Illegal market is one of the main global risks of 2018, according to report released in Davos


Study released by the World Economic Forum analyzes risks in five dimensions

The illegal market, made up of smuggling, piracy and counterfeiting of products, is one of the main global economic risks for the year 2018. This is the conclusion of the study “The Landscape of Global Risks 2018”, prepared annually by the world Economic Forum.

According to the material, “global risks” are uncertain events or conditions that, if they occur, can cause significant negative impacts in several countries or industries in the next 10 years.

The report is drawn up from various sources of official and unofficial data from all countries, in addition to studies of trends from international organizations such as the UN and its various agencies; the World Banks (IBRD), the Inter-American Development Bank (IDB), the IMF and others.

By analyzing the data, the experts at the Forum are able to assess the probability of occurrence and the impacts that these risks can offer if they occur and what this means in terms of local societies, countries, regions, continents. With that, it is possible to develop global strategies to face the challenges that affect different countries and regions.

Brazilian reality

Currently, the illegal market has reached unprecedented levels in the Brazilian economy. The various types of trade diversion represent huge financial losses for the country. To have an idea of ​​the size of the problem, between 2015 and 2017 Brazil lost R $ 345 billion to the crime of smuggling alone. This estimate points to losses in the productive sector added to taxes that were no longer collected in the period.

Among the sectors most affected by the illegal trade in products are clothing, medicine, electronics and auto parts. But the champion of illegality is the cigarette. In 2017 Brazil became the largest global market for illegal cigarettes: 48% of the brands sold in the country were illegal, with the vast majority smuggled from Paraguay.

In the case of cigarettes, the financial losses that this trade brings to the country are enormous. Since 2011, tax evasion caused by smuggling has totaled R $ 23 billion. In addition, it is necessary to take into account the existence of companies that operate in Brazil in an irregular way, the so-called 'persistent debtors'. According to the National Treasury, 13 industries have been closed in recent years for not paying taxes repeatedly. And data from the IRS show that only one of these companies owes more than R $ 4 billion in taxes to the tax authorities

It is also possible to highlight the connection between smuggling and criminal factions such as the First Command of the Capital and the Red Command. Drug trafficking - the most well-known and feared face of factions - mixes with smuggling, piracy, counterfeiting, arms and ammunition trafficking and fuels corruption, generating huge profits.

“The illegal market is today one of the main sources of financing for organized crime in the country,” says Edson Vismona, president of the Brazilian Institute of Ethics in Competition (ETCO). "The violence that Brazilians face every day in Brazilian cities has, in many cases, originated in this crime" he says. For him, the solution to the problem is the integration of public administration efforts with the support of civil society.

Source: JB Online (19/02/2018)