The black market in wildlife trafficking and trade in tobacco are destabilising regions and prolonging civil wars around the world, economists said.
A changing dynamic of modern warfare and its connection with the booming trade in bootleg markets was discussed at a global summit in Abu Dhabi, hosted by The Economist magazine.
The Changing Character of War Centre at the University of Oxford was established after 9/11 to gain a better understanding of the evolving dynamic of modern warfare and how it fits in with illicit trade markets.
“Cross-border tribes in this region have long smuggled contraband to pay for combat,” said Dr Annette Idler, the centre’s director of studies. “That is what is happening in Syria, Lebanon, Turkey and the rest of Europe and the world.
“We are now seeing this being reshaped by current trends. ISIS, for example, has grown to operate trans-nationally and has been using global illicit trade markets to fund and facilitate their operations.
“These criminals are now subcontracting computer hackers and rebels are working together with other militia and drug traffickers to fund their combat and facilitate regional instability.”
The Abu Dhabi event brought together delegates and experts from government, law-enforcement agencies and the private sector to address the root causes of illegal trade and ways to battle it.
It focused on new tech-nology, taxation, legal loopholes, free-trade zones, e-commerce and regional socio-economic instabilities that have presented new opportunities for counterfeiters, intellectual property crimes and other forms of illicit trade.
“Terrorist groups funding their actions through illicit trade is only one part of the bigger picture,” Dr Idler said. “There is a huge profit behind organised crime but it is more nuanced than that.
“Groups need to pay their soldiers and to buy their weapons. They are thriving in a war economy.
“In Colombia, the cocaine trade has helped fuel conflict, as has opium in Myanmar. Sierra Leone has endured years of conflict funded by the diamond trade.
“The lines between legitimate trade and the illicit markets are often blurred, and there is a Robin Hood image of some of these warlords operating in combat zones.”
Experts said illicit trade overlapped, with seizures by border controls uncovering a mixture of contraband that could include people, wildlife, drugs, alcohol, weapons and cigarettes. Wildlife is an increasing commodity in funding terrorist activity.
A decision by the Chinese government to lift a 25-year ban on the use of tiger bone and rhino horn in medicine was described as "worrying", said David Luna, a former US government specialist in terrorism and national security, and now president of Luna Global Networks.
“We’ve seen high-level royals and governments come out and talk about the importance of stopping animal trafficking and there has been an increase in international co-operation but there are challenges,” Mr Luna said.
“Just 10 years ago rhinos were being clipped at a rate of about 20 a year. That rose to 1,400 two years ago, it shows how profitable it has come.”
Multilateral trade institutions such as the World Trade Organisation are fighting back.
“Illicit trade is a global issue and its breadth and scale are growing,” said Raed Safadi, a chief economic adviser for the Dubai Government.
“Illicit networks exploit the technological, financial and communication innovations of globalisation. The starting point is to recognise that illicit trade is a trade barrier. We need a holistic approach, not a fragmented approach.”