To measure how nations are dealing with illicit trade, the Transnational Alliance to Combat Illicit Trade (TRACIT) has commissioned the Economist Intelligence Unit to produce the Global Illicit Trade Environment Index. At the bottom of the overall index are generally developing economies, with Libya ranking last.
The Illicit Trade Environment Index measures the enabling environment for illicit trade that economies create through both action and inaction across four categories. The 2018 index has been expanded to cover 84 countries across the world.
Key findings
- With a score of 85.6 (out of 100), Finland ranks first in the overall index, besting the UK by only 0.5 points. The rest of the top 10 is rounded out by a handful of European countries (Sweden, Austria, Netherlands, Denmark and Germany), along with the US, Australia and New Zealand.
- At the bottom of the overall index is a group of developing economies from all regions of the globe. Libya ranks 84th out of 84 economies, with a score of 8.6, and is joined by Iraq in 83rd place, scoring less than six points better. Faring slightly better, but still poorly, are a group of economies that score in the twenties and thirties in the index: Myanmar (82nd), Laos (81st), Venezuela (80th), Cambodia (79th), Kyrgyzstan (78th), Belize (77th), and Ukraine (76th) and Trinidad and Tobago (75th).
- Regionally, Europe (34 economies in the index), which includes the EU-28 plus six other countries, earns the highest the average score (68.0). The Asia-Pacific (21 economies) comes second at 56.0 and the Americas (19 economies), including the US and Canada, is in third at 54.0. The Middle East and Africa (10 economies) is last among the regions, mainly due to low scores on the “supply and demand” and the “transparency and trade” indicators.
- Among the four categories in the index, the highest average score (69.0) across all 84 economies is in “customs environment,” which measures how effectively an economy’s customs service manages its dual mandate to facilitate licit trade while also preventing illicit trade.
- The lowest average score (50.0) is in the “supply and demand” category, which measures the domestic environment that encourages or discourages the supply of and demand for illicit goods.
The average overall score in the Global Illicit Trade Environment is a shade under 60.0. Where economies aren’t under-resourced in customs or law enforcement, they may otherwise be indifferent or actively neglect illicit practices in order to continue reaping the economic benefits of being a global financial centre (like the UK) or a regional logistics hub (like Singapore, Dubai and Panama) or one of the world’s factories (like China and Vietnam) or a main source of narcotics (like Colombia). Or they may just be corrupt; corruption is far more pervasive than people appreciate and it is by no means limited to the developing world, as investigations in the US and elsewhere have recently shown.
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