The magnitude and consequences of money laundering

Abstract

Purpose This study aims to estimate the amount of money laundering (ML) with multiple proxy approaches and measure the effects of ML on various indicators of the economic and financial sectors. Theoretical justifications are recruited from the parasite theory of organised crime. Design/methodology/approach A quantitative research methodology was used on a balanced panel data set to test the study’s hypothesis through generalised method of moment (GMM). The study sample consisted of 77 countries, and the data was collected for 15 years (2005–2019). Findings A study has found that 1.23% of global gross domestic product is laundered yearly, and there is no noticeable decline in ML activities. Further study has also found that ML has devastating effects on countries, government revenue, foreign investment, economic development, political and peace conditions, bank liquidity, interest rate volatility and exchange rate volatility. The study has not witnessed the negative consequence of ML on countries’ inflation rates. Practical implications Estimates of the study guide policymakers about the volume of resources fleeing and helps them to decide the level of response needed. Further findings help them prioritise the response system according to the area most affected. Originality/value This study is an original contribution by the authors and has studied the effects of ML by computing the amount of ML by four different proxies.

Limitasi Tindak Pidana di Bidang Sumber Daya Alam sebagai Tindak Pidana Asal Pencucian Uang di Indonesia

“…111. 56 65 Pernyataan ini didukung oleh kajian Nazar, Raheman, & ul Haq (2023), bahwa pencucian uang memiliki dampak negatif terhadap pendapatan pemerintah, investasi luar negeri, pembangunan ekonomi, stabilitas politik dan perdamaian, likuiditas bank, volatilitas suku bunga, dan volatilitas nilai tukar. Selanjutnya lihat: Sadia Nazar, Abdul Raheman, Muhammad Anwar ul Haq, "The magnitude and consequences of money laundering", Journal of Money Laundering Control,11 January 2023, https://doi.org/10.1108/JMLC-09-2022-0139.…”

Application of Universal Jurisdiction Principles to Cross-Country Money Laundering

“…Indonesia, akin to Ukraine, has encountered the distribution of unlawful money laundering valued at 600 billion dollars in the past decade. The global extent of expenses incurred due to cross-national money laundering has tallied at 2-5% of the Gross Domestic Product (GDP) (Budiantoro, 2016;Sarigul, 2013;Nazar, Raheman, & ul Haq, 2023;Beebeejaun, & Dulloo, 2023). Indonesian fugitives have stashed corrupt proceeds amounting to IDR 600 trillion in Singapore (Atmasasmita, 2004).…”