The Impact of Money Laundering in the Economic Development in Liberia
International terrorism persists with unwavering dominion over a global scale to this date leading to global economic destabilization. A major and precursor contributor to financing international terrorism emphasize on money laundering activities. Money laundering defined as the illicit outsourcing for financial resources to spur varied causes widespread across national borders in a transnational scale permeated economies toiled with fragmented societies, legal structures, political instability that wields with weak control over their respective jurisdictional flaws innate within these elements for an extended period of time to their respective histories.
A study by the Economic Welfare of western African States (ECOWAS) incorporating Liberia, as one of the emerging economies, raised to awareness in recent years the prevalence on the growing issues of money laundering lurking with its concealing and disruptive characteristics. The region envelopes the deceiving mechanisms which enable to take advantage over these weaknesses and enhance to develop by the vulnerable use of low scale technology, by which the flows of illicit transactions transcend in volume in a concealed manner. Money laundering schemes, possible to draw even from legitimate and common knowledge based methods and through the legitimate channels in the international financial system, facilitate the growth of capital flows through political actors that seek to spawn their personal causes and inclinations of corruption to dominion realities wielding adverse political will and power parallel to illicit financing through haven repositories and tax haven schemes (Ezeani andEzeani, 2005, p. 1). For example, Swiss banks with the advantage of the bank secrecy laws does not permit to disclose the nature of transactions and have therefore become a prominent prospect for tax havens and other investment haven schemes similar to the tax evasion case with the United States that becomes vulnerable to process illicit financial transactions in modest scales and evade to erode currency value growth. Countries with considerable or extensive instability in respective political structures are easily vulnerable to accommodate as havens for the developmental process for illicit activity, cohesively in the sphere of international terrorism. The historical, long term and generic instability characteristic to western African states, including Liberia, attribute to the central purpose to organizing ECOWAS to suppress precursor activities to money laundering, like illegal narcotic distribution and drug trafficking, illicit mining and commercial trade of diamonds as a large scale revenue source from natural resources of the region. Despite the defensive mechanisms during the implementation process in the case of Liberia subversive regimes and remnant activities linked to armed conflict on a regional scale and despite the economic progress in Liberia in recent years coupled with transnational illegal trade and financial flows around the country can capably erode and threaten an overcoming reconstruction regime. The adversity in the interstate affairs of the region is insurmountable that require a cohesive cooperation and discipline among regional states that extend beyond the capabilities ECOWAS can facilitate with solutions available to its disposal. With this the current stage set for post conflict resolution and reconstruction, as armed conflict plagued the western African region in recent years, has no guarantee for state actors to result a pervasive restoration and indelible legalization regime to suppress over the equally persuasive, complicit clout and vulnerability on the political, social and economic systems in Liberia amid the early stages of overall progressive development during the reconstruction phase to reckon the influence generated mutually by interstate interaction among nonstate actors and in government levels who themselves engage in criminal activities to struggle with dominion over the region (Ezeani and Ezeani, 2005,p. 7).Moreover the inflexibility ingrained in Liberia’s constitutional structure which otherwise require to extend to new laws adaptive to address the pervasive implications contemporary issues imbued are unable to extend into permanent policy and legal reforms to resolve the challenges on individual state capacities. Not only concentrated within geographical bounds within the Western African states, the complexity of money laundering extends to even the most lawful financial designs in securitization, insurance policies, shell corporations and other financial solutions under diverse national and international laws pose a monstrous challenge that require a cohesive and synchronic network is imperative to resolve beyond the reach of continuous trenches of elusive interaction and cooperation regimes synchronized to work in a nucleus approach. Without the end to the political instability and economic vulnerability in Liberia, these challenges will prevail to an escalating scale and pace amid reconstruction efforts.
Furthermore, extensive and effective disciplinary measures agreed through national and international efforts for implementation to suppress the recurrence of money laundering should be the primary initiative as this is a concern. Research in institutional settings set the frontiers at which the mechanisms and structural and policy approaches in the case of Liberia, that is, under the governance TRC-Liberia, face doubt and challenge. in coping peace and stability in Liberia. The major motivation for restless conflict in the area roots to the control of complicit and legitimate resources as well as profitability gained from corruption among officials. Therefore subversive reforms to these faulty practices should amend all corners of social, economic and political structures by the help of offshore and onshore based human resources, organizational NGOs and community based organizations with the top-down approach in national, state and local governments and law enforcement agencies. This should also include corporate sectors in vital industries to revamp policies through audit committees and curb with subversive efforts the transnational financial links that looms illicit financial activities. Extensive studies scant on establishing the links to haven repositories of illicit financial activity among legitimate schemes, even among the respective economic and legal structures of the largest international financial institutions, should be sifted through in areas at which prone to crystallize these links. The feasibility and the cost to provide long term reconstruction efforts combined with these aforementioned areas for research should be the primary focus for further study. A consensus based approach to a holistic reach international money laundering entails is imperative to combat its destabilizing effects (Gitau, 2007,p.3).
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