Policies to alleviate poverty (such as boosting the minimum wage) can backfire and send unemployment rates up, offering subsidies to key industries can reduce competitiveness and innovation, and raising taxes on cigarettes has little impact as consumption turns to the black market.
Just take a look at Angela Merkel. If just a few months ago, Merkel was widely seen as the strongest leader in Europe, the German chancellor is now at risk of losing everything she has built over the past 10 years as a result of her short-sighted handling of the refugee crisis. Her political support has been cratering as a result of the larger than expected wave of asylum seekers making their way to Germany from Syria via the Balkans. Despite Merkel’s good intentions, the open door policy to migration has also given a fresh lease on life to the underground economy and more specifically, the black market.
Supply follows demand — when Merkel threw open the padlocked gates to one of the world’s richest countries, the smuggling business exploded throughout the Balkans. Even if organized crime has always existed in Europe (just look at Italy), the combined effects of globalization and the expansion of the Schengen free travel area across Central and Eastern Europe made the movement of criminals much easier than before.
The Wall Street Journal ran a searing expose of Bulgaria’s blossoming human trafficking rings and how they shape-shifted away from the more conventional guns, drugs and cigarettes to migrant smuggling. This entirely new business opportunity blossomed over the summer, buoyed by the swelling of the migratory wave escaping war-torn Syria answering to “mama” Merkel’s call. Attracted by its low risks and high rewards, “from sophisticated transnational gangs to the lone opportunist equipped with just a phone and a vehicle,” a migrant smuggling bonanza has taken hold of large swathes of Bulgaria – with deadly consequences. The most egregious example involved a Bulgarian driver who left 71 migrants to suffocate to death in a lorry on an Austrian motorway.
Tapping into the endless reserve of human desperation isn’t something new — receiving political guarantees of receiving asylum if you touch down on European soil, however, is. As a result, criminal groups both big and small are now essentially bankrolled by a demand created by a policy that had sought to reduce the plight of refugees. As long as Brussels and Merkel refuse to factor in the full consequences of the current policy towards migration, humanitarian aid and peace attempts will be useless without mounting a decisive fight against such criminal groups who have a hidden interest in keeping the Middle East burning.
In true whack-a-mole fashion, letting in asylum seekers has exacerbated security problems from the Balkans all the way into the heart of continental Europe. Amnesty International deputy director Gauri van Gulik, talking about the collective policy failure of European leaders to look beyond the mere opening of borders, remarked that “people dying in their dozens – whether crammed into a truck or a ship – en route to seek safety or better lives is a tragic indictment of Europe’s failures to provide alternative routes”
Indeed, while pundits keep arguing that the refugee crisis is Europe’s biggest crisis in a generation, such accolades would be much better fitted for the fight against organized crime. With every new regulation, a new market for the underground economy opens up, provided borders are porous enough and political institutions accommodating enough. Just take the recent moral panic about clamping down on tobacco use, which has only increased the profits made by smuggling rings. From the UK’s proposal to almost triple the price of cigarettes, to the fiery debates ranging in the French parliament about introducing an Australian-style law of plain packaging, such restrictive policies will never have the desired impact. Indeed, in Australia, the introduction of plain packaging coupled with an increase in taxes on tobacco products has resulted in booming illicit tobacco market, increasing 30 percent in the past two years and costing taxpayers over $1.35 billion.
We are awash in reports that detail with painful meticulousness the way smuggling, organized crime groups and human trafficking rings form the backbone behind the financing of terrorism and guerrilla insurgencies, whether in Latin America, Africa or the Middle East — yet policymakers only rarely follow the policies they support and implement to their logical conclusions.
