Humans. The lockdown on national borders is most likely also dampening cross-border human trafficking for labor and sex. Total actions taken against “inadmissibles” identified by US Border Patrol and the Office of Field Operations have declined by over 30 per cent over their previous three-year averages, though this statistic may well be a poor proxy for trafficked people, a subset of a broad category consisting mostly of willing migrants (also reduced in number), asylum seekers, and refugees.
Demand for sex and labor is likely to be more elastic than for drugs, however; prices may not rise as steeply in response to falling supply as they might in the latter case. The demand for labor is likely lowered dramatically given the associated economic downturn. Nevertheless, the Pan-American Health Organisation has warned that school closures put more children at risk for exploitation, and that the electronic forms of supply capable of overcoming borders at little personal risk or expense – e.g. child pornography websites – are on the rise.
Moreover, humans being smuggled or trapped outside their country of origin may find themselves at higher risk of abuse by host communities and their smugglers, or stuck in transit countries where the COVID risk may be elevated.
Counterfeit and unsanctioned medications and equipment. Due to conflicting information coming from positions of authority, including US president Trump, international attention has recently focused on the use of hydroxychloroquine, a medication approved for use in treating arthritis, lupus, and malaria, to treat SARS-CoV-2. With demand soaring (despite lack of scientific evidence on efficacy and potentially deadly side effects), the black market has picked up the slack, offering pills at 43 times their usual rate. However, hydroxycholroquine is not the only drug subject to black market exploitation.
A parallel cyber trade of questionable COVID-19 “cures”, medical supplies, and therapeutics have created a wave of misinformation, scams, and possible public harm on the internet. Penetration of these suspect products ranges from FDA warnings against the use of colloidal silver products , multiple claims of herbal products to treat and cure COVID-19, and even claims that oregano, cow dung and cocaine can be used with positive effect against the disease.
Fake COVID-19 testing kits have also been detected in large volumes on social media platforms such as Twitter and Instagram, at a time when demand for these products clearly outstrips availability due to the uneven roll-out of testing in the US.
Recently, USCBP seized over 1,000 counterfeit COVID-19 rapid tests, found on an individual traveling from Mexico, as just one example of increasing seizures of unsanctioned COVID-19 products and supplies. The problem is widespread, with popular commercial platforms such as Amazon and eBay also attempting to detect and remove this content with mixed success.
Similarly, opportunities for trade of fake medications have also activated other digital black markets, such as the Darkweb, with studies and our own research finding availability of several COVID-19 drugs such as hydroxychloroquine, fake vaccines, and even blood plasma from recovered COVID-19 patients.
A listing for hydroxycholoroquine on a dark web marketplace.
Wildlife (in Africa). One would hope that the reassertion of national borders and dampened trade would also dampen human demand for endangered species and other wildlife. Unfortunately, while that may be, overall supply seems to have increased. The collapse in megafauna tourism (“safaris”) in sub-Saharan Africa has already economically devastated many local economies.
Many traditional tourist areas are now affected by rhino poaching that were previously protected by tourists’ presence and spending. The former discourages poachers; the latter encourages locals to preserve and invest in their biotic patrimony rather than liquidate it. The black market has substituted for the beneficent, licit one. Evidence abounds that economies once geared toward war are difficult to wean off of it; the same might be argued of those geared toward violence against non-humans.
Guns (in the US). Small arms manufacturers in the US produce (and export) more guns by economic volume than those in any other country in the world – about as many as those in the next four largest country producers combined (Russia, France, Germany, and Spain, respectively). Demand for guns abroad has slumped, thanks to declines in violent conflict (down by about 20%) and criminal violence around the world.
Despite expectations that the pandemic might exacerbate social unrest, it coincides with significant declines in the incidence of battles between state and non-state groups, violence against civilians, and even riots and protests in many conflict-affected countries. Government quarantines and curfews also contributed to sharp reductions in homicide, violent assault and most forms of property crime, including in many US cities. But the US is also the world’s largest consumer of small arms, and has by far the largest civilian market in arms.
COVID-19 has prompted a rush on arms within the U.S. – sales were up by 85 per cent in March over the previous year according to Small Arms Analytics and Forecasting. This boom has rocketed the stock market valuations of publicly traded arms companies at rates enjoyed by, say, Zoom: Smith & Wesson was up over 60 per cent over the two months after 10 March (when COVID-19 lockdown fears began to mount in the US). This is not the black market, though it spills over.
Reports are emerging that the National Instant Background Check System is experiencing a backlog of tens of thousands of would-be purchasers. Incredibly, if a background check stalls for over three business days, the store is usually legally permitted to proceed with the sale. As a result, the COVID-19 crisis may facilitate the spread of literally hundreds of thousands of poorly monitored sales, including many that end up in the wrong hands. This is troubling both because of the thriving cross-border black market that supplies US guns to Mexico and other Latin American countries, and due to the interactive effects that unemployment, isolation and firearms may have on suicide rates.
Meanwhile, the pandemic has hindered United Nations Office of Drugs and Crime programs aimed at preventing small arms trafficking in developing countries.
Black markets facilitate the transfer of numerous goods and services that violate human and animal rights, promote violence and degrade health. As we seek effective policy approaches to slow and stop the pandemic, we must be cognizant of their unintended consequences on these illicit trades.
This blog was written by:
Topher McDougal is Associate Professor of Economic Development & Peacebuilding at the Joan B. Kroc School of Peace Studies at the University of San Diego, and co-founder ofthe Small Arms Data Observatory, a platform for original research on small arms markets and use.
Timothy Mackey is Associate Professor at UC San Diego’s School of MedicineandCEO and co-founder of healthcare startup S-3 Research funded by theNIH to detect and characterize illicit drug diversion on social media platforms and the dark web.
