Money laundering in the Balkans is on the rise | The Economist
ON 12 MAY North Macedonian prosecutors have charged Nikola Gruevski, the country’s former prime minister, with money laundering. It is alleged that he funneled money paid to his party through Belize to buy property illegally and conceal the property. He says the case is politically motivated. Meanwhile in Jahorina, a popular Bosnian ski resort, gangsters, along with the officials they bribed, have invested in hotels. All kinds of corruption are rife. An expat, who has half-built an apartment block near his home in Vlora, southern Albania, denounces the building is blocked because he refuses to pay bribes to obtain the necessary permits.
All over the Balkans dirty money is laundered by property, distorting the market and inflating prices – much to the fury of ordinary house hunters. New chic towers rise in Tirana, Pristina and Belgrade. Although the economies of the Balkans have been hit hard by covid-19, house prices in parts of the region have defied gravity. In Tirana, they have more than doubled since 2017. Across Albania, the value of real estate transactions increased by 6.7% in 2020.
Laundering of drug money, especially cocaine trafficking, which has exploded in recent years, is one of the reasons for the price hikes, according to a new report from the Global Initiative Against Transnational Organized Crime, a international network of crime specialists. Another is that rogue officials have to invest their money. All of the Balkan countries have strong money laundering laws, but their enforcement is uneven.
In the past decade, the Balkan crime syndicates have moved beyond their small home country. They now earn much of their money overseas. Therefore, according to the report, a significant portion of their profits is also invested abroad. But they still invest in them. Fatjona Mejdini, who helped research the report, says governments in the Balkans are ambivalent about money laundering. They want to crack down on it, but at the same time welcome the jobs and the investments it can bring. As for the gangsters, murderers to make money, they are conservative when it comes to investing it. They “lack imagination,” says Mejdini, which is why they prefer bricks and mortar to the many other types of businesses they could use to launder their loot.
This article appeared in the Europe section of the print edition under the title “Cache-cache”