Criminal entrepreneurs are thriving on globalization with well-organized, cosmopolitan networks
What do the Balkans, Khazakhstan, Israel, the United Arab Emirates, Nigeria, South Africa, British Columbia, Japan, and China all have in common? According to British journalist and former BBC correspondent Misha Glenny, these countries are the new hotspots of an expanding international network of illegal activity.
In his fourth book, McMafia: A Journey Through the Global Criminal Underworld, Glenny guides readers through the worldwide "shadow economy," where we meet a motley crew of unsavory, entrepreneurial characters: Serbian cigarette smugglers, South African arms dealers, Nigerian fraudsters, Canadian pot growers, and Middle Eastern money launderers, to name a few. Like a cruise director on a vice tour, Glenny tells a streetwise, rollicking, and at times disturbing story.
Glenny first noticed a rising tide of criminality in the 1990s, while he was covering the wars in the former Yugoslavia. A new wrinkle: When paramilitary units destroyed villages, he found, they brought back booty that was sold to raise venture capital used to finance criminal enterprises.
The fall of communism and the globalization of financial and commodity markets, Glenny argues, were the key triggers for a boom in black marketeering. A new criminal overclass "understood instinctively that rising living standards in the West, increased trade and migration flows, and a greatly reduced ability of many governments to police their countries combined to form a gold mine," he writes.
Glenny's title reflects what he perceives to be the global reach of these bad guys, as criminal corporations seek out "overseas partners and markets to develop industries that were every bit as cosmopolitan as Shell (RDS.A), Nike (NKE), or McDonald's (MCD)." Citing figures from the World Bank and other sources, Glenny estimates the shadow economy now totals 15% to 20% of global GDP.
The author begins his journey in the blood-soaked Balkans, a territory he knows well. Drawing on his
knowledge of the area's history and his many contacts, Glenny describes how then-Prime Minister of Montenegro, Milo Djukanovic, allegedly teamed up with another enterprising Yugoslavian named Vladimir "Black Pirate" Bokan to move billions of dollars worth of untaxed cigarettes from the Balkans to the Italian mob.
Bokan bought the cigarettes in European free trade zones for 40¢ a pack and sold them for $3 to $4—undercutting the price of cigarettes by about $6. Bokan flew in the smokes aboard two of his own Russian transport planes, and sent them to Italy via speedboat.
The heart of the volume, though, is devoted to uncovering what Glenny alleges is one of the world's largest money-laundering operations, based in the United Arab Emirates. Here, the central character is Dawood Ibrahim, a formerly impoverished Indian youth who rose to become the lord of Bombay's underworld, running his empire from the distant outpost of Dubai. Dawood started out smuggling gold, expanded into various forms of extortion, and finally turned to trafficking in heroin bound for Europe and Mandrax (an addictive sedative) going to South Africa. Dubai became the world's "washing machine," where, Glenny alleges, local banks did not try very hard to determine the source of large money transfers. "Gangsters from Mumbai to the Balkans began pouring money into Dubai's property market in an effort to launder their money," he reports.
Another deadly yet fascinating rogue is Viktor Bout, the South Africa-based overlord of arms trafficking. His exploits have inspired two Hollywood movies, Blood Diamond and Lord of War. Dubbed "the leading merchant of death" by a former British official, Bout made his air cargo service into a lucrative seller of arms to factions in four major African wars.
It's a kick to hitch a ride with Glenny as he hops around the globe, worming his way into shadowy alleys, deep evergreen forests, and gleaming financial towers in the desert. There's one pothole: A section on cybercrime lacks the same ring of authority as other chapters.
McMafia's major shortcoming is the absence of a narrative running throughout the book. Instead, it's one colorful vignette after another. Still, with such a tenacious and intelligent reporter as a guide, McMafia offers a brisk and revealing journey.