The means to combat the illegal economy already exist, but curbing global money laundering demands co-operative international action by politicians that is unlikely to occur, according to economist and author Loretta Napoleoni.
Dr Napoleoni (pictured), who spoke to a seminar organised by the Flinders Law School today, is an expert on the financial aspects of transnational crime and terrorism and acts as an adviser to European governments. She has also written on the economic rise of China and the transformation of the world economy by globalisation.
Dr Napoleoni said that the ‘black’ economy comprises a sophisticated global network with a value she estimates to be in the trillions of dollars.
“It is highly integrated and is taking place parallel with, and feeding into, the legal economy,” she said.
So far, she says she has seen little evidence of willingness to initiate the co-ordinated international legislative response needed to halt the illegal movement of money.
“Each country pursues its own interests and is setting up its own anti-money laundering legislation – because of that, crime is winning and I think it will continue to win,” Dr Napoleoni said.
“Perhaps the only solution is to have a sort of business ethic, a culture where people don’t do such things, but this would require a very different approach to the current one.
“In Italy, for example, there is now a policy to pardon tax evaders. In reality, this is rewarding people who have broken the law, so we are clearly sending the wrong message to the community.”
Dr Napoleoni said significant steps to curtail the illegal movement of cash could be taken by rolling back deregulation.
“Everyone realises that this is exactly what we need, but nobody wants to do it; so again, it all comes back to politics.”
She said that most people continue to underrate the impact of globalisation on their lives.
“It’s complex to understand because most people live their lives at a local level, but definitely for crime, terrorism and the illegal economy, globalisation has been an absolute blessing.”