...

"establishing political legitmacy for the insurgent group or criminal gang, and undermining the authority, such as it is, of the government."

If I may add to Peter's comment:

We see it in our own country with gangs where control of the black economy has produced what is essentially a micro-culture (or counter-culture, I suppose) where the system of local social values is, at times, completely the opposite of those of the mainstream society.

Great post, Adrian.

Adrian said...

"controlling a black economy (from which large numbers of the population make a living) may be a way of establishing political legitimacy for the insurgent group or criminal gang"

And the government contributes to the legitimacy of the insurgent group by attempting to destroy the black economy, and by extension the livelihoods of much of the population. I wonder if that applies to US anti-drug efforts domestically as well.

Kotare said...

This is why targeting poppy cultivation in Afghanistan plays right into the hands of the Taliban. A number of people have suggested legalizing poppy cultivation - to supply raw ingredients for legitimate painkillers - but this kind of sensible thinking seems to fall on deaf ears.