Money Laundering in the Former Soviet Union

Tajikistan is in the news, a rare turn of events occasioned by an everyday problem. Money laundering represents a varying but real share of national income in many of the former Soviet republics, and Tajikistan, not notable for having many other kinds of industry, is benefiting from the EU crackdown on its own havens to step up in the world.

It’s not a great step up, though.

The problem is not susceptible to a single solution and is likely to persist for some time. The eurozone’s crackdown on its weaker member banks — Cyprus was likely only the first, and everyone knows it — and the pressing need Iran, Russia, and even less savory places and people have for moving large quantities of currency on the edge of the largest economic area of the world have merely exacerbated cultures of lawlessness and tolerance for certain kinds of organized crime.

The problem is especially severe in the -stans, the Central Asian republics where the Soviet writ was never terribly effective at stomping crime while incredibly effective at promoting and protecting official corruption. The net result is a perception that the law exists for the powerful, and in such places, what is left of civil society can never truly compete with the government and therefore grow.

To describe the problem isn’t to solve it. That will take a multi-year effort along many fronts: democracy promotion, market initiatives, international integration, and education to teach government elites that they and their people will be better off under the rule of law than they are without it.

The EU and the rest of the West have lost faith in many of their own values. Neither Russia nor China, the nearest superpowers, believe in them or care. It appears that those values will have to wait, and with it, any hope of encouraging democracy and civil society in these lost places.

Image Copyright Grafixtek