Dirty money weakens economies
The biggest antidrug conference in history has closed in New York with predictably mixed results. About 150 nations, including Thailand, have embraced a final statement that is high on rhetoric and ambitious in its goals. It sets two deadlines for all countries of the world. Within 10 years, they will wipe out drug crops -- chiefly opium and coca -- by providing alternatives to farmers. Within five years, they will have effective laws in place to combat increasingly slick and progressively dangerous money launderers.
There is no doubt that both of these laudable targets can be met. But there is a serious question about whether they will be. The biggest question by far is whether governments will have the will and the courage needed to achieve these two goals. But the toughest program to implement may be to get the needed laws in place to combat the new breed of slippery, cross-border criminal.
Money-laundering, by some estimates, accounts for more than 10 percent of international money changing. The International Monetary Fund says it amounts to 5 percent of the world's entire GDP -- US$400 billion. It threatens to wreck some countries as criminals move in on economies and political systems.
Thailand and most of our neighbors lack banking legislation that can combat criminals. Precisely because of this, our regional economic crisis has served as a magnet. Dirty money from all parts of the globe have flowed our way.
But contrary to logic, dirty money weakens rather than strengthens an economy. Few if any taxes are paid on illicit funds. Investments are small, in movable assets, because their purpose is only to gain legitimacy, and then to be moved elsewhere to continue the pyramid. Criminal-tainted money discourages lawful investment, raised by hard work and attention to customer satisfaction.
Thailand should have no interest in such investments. Parliament must pass delayed anti-laundering laws quickly. That would put us in agreement with the UN declaration we signed this week in New York. More importantly, it would help us keep the criminals out of our extremely vulnerable economy.
-- The Bangkok Post