Crime and Money Laundering: The Indian Perspective By Jyoti Trehan, Oxford, Rs 450

What is money laundering? It is giving ill-gotten wealth and income some measure of legality in order to escape the tax net and other possible punishments. Those who accumulate such wealth have to try to launder their money at least partially, because economic activities cannot always be conducted in secret. This is one of the few attempts at a systematic treatment of this tricky subject. The author divides the work into five parts; the relation between big crimes and big money, the process of laundering money, its impact on national security and economic liberalization, recent advances and laws and the role of international and regional organizations and expert bodies.

In India and across the world, many processes of money laundering are at work. Some are traditional, while the rest are of relatively recent origin. The author familiarizes the reader with the acts and regulations relating to money laundering, and their limitations. He also discusses how economic crimes might increase in economies moving towards greater degrees of privatization. Among the international money-laundering methods, such as placement of money in financial havens, conversion of money into securities, surfing and so on, particularly interesting is Trehan?s treatment of underground banking systems. He also shows how latest advances in information technology are used by the money-launderers.

Interestingly, Trehan?s idea of communism belongs to the school which equates communism with state control only, while his definition of terrorism echoes the one formulated by George W. Bush and his men. Terrorism, in its global or local forms, increases the incidence of economic crimes. In India, civil liberties? groups often complain about state-sponsored terrorism, which Trehan does not examine. Neither does he probe the alleged CIA and KGB activities in India, where huge sums of money are supposed to have changed hands. In the Indian context, the author has focussed on the corrupt practices of politicians and bureaucrats, but for some unknown reason, has spared the police. Trehan?s political belief has sometimes come in conflict with his observations on ?black money?.

The Nehruvian pattern of growth could not solve many basic problems, albeit its rhetoric of socialism and the establishment of the public sector. Its record in tackling the problem of inequalities was particularly poor. It is interesting that Amartya Sen, notwithstanding his admiration for Nehru, has noted the awfully bad performance of India in this respect.

But whether the new economic reforms constituted a better alternative is open to question. Despite official claims, there is no indication that the problems of poverty and inequality have been solved in any significant measure. The author has conceded, ?All the perils indicated so far in the economic liberalization reform process would lead to generation of larger proceeds of crimes and also laundering of the same on a more extensive scale.? In the Indian context, the author has recommended a sustained effort to turn trade deficits into surplus, but has not suggested how this can be achieved.

Globalization certainly plays a big role in the proliferation of economic crimes. No big country has been able to check it successfully. So the hope of eliminating economic crimes and money laundering across the world within the framework of globalization is largely illusory.