Abu Dhabi/New Delhi: The illicit economy is a giant, global and growing problem, a World Economic Forum report said and cautioned that the cost to the global economy of counterfeiting alone could reach USD 1.77 trillion in 2015.
According to a new paper by the World Economic Forum Meta-Council on the Illicit Economy, the value of the global illicit economy is regularly placed at over USD 1 trillion. However, data is often out of date, sometimes by more than 10 years.
"Our Global Agenda Council on Illicit Trade 2012-2014 estimated the shadow economy to be worth USD 650 billion. More current research projects that the cost to the global economy of counterfeiting alone could reach USD 1.77 trillion in 2015," the WEF report said.
With technological advancements and the international nature of trade in the world today, this value is expected to continue to rise, the report cautioned.
The report noted that the illicit economy needs to be measured before it can be combated.
"You need to know your adversary in order to beat it, and sadly there is lack of clarity around the threat of the illicit economy," World Economic Forum Head of Public Security Policy and Security Affairs Jean-Luc Vez said.
The report noted that criminal organisations have exploited the gaps in our governance capacity and policy in addressing the illicit economy.
"The proliferation of illicit activities shows no signs of slowing. It grows particularly in regions where there is lack of governance and social structure," Adam Blackwell, Chair of the Meta-Council on the Illicit Economy said.
According to the WEF report the illicit economy is vast and hampers the growth of the global economy while also jeopardising the stability of society and governance.
"With estimations of various illicit activities running into billions of US dollars, these figures rival the GDP of some G20 countries. This cannot be neglected - the illicit economy and its related activities must be addressed," Blackwell said.
