Interview: Dr Amado Philip de Andrés, Regional Representative for Eastern Africa and the Horn of Africa, UN Office on Drugs and Crime
Dr Amado Philip de Andrés is the United Nations’ Office on Drugs and Crime (UNODC) Regional Representative for Eastern Africa and the Horn of Africa. Currently he is spearheading innovative UN initiatives in Eastern Africa and the Horn such as the establishment of the first-ever FinTech platform under the leadership of the government of Mauritius to leverage private and public sector funding to implement sustainable development goal initiatives that strengthen peace and security in the region and create mid-term youth employment opportunities. Dr de Andrés is a strong advocate of the UN Development System Reform which is transforming the way in which the UN operates in this region of 450 million people. He is a firm believer that post-Covid-19, the UN Development System, regional member states and the private sector need to scale up their joint action to find short-term and mid-term solutions to the new challenges and opportunities investors will face in Eastern Africa. Aperio Intelligence spoke to Dr de Andrés about financial crime in Eastern Africa.
How has the pandemic impacted organised crime in the region and how could the UN Convention against Transnational Organised Crime (the Palermo Convention) be more effectively implemented in the region to tackle cross-border crime?
The fallout from the Covid-19 pandemic is having a profound deleterious impact on multiple aspects of our societies and economic systems, which, in turn, influences and shapes organised crime and illicit markets. The institutional response to the pandemic and the socio-economic changes are already affecting the way in which criminal networks operate, and the law enforcement responses to them. What is emerging is that the pandemic has reduced certain organised criminal activities, while, simultaneously, providing opportunities for new ones in Eastern Africa. Organised crime has repeatedly demonstrated its versatility and ability to rapidly exploit changing environments, and, indeed, organised crime groups across the globe are attempting to position themselves to benefit from the response, just as they have done with other humanitarian crises.
According to UNODC research, the simultaneous health and economic crisis caused by Covid-19 and its related countermeasures have provided organised crime groups (OCGs) with opportunities to seep even further into the fabric of the
legal economy and exploit public funds made available by governments. At the same time, some forms of OCGs are organisations that continuously aspire to govern not only markets but territories. The current global crisis has exacerbated some states’ fragility reinforcing OCGs’ control over conquered territories and strengthening their bonds with the people living there.
The infiltration of the legitimate economy by OCGs in the current pandemic could give rise to two main dynamics in Eastern Africa: first, OCGs could infiltrate and acquire the control of legitimate companies. Companies most likely to be infiltrated are those most hit by the crisis and those whose goods and services are in high demand. On the one hand, OCGs’ investments tend to converge with industries, sectors, and companies that are most affected by the crisis, since they are more vulnerable to the injection of criminal capital as a result of the shortage of liquidity. On the other hand, OCGs’ investments can target sectors and firms which are in greater demand and are thus more profitable as a result of the pandemic. Secondly, OCGs may seek to intercept the flows of public money that countries and supranational organisations are currently providing to individuals, households, and businesses in an attempt to revitalise national economies and support citizens.
The United Nations Convention against Transnational Organised Crime (UNTOC) of which UNODC is the guardian UN agency has all the rights tools to fight transnational organised crime in all its forms. Member states are increasing their technical assistance requests to UNODC to scale up their institutional fitness to fight emerging threats posed by drug trafficking, transnational organised crime and terrorism in Eastern Africa and beyond.
What role does the private sector have to play in combatting corruption?
Kenya is an excellent example of the private sector joining forces with the public sector and the UN Development System in the fight against corruption. The renewed pledge by the President of the Republic of Kenya, Uhuru Kenyatta, to fight corruption has been very much welcomed by the UNODC. During his address to the nation in 2019, President Kenyatta expressed his intent to make the issue of corruption a focus area for his administration in the coming months, noting “more must be done” including by justice institutions.
With corruption again dominating public discourse in Kenya, UNODC salutes President Kenyatta’s intensified focus on stamping out corruption at all levels, from investigations to high-profile prosecutions. UNODC is supportive of the government of Kenya’s anti-corruption efforts and we are pleased to be furthering our technical assistance to the justice sector in 2020 as part of our ongoing partnership with the government, as well as the private sector. This includes the Blue Company Initiative Project whereby UNODC is partnering with the Blue Company in Kenya to assist with capacity building and the provision of anti-bribery and whistleblowing guidelines and procedures to certified Blue Company members on anti-corruption compliance.
Additionally, the Fast-Tracking UN Convention Against Corruption (UNCAC) project, funded by the UK government, provides anti-corruption related assistance to Kenya and other jurisdictions in East Africa. By the same token, in 2020, through the European Union-funded Programme for Legal Empowerment and Aid Delivery in Kenya (PLEAD), UNODC has quintupled its technical support for justice reform initiatives for better service delivery by the judiciary and the Office of the Director of Public Prosecutions, among other institutions. For example, this has included assistance to streamline case management so that
criminal cases are dealt with justly and expeditiously and strengthening the role of the National Council on the Administration of Justice (NCAJ) as a central, coordinating body.
What can financial institutions do to help the fight against drug trafficking?
Financial institutions are equally vulnerable to the intrinsic risks of illicit financial flows from drug trafficking. The solution is investing in blueprint interventions, supported by the UNODC and other UN Development System partners, which focus on strengthening institutional capacities of our regional member states to identify and eradicate transnational organised crime and drug trafficking networks. By investing in FinTech and blockchain solutions along with the UN Development System, investors and financial institutions would also be supporting youth employment generation while paving the way for FinTech ecosystems.
Let’s take the example of Mauritius: UNODC, along with a team of seven private sector FinTech partners, have been investing considerable amounts of time and assets in the establishment, along with the government of Mauritius, of a new FinTech ecosystem based on an e-wallet (PayByDodo) and a FinTech exchange (Xange). This UN-backed initiative has attracted new state-of-the-art partners and investors such as NASDAQ and UKCloud. Once this system is fully functional between the spring
and summer of 2021, partners will be seeing annual return-on-investments close to 9 percent while contributing to a prime sustainable development goal economic accelerator supported by the UN Development System.
Are there significant links between trafficking and terrorism in the region?
I will base my answer on the current scenario and threat assessment which provides a snapshot of where the gaps may be. The traditional southern route for heroin trafficking from the Makran coast to the East African coast has diversified over the past two years with an emerging Red Sea route and Eastern Axis route to the Maldives and Sri Lanka.
The Eastern axis of the southern route to the Maldives and Sri Lanka seems to have increased with regular shipments of heroin arriving in South Asian destinations for onward travel. From December 2018 – April 2019 drug enforcement authorities in Sri Lanka seized over 1500kg of heroin with several operations conducted at sea. The traditional southern route remains active with the Cabo Delgado region in Northern Mozambique becoming the key drop-off point on the East African coast.
The emerging radicalisation in the region indicates a possible nexus between heroin trafficking networks and support for violent extremism. The recent initiatives facilitated by UNODC have helped the governments of Mozambique, South Africa and Tanzania develop a trilateral strategy to counter drug trafficking via maritime routes. The trilateral strategy, which was endorsed in March 2019, involves the establishment of a Trilateral Planning Cell (TPC) in Maputo bringing together liaison officers from the three states to support joint investigations and operations against transnational networks operating in the region.
Alongside ivory, charcoal, sugar, and people, drugs are another trafficable commodity that offers an economic reward for terrorist groups. A 2018 study by Mariya Omelicheva and Lawrence Markowitz found that although there is considerable evidence that the narcotics trade is a source of revenue for terrorist groups, its substantive impact on finances is probably limited although increasing. Unreliable data also makes it difficult to assess the true extent of these interactions. But to limit the capacity of terrorist groups to inflict harm on people in East Africa and around the world, targeting these revenue streams is key.
Omelicheva and Markowitz’s study explains how international trafficking gangs and terrorist groups interact both directly and indirectly. Directly, terrorist groups often levy taxes from drug producers and traffickers in the areas they control. Though this usually contradicts their ideological narratives, taxation can be a lucrative form of income. Moreover, terrorist groups and trafficking gangs sometimes opt to work collaboratively in areas where the former controls territory. For example, Al-Shabaab in East Africa are reported to have facilitated the movement of drugs north across the Sahara by offering protection for traffickers in exchange for money.
Indirectly, the effects of drug trafficking on a country’s socio-economic environment can help create conditions which terrorist groups exploit for recruitment purposes. There is a strong correlation between the prevalence of drug trafficking and elevated levels of drug use at both national and local levels, largely due to increased domestic demand for illegal drugs in these areas. The Tanzanian Defence Minister has previously expressed concern about young people from Zanzibar and other Tanzanian regions joining Al-Shabaab in Somalia. The same can be said of Kenyans living in the Kenya-Somali border regions and the coastal region.
But while the marriage of convenience between drug traffickers and terrorist groups in East Africa has been recognised by academic research and security analysts, estimating the true extent of this relationship is difficult. If close to 40 percent of the heroin sold in Europe is trafficked through East Africa, then Al-Shabaab and ISS will almost certainly benefit from this, using it to finance their operations in the region (such as recent attacks on an African Union military base near Mogadishu). Should intelligence capacities be increased in the region and naval forces continue to impound large quantities of illegal drugs before they reach the shores of East Africa, crucial revenue streams for extremist groups may be minimised while also reducing the supply for domestic drug users on the continent.
On 11 December 2020, the Honorable Chief Justice and President of the Supreme Court in Kenya, H.E. David Maraga, inaugurated the Kahawa Law Courts in Kenya, the first-ever specialised counterterrorism court built by UNODC with generous financial contributions from the United States of America and the United Kingdom, which incorporates a rehabilitation and reintegration programme with the Kenyan Prison System, allowing prisoners to contribute to the physical construction of the court complex in full respect of human rights standards. The Kahawa Law Courts may serve as a model mechanism to investigate and prosecute Al-Shabaab networks while also paving the way for the rehabilitation of recent Al-Shabaab recruits who may be reintegrated into their respective communities after having learned new skills (e.g. masonry, carpentry, electrical engineering etc) to avoid their full recruitment by terrorist groups.
The UN and other international organisations have implemented projects to prevent corruption in public procurement through technology. How successful have these projects been?
The UN Development System is already refocusing its technical assistance towards blockchain solutions and artificial intelligence (AI) thus supporting member states in the region to install a single public procurement platform in an encrypted blockchain. The UNODC is working with the Kenyan authorities to align the most innovative responses while implementing the UN Convention against Corruption (UNCAC), which is the most comprehensive universal legal framework to fight corruption. The UNODC, together with the UN Development System, is already making in-roads in bringing blockchain solutions to the fight against corruption and money laundering in Eastern Africa and the Western Indian Ocean. In Mauritius, for example, the UNODC and the UN Resident Coordinator, have been closely working with the Prime Minister, the Financial Service Commission (FSC), the Economic Development Board (EDB), the Central Bank of Mauritius (CBoM), and other government actors, to join forces with the private sector in Switzerland to establish the first-ever sustainable development goal (SDG) FinTech platform which incorporates a state-of-the-art e-wallet (PayByDodo) and a FinTech Xange which are leveraging knowledge and financing from partners such as the NASDAQ in New York, while synchronising transparency in every transaction and full accountability.
In Kenya, the UNODC, with support from the European Union-funded PLEAD project, is supporting the judiciary towards full digitalisation in 2021-2022; and based on this success, UNODC is now looking at leveraging the power of blockchain solutions in public procurement.
What are your views on the peace-development nexus in the Horn of Africa – particularly in Ethiopia, Eritrea and Somalia? Should the international community invest more resources in the region? What will the return-on-investment be if international partners support the UN Development System? What are the possible scenarios?
We would first need to understand the concept of “Horn of Africa” as a region of Eastern Africa. It is the easternmost extension of African land and I would define it as the region that is home to the countries of Djibouti, Eritrea, Ethiopia, and Somalia, whose cultures have been linked throughout their long history. In a post-Covid-19 era, starting in March 2021, we would however need to consider a broader definition of the Horn which includes all the countries mentioned above, as well as parts or all of Kenya, Sudan, South Sudan, and Uganda. Part of the Horn of Africa region is also known as the Somali peninsula; this term is typically used when referring to lands of Somalia and eastern Ethiopia.
We would need to assess two axes: the economic outlook of the region as part of Eastern Africa; and the political dynamics of the Horn. Economic disruption caused by the Covid-19 pandemic has pushed East Africa’s growth projection for 2020 down to
1.2 percent, a rate that outstrips other African regions and is forecast to rebound to 3.7 percent in 2021, according to the African Development Bank’s East Africa Regional Economic Outlook 2020. The projection is under the baseline scenario that assumes the virus is contained by the third-quarter of this year.
Prior to the Covid-19 pandemic, the region’s economic growth was projected at more than 5 percent, well above the continent’s average of 3.3 percent and the global average of 2.9 percent. However, Covid-19 induced shocks and a locust invasion have contributed to job losses, increased humanitarian needs and will aggravate poverty and income inequality. In the worse-case scenario, in which the pandemic persists until the end of 2020, growth is projected at 0.2 percent, still above Africa’s predicted average of -1.7 percent and -3.4 percent under the two scenarios.
The state of Eritrea has made serious and concrete efforts to consolidate peace, stability and rule of law in the last few years. In July 2019, the government of the state of Eritrea and the UNODC signed a framework cooperation agreement to implement a joint programme which aims to reduce crime and victimisation in Eritrea; promote the rule of law and protect human rights; combat transnational organised crime and enhance the gender-sensitivity and inclusivity of the justice sector and law enforcement agencies. This is a historic momentum that the international community cannot miss. The EU is currently working with UNODC and the government of the state of Eritrea to maintain this political momentum and leverage funding to support this decision by the government in Asmara.
Thirdly, I am of the humble opinion that the UN Development System is palpably multiplying efforts to support the government of Somalia to fight Al-Shabaab and its proliferation of illicit financial flows while consolidating rule of law and peace in the federation. The international community must take this momentum as a shared responsibility to contribute to these joint efforts spearheaded by the government of Somalia.
By the same token and following recent talks between the UN Resident Coordinator and the Prime Minister of Somalia, it appears that the federal government is moving forward on international commitments, including in particular on the UN Convention against Corruption (to which Somalia has not yet acceded). Prime Minister Mohamed Hussein Roble has recently confirmed that this is one of the national priorities, that they have received and continue to receive substantial assistance from UNODC in this regard, and that they expect to accede to the Convention in the early part of 2021. Additionally, President Mohamed Abdullahi Farmaajo has indicated that he would like to attend the UN General Assembly (UNGA) Special Session on Corruption in June 2021 which is a crucial sign heading in the right direction whereby a member state is taking the fight against corruption seriously as one of the best formulas for a sustainable economic recovery after Covid-19 in 2021.
In this context, let’s take the return-on-investment as a socio-economic barometer, calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100. Then, for every dollar invested in this region in strengthening rule of law, peace and security; the return on investment would be $10,000 in terms of new economic opportunities in youth employment (thus preventing violent extremism and irregular migration); inter-regional trade; the establishment of innovation platforms and public-private sector partnerships; and the contribution of this region towards the African Continental Free Trade Agreement (AfCFTA).