Like other key issues, political economy which extremist movements feed on is overshadowed in research studies on extremism and terrorism, with much attention attached to ideology, politics, security and implications of the ubiquity of such groups and associated activities at the regional and global levels. The issue is critically important as manifested by the keen interest evinced by ISIS in creating a preliminary structure for an extremist state and involvement in economic operations with various parties. Several international reports have also revealed the glaringly flagrant involvement of Hezbollah, Lebanese Terrorist Group, in illicit economic activities, such as drug trafficking and diamond smuggling through Latin America and West Africa. Equally important, East Africa and the Horn of Africa were not spared; this region has suffered for decades from many threats, including wars between states, civil wars, and structural divisions of states, causing the spread of terrorist and separatist movements. The most dangerous of such movements are Al-Shabaab in Somalia and elsewhere, the Lord’s Resistance Army (LRA) in Uganda, and AHLU SUNNAH WAL JAMAAH in Mozambique. With the increasingly growing security risks across the region, they still receive global attention given their natural resources international position on the trade routes between Asia, West and Africa. Such reasons created a breeding ground for terrorist organizations, smuggling gangs and illicit trade.
The Report shows the overlapping areas between terrorist and criminal groups across the region. The areas between terrorists and smugglers are much overlapping; it also explains how such a breeding ground has caused smuggling and illicit economic activities snowball into reality, forming a large shadow economy in most countries of the region with notoriously rampant corruption, poor legal and political accountability, porous borders and poor port controls. The Report also shows the involvement of various terrorist groups in ivory smuggling tobacco and weapons across the region.
The Report provides a concept definition that overlaps between violent extremism and illicit trade. Roberts defines illicit trade as activities that involve the exchange of goods and services between individuals or organizations where either the commodity or the unregulated manner of the exchange is deemed illegal in a given jurisdiction.
The Organisation for Economic Cooperation and Development (OECD) has identified prohibited goods or services, such as illegal narcotics, illicit exchange of intellectual property rights or arms, the sale of goods outside of their legally designated destination market for the purpose of avoiding local duties, such as illicit tobacco and the sale of stolen goods, such as electronics. Much of illicit trade is controlled by mafia networks and local gangs in the developed world. With illicit trade coming into play, the Middle East, Asia and Africa are infamously swarming with extremist groups, such as Hezbollah, Al-Qaeda and ISIS. Given the large profits offered by illicit trade juggled with in the highly orchestrated operations, more entities are allured into making predicable profits of lower risks vis-à-vis the awkward reliance on hostage-taking for ransom, which was a common method of financing terrorist groups. The volume of illicit trade globally has reached $2.2 trillion (3%) of the total global product, which is the size of the losses of national economies.
Illicit trade sneaks into regions in different manifestations, triggered by the capabilities and opportunities made available and the countermeasures made by governments and communities to clamp down on such practices. Reality reveals the relative complexity of terrorist groups and gangs involved in illicit trade. Smuggling activities exempt terrorist groups from more severe judicial penalties if their members are arrested on smuggling charges only. Globalization has also contributed to such complexity. For instance, Afghani opium is distributed to European markets through a chain of criminal networks made up of Afghani, Iranian, Kurdish, Turkish and Albanian traffickers. The dark web has also greatly expanded the possibilities for collaborative illicit activity.
Opportunities are the relative abundance of valuable products or market demand and can be usefully subdivided into two categories: source- and end-market opportunities. Finally, the response element refers to the ability of civil society and government agencies to deal positively with those involved in these activities and combat them, through legal procedures, border control, transparency and governance programs, and anti-corruption. Based on these criteria, the report studies the features of the illegal trade market in East Africa, and the contribution of terrorist groups to it. One more determinant of illicit trade is the resilience of civic institutions to the incursions of illicit actors and the ability of relevant authorities to attach risk to illegal activity. State countermeasures which may increase risk for illicit traders include border controls, transparency measures, anti-corruption programmes, inter-state agency cooperation and criminal sentencing.
You can read more about this topic in Issue 32 of International Reports.