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  • These are grim economic times,

  • fellow TEDsters, grim economic times indeed.

  • And so, I would like to cheer you up

  • with one of the great, albeit largely unknown,

  • commercial success stories

  • of the past 20 years.

  • Comparable, in its own very peculiar way,

  • to the achievements of Microsoft or Google.

  • And it's an industry which has bucked the current recession

  • with equanimity.

  • I refer to organized crime.

  • Now organized crime has been around

  • for a very long time, I hear you say,

  • and these would be wise words, indeed.

  • But in the last two decades,

  • it has experienced an unprecedented expansion,

  • now accounting for roughly 15 percent

  • of the world's GDP.

  • I like to call it the Global Shadow Economy,

  • or McMafia, for short.

  • So what triggered this extraordinary growth

  • in cross-border crime?

  • Well, of course, there is globalization,

  • technology, communications, all that stuff,

  • which we'll talk about a little bit later.

  • But first, I would like to take you back

  • to this event:

  • the collapse of communism.

  • All across Eastern Europe, a most momentous episode

  • in our post-war history.

  • Now it's time for full disclosure.

  • This event meant a great deal to me personally.

  • I had started smuggling books across the Iron Curtain

  • to Democratic opposition groups in Eastern Europe,

  • like Solidarity in Poland,

  • when I was in my teens.

  • I then started writing about Eastern Europe,

  • and eventually I became the BBC's chief correspondent for the region,

  • which is what I was doing in 1989.

  • And so when 425 million people

  • finally won the right

  • to choose their own governments,

  • I was ecstatic,

  • but I was also a touch worried

  • about some of the nastier things

  • lurking behind the wall.

  • It wasn't long, for example,

  • before ethnic nationalism

  • reared its bloody head

  • in Yugoslavia.

  • And amongst the chaos,

  • amidst the euphoria,

  • it took me a little while to understand

  • that some of the people who had wielded power

  • before 1989, in Eastern Europe,

  • continued to do so after the revolutions there.

  • Obviously there were characters like this.

  • But there were also some more unexpected people

  • who played a critical role in what was going on in Eastern Europe.

  • Like this character. Remember these guys?

  • They used to win the gold medals in weightlifting

  • and wrestling, every four years in the Olympics,

  • and they were the great celebrities of communism,

  • with a fabulous lifestyle to go with it.

  • They used to get great apartments in the center of town,

  • casual sex on tap,

  • and they could travel to the West very freely,

  • which was a great luxury at the time.

  • It may come as a surprise, but they played a critical role

  • in the emergence of the market economy

  • in Eastern Europe.

  • Or as I like to call them, they are

  • the midwives of capitalism.

  • Here are some of those same weightlifters

  • after their 1989 makeover.

  • Now in Bulgaria --

  • this photograph was taken in Bulgaria --

  • when communism collapsed all over Eastern Europe,

  • it wasn't just communism;

  • it was the state that collapsed as well.

  • That means your police force wasn't working.

  • The court system wasn't functioning properly.

  • So what was a business man in the brave new world

  • of East European capitalism going to do

  • to make sure that his contracts would be honored?

  • Well, he would turn to people who were called, rather prosaically

  • by sociologists, privatized law enforcement agencies.

  • We prefer to know them as the mafia.

  • And in Bulgaria, the mafia was soon joined

  • with 14,000 people

  • who were sacked from their jobs in the security services

  • between 1989 and 1991.

  • Now, when your state is collapsing,

  • your economy is heading south at a rate of knots,

  • the last people you want coming on to the labor market

  • are 14,000 men and women whose chief skills

  • are surveillance,

  • are smuggling, building underground networks

  • and killing people.

  • But that's what happened all over Eastern Europe.

  • Now, when I was working in the 1990s,

  • I spent most of the time covering

  • the appalling conflict in Yugoslavia.

  • And I couldn't help notice

  • that the people who were perpetrating the appalling atrocities,

  • the paramilitary organizations,

  • were actually the same people running

  • the organized criminal syndicates.

  • And I came to think that behind the violence

  • lay a sinister criminal enterprise.

  • And so I resolved to travel around the world

  • examining this global criminal underworld

  • by talking to policemen,

  • by talking to victims, by talking to consumers

  • of illicit goods and services.

  • But above all else, by talking to the gangsters themselves.

  • And the Balkans was a fabulous place to start.

  • Why? Well of course

  • there was the issue of law and order collapsing,

  • but also, as they say in the retail trade,

  • it's location, location, location.

  • And what I noticed at the beginning of my research

  • that the Balkans had turned into a vast transit zone

  • for illicit goods and services coming from all over the world.

  • Heroin, cocaine,

  • women being trafficked into prostitution

  • and precious minerals.

  • And where were they heading?

  • The European Union, which by now

  • was beginning to reap the benefits of globalization,

  • transforming it into

  • the most affluent consumer market in history,

  • eventually comprising some 500 million people.

  • And a significant minority

  • of those 500 million people

  • like to spend some of their leisure time and spare cash

  • sleeping with prostitutes,

  • sticking 50 Euro notes up their nose

  • and employing illegal migrant laborers.

  • Now, organized crime in a globalizing world

  • operates in the same way as any other business.

  • It has zones of production,

  • like Afghanistan and Columbia.

  • It has zones of distribution,

  • like Mexico and the Balkans.

  • And then, of course, it has zones of consumption,

  • like the European Union, Japan

  • and of course, the United States.

  • The zones of production and distribution

  • tend to lie in the developing world,

  • and they are often threatened by appalling violence

  • and bloodshed.

  • Take Mexico, for example.

  • Six thousand people killed there in the last 18 months

  • as a direct consequence of the cocaine trade.

  • But what about the Democratic Republic of Congo?

  • Since 1998, five million people have died there.

  • It's not a conflict you read about much in the newspapers,

  • but it's the biggest conflict on this planet

  • since the Second World War.

  • And why is it? Because mafias from all around the world

  • cooperate with local paramilitaries

  • in order to seize the supplies

  • of the rich mineral resources

  • of the region.

  • In the year 2000, 80 percent of the world's coltan

  • was sourced to the killing fields

  • of the eastern Democratic Republic of Congo.

  • Now, coltan you will find in almost every mobile phone,

  • in almost every laptop

  • and games console.

  • The Congolese war lords were selling this stuff to the mafia

  • in exchange for weapons,

  • and the mafia would then sell it on to Western markets.

  • And it is this Western desire

  • to consume

  • that is the primary driver

  • of international organized crime.