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Opinion: Anti money laundering the new imperialism

by GHK Lall

The more I study anti money laundering requirements, the more I come to see the entire process as representative of a new imperialism.  In practice and result, this can also be viewed as the face of bloodless 21st century coups d’état; the changes are mental and operational, not physical.  To use Cold War language, it is the embodiment of containment, economic containment.

Centuries ago, wealth was traced to its origins and seized at those sources.  Francis Drake, Jack Hawkins, Hernan Cortez, Francisco Pizarro flourished on this side of town; while Commodore Perry and the East India Company pointed cannons, raised flags, and delivered opium in Japan and China respectively.  Mother countries and Western societies flourished, as native civilizations were plundered and devastated.  But all those historically acclaimed names came because of intentions to identify and pillage sources of wealth.

Today, source of wealth in those same once beleaguered local and still poor places are tracked, questioned, tasted, smelled, autopsied, and reviewed endlessly.  The merest whiff of taint and the newly sanctimonious powers are ready to unleash an array of sanctions and shutdowns, with the ultimate being that of pariah nation and reduced to isolation from the commerce of nations.

Before proceeding, I must be unequivocally and absolutely clear: The drug trade and those involved brings immense personal revulsion, especially when the entirety of the associated costs is surveyed.  Still, I say that the heavy emphases have to travel from where they are now firmly established (AML) to where they more rightly belong and should be effectively deployed.  And that is on the demand and user side of the business.  Since it has long been known that the great majority of drug users are non-minorities, then any targeting of the demand side is off the table, and those so-called wars on drugs are, to some extent, shallow pretenses and exercises in futility.

As examples, in Afghanistan, some of the larger poppy producers are Western partners.  Call those foreign policy priorities, as was the case with Noriega.  In Columbia, much of the resources earmarked for narcotics suppression end up in areas where drug activity is less intensive, if present at all.  Not accidentally or surprisingly, it is where oil is.  Thus, the narcotic wars are compromised.  Since, the demand side is off-limits, then that leaves the majestic superpower sweep of anti-money laundering, with countering of the financing of terrorism piled on for added urgency.  Given that the supply and market are unmanageable (or undesirable to challenge), then proceeds from sales are what is left to target.  And since these proceeds mostly find their way to certain poor, underdeveloped, and grasping economies, then what could be easier than to bring the full array of attention, sanction, damnation, and justification on these fledgling nations struggling to figure out who they really are, and what and how they should be.

Terrible prices were paid before; now new painful stringencies surface.  One of the great tragedies has been the millions chained and dragged across the Atlantic to feed the plantations and fashionable sweet tastes of their betters; the same was done in the name of soothing tobacco smoke.  To digress momentarily, it has to be the cruelest of ironies, centuries later, that black tea (or sweet and low) is recommended, and smoking is dangerous to health.  Africa and this region have to be injured further after giving so much to those economic callings on which great monuments were erected and economies prospered.  On the other hand, previously ravaged, but emerging, economies are at the constant risk of the new terror of black listing because citizens of advanced modern day societies cannot keep their noses clean; or their minds unaltered.

A long time ago they came for the gold in their privateers and galleons.  Now whenever illicit riches reside in the domain of near helpless nations, source of that wealth becomes the alpha and omega of interest, scrutiny, and powerful curtailment.  Now that tens of billions are the annually costs in healthcare and other social ravages, there is this unrelenting and formidable focus on source of funds through the implementation of robust AML standards.  It could be said that foreign priorities and calculations are, once again, laying waste the promise of poorer places.

Admittedly, it is intricate and fraught with danger to do nothing, particularly in view of the criminalization of sometimes entire societies; little Guyana stands as an enlightening example.  Still, when observed from the foot of the mountain, AML points to an immeasurable hypocrisy, and a new slavery repeated under more sophisticated format, and occasional intrusive colonial presence.  AML has come to represent the harsh bitter medicine (akin to chemotherapy cocktails) that kills good cells along with the bad ones.  It could be described as collateral damage; it is also about casualties of the latest undeclared war.  It just might be a phony one, too.  Unholy opium wars were first succeeded by later unpersuasive drug wars and now today’s focus on unhinging AML wars that encircle and cripple.

Again, let there be no mistake: I have serious problems with laundering and launderers.  But I look upon these encroaching and suffocating AML regimes for not what they inflict upon developing economies, but more for what is deliberately and wrongly deemphasized in the countries that lead the charge in the identifying and cleaning up of dirty money.

Looked at dispassionately, AML is a vitally necessary evil.  Guyana stands as the poster for what can be inflicted upon institutions, systems, and peoples, and direly needs some of that oversight.  Yet I say, if there is no demand, then there is no sale, which means no cash flow.  Hence, there would be less of a need for the now ubiquitous AML shadow and specter.