Fake currency from Pakistan causing a headache to India: Report

By Arun Kumar, IANS
Tuesday, February 8, 2011

WASHINGTON - Counterfeit currency is becoming a cause for concern in India with fake rupees believed to be printed in Pakistan and then channelled through Dhaka, Bangladesh, and Bangkok, Thailand, into Kathmandu, according to a new report.

This heavy inflow of fake currency has led some to speculate that Pakistani elements are deliberately trying to “create confusion and destabilise India”, says the report released Tuesday by Global Financial Integrity, a Washington based study group.

The report on “Transnational Crime in the Developing World” estimates that illicit trade in “goods, guns, people, and natural resources” is a $650 billion enterprise, which most negatively impacts the developing world.

Indian authorities estimate that as many as 400 million fake rupee notes with a face value of some $9 million are in circulation in the state of Uttar Pradesh alone, and fake currency dealers in Nepal projected in 2009 that “by 2010 nearly 10,000 crore ($2.2 billion) of fake currency will be in circulation in India”.

Destabilizing elements within states are also known to use profits from wildlife trafficking in order to fund military operations, the report said.

“Somali warlords and two Islamic extremist groups in India with ties to Al Qaeda, Harakat ul-Jihad-i-Islami-Bangladesh (HuJI-B) and Jamaatul Mujahedin Bangladesh (JMB), have sponsored illegal elephant and rhino poaching,” it said, citing Interpol and the US State Department.

“This development has implications not only for developing countries but also for international security,” it said.

China is the world’s major source country for counterfeit goods, but there is also known counterfeit production in Taiwan, Vietnam, the Philippines, Malaysia, India, Russia and other former Soviet Republics, as well as countries in Latin America and Africa.

As with other forms of trafficking, the illegal kidney trade generally “flows from poor, underdeveloped countries to rich, developed ones”.

Common countries of origin for donors include China, India, the Philippines, Turkey, Egypt, Moldova, Romania, Brazil, Bolivia, and Peru, the report said.

Of the 12 illicit activities studied, trade in drugs ($320 billion per year) and counterfeiting ($250 billion per year) were ranked first and second in terms of illicit funds generated.

Another key finding of the report was that profits from illicit markets are making their way to transnational crime syndicates through vast international trade networks.

The report rankings for the illicit markets examined are:

Drugs $320 billion, counterfeiting $250 billion, humans $31.6 billion, oil $10.8 billion, wildlife $7.8 to $10 billion, timber $7 billion, fish $4.2 to $9.5 billion, art and cultural property $3.4 to $6.3 billion, gold $2.3 billion, human organs $614 million to $1.2 billion, small arms & light weapons $300 million to $1 billion and diamonds & coloured gemstones $860 million.

(Arun Kumar can be contacted at arun.kumar@ians.in

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