Counterfeit Goods Trade $775 Billion Industry
The black and gray economy continues to be booming, a lead story of the young 21st century. The counterfeit good trade is as lively as ever, and covers an array of goodies from shoes, handbags to medicine and pesticides, making it a key element of the growing superpower of the underground economy. The fake product industry is overwhelmingly large, according to a report by the Organization for Economic Cooperation and Development, which puts the value of the market of just the goods that crossed international borders at more than $250 billion in 2007. That makes it much larger than other underworld economy markets like weapons, smuggling and human trafficking. The counterfeit goods market even rivals the international trade in illegal drugs.
The International Chamber of Commerce, factoring in the counterfeit market within countries, plus the value of pirated digital material, estimates counterfeit goods were worth $650 billion in 2008. The ICC also claimed that the cost of lost tax revenue and additional welfare spending arisen from the counterfeit goods market was an additional $125 billion in developed countries alone. And 2.5 million jobs are claimed to be lost in the real economy due to fake products. The value of counterfeit goods is expected to be, by 2015, more than $1.7 trillion. That’s more than 2% of the world’s present overall economic output.
Fake goods growth has followed the overall growth of the global economy and outsourcing. With production moving further away from companies headquarters, there is more margin for counterfeiting the products/borrowing from the manufacturing process. With India and China building increasingly sophisticated factories, the type of products that can be counterfeited there rises indeed. Apparel and fashion accessories still comprise the largest share of counterfeit goods across the planet, but detection of fake consumer products, like electronics, chemicals, and pharmaceuticals are on the rise as well. But, the counterfeit goods market is staggering. For instance, in some areas of Europe, more than 25% of the pesticide market is estimated to be counterfeit, according to University of Florida numbers. Most of the fake pesticides originated in China. These really cannot be too much of a concern, considering the public knowledge of the damage done by pesticides made by companies like Monsanto.
A UN report names phone medicines as the “greatest concern” in terms of counterfeit goods, not only because they can result in the deaths of people using them, but their sometimes insufficient doses can lead to dangerous pathogens making them resistant to even the white market versions of the drugs.
“You have tests of anti-malarials in Africa and Southeast Asia that show very high shares – in some cases more than half – of the drugs in circulation are ineffective,” said Ted Leggett, a researcher at the UN’s Office on Drugs and Crime. Many of those drugs were shown to have insufficient levels of medicine, according to Leggett.
“In 2010, malaria killed more than half a million people,” he said. “It’s a curable disease if people receive real medication,” he told CNN.