The global illicit economy in 2022 A year of division

The world is a vastly different place from when the global health crisis caused by COVID‑19 first began. As society slowly returned to a state of what has been defined as ‘permacrisis’,¹ regaining a holding pattern of instability and insecurity, the latent political tensions, environmental crises and economic stresses that had taken a backseat to the prerogative of addressing the health emergency resurfaced. These revealed a more fractured world than before and created the perfect conditions for illicit economies to flourish. Long-held (Western) assumptions about the inviolability of sovereign territory, democracy and economic stability were shaken. Organized crime adapted to and was shaped by these divisions.

The year 2022 also marked a pivotal point in our demographic history, when the global population reached 8 billion.² Accompanying this milestone, glaring socio-economic inequalities, conflict and instability driving illicit flows came to the fore. In February, Russia invaded Ukraine – the largest land war in Europe since 1945 – spurring a humanitarian crisis, including the largest refugee migration in Europe since World War II, and the most extensive sanctions regime in almost a century.³ The conflict renewed schisms associated with the Cold War and disrupted global supply chains, exacerbating vulnerabilities and driving illicit trade of various products as people sought to meet their basic needs. The war in Ukraine also continues to draw an influx of arms, some of illicit provenance.

Elsewhere, war and instability in countries like South Sudan, Yemen and Syria rumbled on unresolved, contributing to a deteriorating humanitarian situation and trafficking of a broad spectrum of commodities, from weapons to consumer goods to people. Irregular migration flows fuelled by these conflicts gave rise to global debates on the unequal treatment of migrants and refugees, further sowing divisions between Europe and its neighbours.

Violence and tensions continued along the Pakistan–Afghanistan border and in the Azerbaijan–Armenian conflict, undermining stability and increasing the porosity of borders, which served to facilitate cross-border flows.⁴ In Africa, a peace deal was signed marking the end of the two-year-long Ethiopia–Tigray conflict that saw the displacement of millions of people.⁵ While in Haiti, an escalation in gang violence triggered thousands to flee the country.⁶ Globally, 2022 saw over 100 million refugees and internally displaced people – 13 million more than the previous year⁷ – a significant portion of whom turned to smugglers to help escape conflict and instability, and who were put at risk of exploitation.

The conflict in Europe also sent shockwaves around the world as energy and food costs soared, and diplomatic alliances were tested. Against the commodity shock, global inflation in 2022 climbed to its highest rates since the 1980s and stubbornly persisted, partly linked to Russian hydrocarbon exports being ‘weaponized’ and to rising food prices.⁸ Oil prices rose globally from US$76 a barrel in January to over US$110 in March, with OPEC+ countries deciding to limit crude oil production, contributing to a growing geopolitical East–West divide and fuelling the illicit trade in non-renewable resources.⁹ Criminal actors along oil and gas supply chains took advantage of consumers’ exposed dependence caused by reduced commodity supplies and price discrepancies between different countries by smuggling oil, exacerbating fuel shortages and heightening economic disparities.

Natural-resource shortages also had a damaging impact on our climate, as countries turned their backs on their environmental pledges to reduce greenhouse gas emissions and instead prioritized their immediate energy needs. April saw deforestation rates in Brazil’s Amazon rainforest surging to unprecedented levels, with allegations of the government promoting it.¹⁰ During the first seven months of the conflict in Ukraine, the fighting was estimated to have released around 100 million tonnes of carbon into the atmosphere, with the explosion of Nord Stream 1 and 2 in September leading to the biggest ever point source release of methane.¹¹ With greater importance placed on meeting energy demands, less attention was given to curbing environmental crimes, with criminals involved in destructive activities such as waste trafficking and the illicit trade in ozone-depleting substances carrying on unabated, jeopardizing human health and disrupting the ecological balance. The dizzying acceleration of global warming was seen violently in all corners of the world, with the arrival of extreme weather events, including the devastating floods in Pakistan in June. This was exacerbated by rampant illegal logging,¹² leaving millions displaced, compounding Pakistan’s economic and political struggles.¹³ Heatwaves in Asia, Europe, Australia, the US and South America, as well as flooding and increased droughts in Africa, and rural-to-urban climate migration, have placed a strain on key health and agricultural sectors and threatened livelihoods.

Sudanese pro-democracy activists set tyres alight during demonstrations in Khartoum.

Yet the ability to tackle these challenges varied across nations. In November, the 27th meeting of the Conference of the Parties to the UN Framework Convention on Climate Change, held in Egypt, highlighted the unbalanced effects of the global climate crisis on the most vulnerable in developing countries,¹⁴ an imbalance that reinforces discord between low- and middle-income countries and economic powerhouses.

Amid these troubling dynamics and in response to inflation, central bank rates were increased,¹⁵ making it even more difficult for many households to meet their basic needs, fomenting social unrest, impoverishing millions around the world and contributing to rising rates of hunger and malnutrition. In 2022, the severity of acute food insecurity increased and it is estimated that over a quarter of a billion people were food insecure.¹⁶ The difficulty acquiring basic necessities fuelled organized crime, as people turned to the black market to procure essential supplies at lower prices, or to secure alternative livelihoods.

In the realm of governance, countries all over the world saw shifts in state politics and policies. From questions of the integrity of elected officials to growing government repression, in many cases, states’ ability to tackle economic crises and social fragmentation in their countries dwindled, highlighting the link between malpractice among those who hold public office and the organized criminality that this Index identifies. Corruption continues to pose a systemic threat worldwide and an obstacle to states’ capacity for resilience to organized crime, while serving as a vital aid to organized criminal groups.¹⁷

Social discontent with governments was evident throughout 2022 and demonstrations were frequently met with harsh crackdowns on civil society and activists. For example, the death of Mahsa Amini in Iran in September, because of her choice of dress, sparked widespread social unrest in the country and unearthed an underlying dissatisfaction with the ultra-conservative authorities. These protests were responded to with extensive internet blackouts and nationwide restrictions on social media usage, while protestors themselves faced tear gassing and even public execution.¹⁸ In China, following an unpopular three-year COVID lockdown that was eventually lifted after widespread outcries, reports came out of regular arrests of peaceful protesters.¹⁹ Growing government repression undermined countries’ social cohesion and ability to effectively respond to organized crime, particularly as non-state actors were increasingly prevented from keeping governments in check and from supporting resilience measures.

Taking advantage of these crises, and often by harnessing technological tools, criminals seized opportunities for furthering their illicit gains. In an increasingly digitized world, cyberattacks reportedly rose by 38% globally in 2022 against the previous year as hackers and ransomware gangs exploited normalization of remote working.²⁰ In May, across Europe, authorities uncovered a drug trafficking ring by tapping into communications on Sky ECC, a messaging app described as ‘WhatsApp for criminals’.²¹ In the United States, FTX, one of the largest digital currency-exchange platforms for cryptocurrencies, collapsed in November after its CEO was arrested and charged with security fraud and money laundering, causing over US$11 billion in damages to consumers and rendering the future of cryptocurrencies uncertain.²²

As 2022 saw organized crime take advantage of disparities and rifts between countries, the global illicit economy posed a collective threat. Amid these dynamics, it has become essential to understand how organized crime operates and its impact on society so as to better help global policymakers and practitioners formulate successful responses. This Index report provides detailed insight into how criminality reacts and adapts to its environment and, importantly, sheds light on where response frameworks have been successful and where they have fallen short. In this way, the Index contributes to the growing evidence base that can inform analysis of and future action against organized crime.

Figure 1.1

Notable events in 2022 that shaped global dynamics and organized crime

Key findings

The Global Organized Crime Index allows users to analyze, compare and contrast a range of indicators by country, region and continent. In compiling these indicators, several key findings, divided into three broad categories – meta or cross-cutting findings, thematic and geographic findings – emerged. With the extensive dataset that the tool provides, a number of notable themes arise, with those outlined below being only a small selection. These findings serve to underscore the ubiquitousness of organized crime and shed light on the numbers affected by criminality, the scale and reach of criminal markets and levels of resilience.

Figure 1.2

Key finding by group

Meta findings

Finding 1 The gap between criminality and resilience is widening

83% of the global population now live in countries with high criminality – up from 79% in 2021. While global resilience has largely remained at 2020 levels, criminality has continued to grow at a staggering rate in response to intensifying political, social, economic and security challenges, signifying the difficulties involved in addressing the phenomenon.

The number of people living in conditions of low resilience to organized crime globally has declined significantly: now 62% of the world’s population live in countries with low resilience, compared to 79.4% in 2021. The reason for this major shift, however, is not a momentous resurgence of resilience globally but rather a slightly improved score for a single country – China. In 2021, China was assessed as falling within the low resilience band, only 0.04 points below the 5.5 out of 10 threshold. In this second version of the Index, China’s resilience score has marginally increased by 0.21 points, enough however to move it into the high resilience band. The modest improvement came in light of China’s adoption of the country’s first Anti-Organized Crime Law and an advance in countering money laundering, among others. With a population of 1.4 billion, China’s slightly improved resilience score thus calls for nuanced interpretation of the results. While more people today live in countries characterized as having high resilience, when comparing global resilience to the rise in the pervasiveness of criminality, the data shows that responses have failed to meet the organized crime threat.

Figure 1.3

Vulnerability classifications

Finding 2 Democracies continue to have higher levels of resilience

The results of the 2023 Index show that countries categorized as full democracies by the Economist Intelligence Unit continue to exhibit higher levels of resilience to organized crime than authoritarian regimes. Good governance practices that are open, transparent, embedded in the rule of law and encourage active engagement from citizens lay the groundwork on which to build both state and non-state responses to criminal threats.

Indeed, democracies were shown to better withstand organized crime on average, with the correlation between regime type and resilience slightly increasing over the past two years. This relationship serves to highlight the need for coordination among the pillars of democratic societies to better understand the criminal threats faced and develop even more effective responses.

Figure 1.4

Resilience by regime type

Finding 3 Conflict exacerbates vulnerability to organized crime

Conditions of conflict and fragility have long been flagged as factors contributing to criminality. The data of this second iteration of the Index shows that conflict zones face increased vulnerability to organized crime. The analysis reveals that the more affected by conflict a country is, the higher the likelihood of it experiencing reduced levels of resilience to organized crime. When war efforts top a state’s agenda, for example, resources are redirected, leaving institutions weakened. The breakdown of governance structures, weakened law enforcement and limited access to basic services provide fertile ground for criminal groups to operate.

The 2023 Index data underscores these notions: many of the most crime-affected countries, including Afghanistan, Iraq, Myanmar, Ethiopia, and most recently Ukraine, have been mired in conflict and instability over the past decades. The Russian invasion of Ukraine was certainly among the main sources of fracture in 2022 and, as a result, levels of criminality in Ukraine have significantly increased. Worse still, the effect of a prolonged war could be devastating on many levels, with repercussions ranging from greater access to weapon stockpiles to increased poverty, unemployment and subsequent vulnerability to exploitation.

Figure 1.5

Conflict vs criminality

Thematic findings

Finding 4 Financial crime is the most pervasive criminal market

The category of financial crimes was not included as a criminal market in the 2021 Index. The reporting of levels financial crimes through the Index expert review process resulted in financial crimes being identified as the most pervasive of all crime types measured in 2023. As this is the first time the Index has attempted to measure financial crimes, there is no baseline to compare the 2023 results against. However, the available data and expert opinion, including input on the results of the 2021 Index, suggests that financial crimes have indeed expanded significantly over a short period of time.

Ranging from fraud to embezzlement, financial crimes take on many forms, allowing organized criminals to infiltrate the formal economic and financial systems of a country. The very breadth of criminality typologies included under the financial crimes definition affirms the ubiquity of this market. While often considered ‘victimless’, financial crimes are in many cases linked to violent crime and have the ability to significantly undermine a country’s social and economic structures. Today, with the rapid innovation of digital technologies, financial crimes can be carried out at the click of a button from the other side of the world, highlighting the market’s transnational impact.

Financial crimes displaced human trafficking as the most pervasive illicit economy in 2022, but that is not to say that human trafficking has declined – the Index results show that human trafficking has in fact increased since 2020, the first year under study. The continued growth of human trafficking serves as a sobering reminder of this market’s impact on society, where humans are the transactional commodity.

Figure 1.6

Criminal markets, global averages 2021 vs 2023

Finding 5 The influence criminal actors exert has strengthened since the pandemic

Regardless of structure and their subsequent classification under the Index, the reach and breadth of influence of perpetrators of organized crime grew in 2022. It is notable that this increase has been consistently observed across all criminal actor types and for all regions, with the only exception being Oceania. Notwithstanding their relatively limited presence compared to other criminal actor types, even mafia-style groups have increased in prevalence over the past couple of years – growth that is indicative of a wider trend. This shift comes as global trade and travel have picked up following the restrictions imposed by the pandemic, but also as a result of more opportunities granted to criminals by the cyber domain, as well as greater chances for exploiting fracture.

Figure 1.7

Criminal actors, global averages 2021, vs 2023

Finding 6 State actors remain the most dominant agents in facilitating illicit economies and inhibiting resilience

State-embedded actors remained the most pervasive criminal actor type in 2022. While the degree to which criminality permeates the state apparatus varies across countries and at all levels, state engagement and/or facilitation of organized crime has grown, with the Index finding human trafficking, arms trafficking and non-renewable resource crimes to have been the most affected. Corruption creates opportunities for illicit activities to thrive, as criminal groups are enabled to operate with reduced risks, while criminal infiltration of state institutions undermines countries’ ability to build resilience and effectively shape policies to counter organized crime. Indeed, one of the strongest correlations found among the Index results is between state-embedded actors and overall resilience (−0.79). What this negative correlation suggests is that as state-embedded actors grow in prominence in a particular area, levels of resilience decline.

Figure 1.8

Resilience vs state-embedded actors

Finding 7 The influence of foreign actors is growing

While state-embedded actors continue to exert influence on organized crime flows globally, the increased power of foreign criminal groups suggests greater interconnectedness between transnational criminal networks. In a post-COVID world, the involvement of private military and security groups in conflict and crisis situations has created opportunities for foreign criminal actors to engage in illicit activities. More broadly, the growing pervasiveness of foreign criminal groups in 2022 is likely to be a reflection of the lifting of pandemic-related restrictions, particularly the reopening of country borders.

Figure 1.9

Influence of foreign actors by region, 2021 vs 2023

Finding 8 Smuggling and trafficking of people are on the rise

While financial crimes trumped human trafficking as the most pervasive illicit economy, human trafficking has still increased since 2020. Globally, in 2022, there were over 100 million refugees and internally displaced persons – an enormous portion of whom had turned to smugglers to help them escape challenging circumstances. Profit-seeking criminals, from opportunistic individuals to large-scale professional networks, continue to smuggle people outside legal migration channels and across borders often in perilous conditions and at great human cost, leaving many irregular migrants vulnerable to exploitation. Violent conflicts, inequality and extreme weather conditions could drive further growth in this market.

Figure 1.10

The rise of human trafficking and human smuggling, global comparison 2021 vs 2023

Finding 9 The space for non-state actors as vectors for resilience building is shrinking

Non-state actors saw the largest decline in terms of their score since the 2021 Index of all 12 resilience building blocks. Within a global context in which state-embedded actors dominate the criminal landscape, the weakening role of non-state actors has significant implications for countries’ vulnerability to organized crime, closing off alternative avenues for combating it. Civil society and the media can serve as watchdogs to hold state institutions to account, and many are closely engaged in communities heavily affected by organized crime. Yet tighter restrictions and censorship reduce the ability of non-state actors to serve as alternative sources of resilience to those provided by government. The substantive participation of all stakeholders – intergovernmental, state and non-state – in the conversation around the evolving threats of organized crime is critical in stepping up efforts to suppress and prevent organized crime, and reduce its impact on societies.

Figure 1.11

Resilience summary by indicator, 2021 vs 2023

Finding 10 Those affected most by organized crime are not prioritized

As in 2021, the ‘victim and witness support’ indicator is the lowest-scoring resilience building block overall in the 2023 Index. This finding serves as a reminder of the fact that global anti-organized crime efforts often deploy a securitization approach, focusing on suppressing the activities of criminal actors. There is an apparent imbalance in this strategy, as it neglects those most affected by organized crime. The ramifications of this could be long-lasting and far-reaching, contributing to continued state fragility and greater vulnerability. It is therefore essential that these deficiencies in the safeguards protecting victims and witnesses be addressed.

Figure 1.12

Relative share of resilience indicator by resilience group

Finding 11 Despite conflict and political fracture, international cooperation has improved

In contrast to the declining space for ‘non-state actors’ and the lack of support for those most affected by organized crime, the 2023 Index results show that international cooperation has improved globally. This may suggest that countries continue to move in the direction of institutional responses to combat illicit activities, leaving untapped a unique resource of local knowledge, capacity and skills that could complement state response frameworks. Paradoxically, however, fracture endures where collaboration should ideally prevail. International cooperation does not appear to be systematic globally. Rather, the division between democratic and autocratic states is apparent in countries’ choice of whom to collaborate with. In that sense, true anti-organized crime cooperation on a global scale is challenging. Faced with an issue that transcends borders and politics, states need to intensify dialogue and work on mechanisms to implement and control commitments to fighting organized crime.

Figure 1.13

Regime type distribution by international cooperation score range

Geographic findings

Finding 12 More countries have high criminality rates and strong resilience frameworks

The high criminality–high resilience category remains the one that features the fewest countries. The 2023 assessment shows that only 12 countries, up from nine in 2021, appear in this quadrant: China, Colombia, Costa Rica, France, Italy, Malaysia, Nigeria, Senegal, South Africa, Spain, the United Kingdom and the United States. Arguably, this iteration’s inclusion of new indicators, especially financial crimes, cyber-dependent crimes and private sector actors, is responsible for increased criminality levels in Costa Rica, Senegal and the United Kingdom.

Figure 1.14

Vulnerability classification, 2021 vs 2023 changes

Finding 13 Europe shows the greatest continental increase in criminality, while resilience has grown only marginally

Continents that have previously shown high levels of resilience are assessed as vulnerable to organized crime, with Europe being a good example of that. Although the inclusion of new indicators has certainly affected criminality scores, the original 10 markets have increased in their own right, worsening the criminality environment on the continent. But while criminality is truly pervasive, affecting the entire continent albeit to a different extent, there is a clear division in levels of resilience. There is an apparent East-West divide, with countries in Eastern Europe still struggling to shake off their authoritarian legacies, which have defined organized crime dynamics and resilience frameworks, or the lack thereof, for the past three decades.

Figure 1.15

Score changes by indicator – Europe, 2021 vs 2023

Finding 14 Africa saw the smallest continental increase in criminality, but with increased scores across the 10 original criminal markets

The African continent saw the smallest increase in levels of criminality, despite all criminal actor types strengthening their presence on the continent in a post-COVID environment. That is largely due to the addition of new indicators bringing the average criminality scores down. While the COVID-19 pandemic has undeniably increased internet connectivity in Africa significantly,²³ the continent has been relatively slow to digitize. Lack of development in the cyber domain has in turn prevented forms of cyber-dependent and cyber-enabled criminality from flourishing. If the original 10 markets and four criminal actor types were considered on their own, then the change in Africa’s overall criminality rate would be much more tangible, with an increase of 0.23 points, the second largest increase globally.

Figure 1.16

Criminality average changes between 2021 and 2023 by continent

Finding 15 Asia has the highest average presence of criminal actors

The Asian continent saw a considerable spike in the prominence of criminal actors, especially criminal networks and foreign actors. The inclusion of the private sector as a criminal actor in this second edition of the Index is a recognition of the fact that the private sector is a key intermediary between the licit and the illicit and a vital facilitator of many criminal markets, from counterfeiting to transportation of goods, cyber-enabled crime and money laundering. And while the large increase in criminal actors in Asia was due to a rise in the scores for all four original typologies, it was the weight of the newly introduced private sector actors indicator that pushed the average score so high up. Notably, private sector actors rank the highest in Asia when compared to other continents, and by a large margin.

Figure 1.17

Foreign actors score changes – Asia, 2021 vs 2023

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See United Nations, Day of eight billion, https://www.un.org/en/dayof8billion. ↩
Diana Roy, How bad is Ukraine’s humanitarian crisis a year later?, Council on Foreign Relations, 8 June 2023, https://www.cfr.org/in-brief/ukraine-humanitarian-crisis-refugees-aid. ↩
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Mogomotsi Magome and Cara Anna, Ethiopian govt, Tigray agree to end fighting after 2 years, Associated Press, 2 November 2022, https://apnews.com/article/africa-south-ethiopia-african-union-70fb0d185aaccb668b2fabb4f6e45b9f. ↩
Ellen Ioanes, Haiti’s gang violence crisis, briefly explained, Vox, 26 March 2023, https://www.vox.com/world-politics/2023/3/26/23657163/haitis-gang-violence-crisis-explained. ↩
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/Issues/2023/01/31/world-economic-outlook-update-january-2023. ↩
Laura Adal and Sarah Fares, Petroleum and politics: Oil smuggling and the Iran–Saudi regional rivalry, GI-TOC, 27 January 2023, https://globalinitiative.net/analysis/oil-smuggling-iran-saudi-arabia/. ↩
Jake Spring, Brazil’s Amazon deforestation hits April record, nearly double previous peak, Reuters, https://www.reuters.com/world/americas/brazils-amazon-deforestation-hits-april-record-nearly-double-previous-peak-2022-05-06/. ↩
Oli Brown, How Russia’s war on Ukraine is threatening climate security, Chatham House, 2 March 2023, https://www.chathamhouse.org/2023/03/how-russias-war-ukraine-threatening-climate-security. ↩
Jacob Kurtzer and Hareem Fatima Abdullah, Pakistan’s deadly floods pose urgent questions on preparedness and response, Center for Strategic and International Studies, 13 September 2022, https://www.csis.org/analysis/pakistans-deadly-floods-pose-urgent-questions-preparedness-and-response. ↩
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Pakistan-in-2022A-Year-of-Crisis-and-Instability. ↩
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cop27_auv_2_cover%20decision.pdf. ↩
Karin Strohecker and Vincent Flasseur, Global central banks deliver historic rate hike blast in 2022, Reuters, 23 December 2022, https://www.reuters.com/markets/global-central-banks-deliver-historic-rate-hike-blast-2022-2022-12-23/. ↩
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Major corruption scandals have been reported around the globe, from Peru and South Africa to Qatar and the Philippines, all events that emphasize the omnipresence of the phenomenon. ↩
United Nations Human Rights, Iran: Crackdown on peaceful protests since death of Jina Mahsa Amini needs independent international investigation, say UN experts, 26 October 2022, https://www.ohchr.org/en/press-releases/2022/10/iran-crackdown-peaceful-protests-death-jina-mahsa-amini-needs-independent. ↩
Emily Feng, China’s authorities are quietly rounding up people who protested against COVID rules, NPR, 11 January 2023, https://www.npr.org/2023/01/11/
1148251868/china-covid-lockdown-protests-arrests. ↩
Joy LePree Anderson, Global cyberattacks increased 38% in 2022, Security, 20 January 2023, https://www.securitymagazine.com/articles/98810-global-cyberattacks-increased-38-in-2022. ↩
Una Hajdari, Europol arrests Balkan drug trafficking leaders using a secret chat platform for criminals, Euronews, 12 May 2023, https://www.euronews.com/2023/05/12/europol-arrests-balkan-drug-trafficking-leaders-using-a-secret-chat-platform-for-criminals. ↩
Bailey Schulz and Riley Gutiérrez McDermid, What is the FTX scandal? How the celebrity-endorsed crypto giant collapsed into chaos, USA Today, https://eu.usatoday.com/story/money/2022/11/16/ftx-bankman-frieds-crypto-bankruptcy/10710734002/. ↩
Magali Rheault and RJ Reinhart, Africa online: Internet access spreads during the pandemic, Gallup, 14 July 2022, https://news.gallup.com/poll/394811/africa-online-internet-access-spreads-during-pandemic.aspx. ↩