The War on Terror, Crime and the Shadow Economy in the MENA Countries

Abstract

This paper discusses the impact of the ‘global war on terror’ on crime and the shadow economy in MENA (Middle East and North Africa) countries. It focuses more specifically on the contradictions, dysfunctions and unintended consequences of that ‘new kind of war’. The first part discusses the ‘national security fundamentalism’ introduced in the wake of the 9/11 attacks, and its uneasy interaction with ‘market fundamentalism’, the other major structuring principle of the global economy. The second part discusses the internationalization of ‘money laundering and terrorist financing’, a paradigm that grew out of a specifically American context and was uncritically transposed to an entirely different environment. The third part of the paper considers the impact of the war on terror on crime and the shadow economy in the MENA region. The central argument is that the war on terror has created ‘gated economic communities’ and broadened the scope of the shadow economy. Heavy-handed regulation, arbitrary and selective enforcement, as well as the quasi-criminalization of hawalas (informal funds transfer networks) and Islamic charities, have driven more financial flows underground. In addition, the conflation of money laundering and terrorist financing crowded out the fight against financial crime. The paper suggests a new hypothesis about the relation between politically motivated terrorism and financial crime.