Introduction[i]

The illicit business side of armed conflict can involve clandestine exports to fund combatants, reselling looted goods on the black market, smuggling weapons and other supplies, sanctions evasion and embargo busting, theft and diversion of humanitarian aid, and covert “trading with the enemy.”  How does such illicit business affect peace operations in conflict zones, and how do such peace operations, in turn, affect illicit business? I provide a preliminary answer in the case of the 1992-1995 war in Bosnia (one of the most brutal wars of the post-Cold War era and the site of one of the most ambitious and challenging peace operations ever attempted).[ii] Instead of reinforcing the common tendency simply to ignore or condemn the illicit business side of conflict and its relationship with peace operations, I stress the more ambiguous and double-edged nature of the issue.

Peace operations in Bosnia contributed to illicit business activities, but in some respects illicit business also contributed to a number of peace operations goals—including helping to sustain the civilian population and even bringing an end to the conflict. The end result was more of a symbiotic rather than exclusively predatory relationship between peace operations and illicit business activities.  Of course, one cannot broadly generalize about peace operations and illicit business from a single country case study. Nevertheless, the Bosnia experience starkly illustrates how peace operations can become deeply enmeshed in the illicit political economy of the conflict in direct and indirect ways, with perverse and unintended results.

How Peace Operations Can Contribute to Illicit Business

There are multiple ways—direct and indirect, intended and unintended—in which peace operations can be good for illicit business in conflict zones. Peace operations can have a structuring effect; providing a minimum level of stability and predictability can unintentionally facilitate illicit economic exchange. In other words, peace operations, including the presence of UN peacekeepers, can help to create a favorable “business climate” in the conflict zone.

This dynamic was especially evident in the case of the besieged Bosnian capital, Sarajevo, where the large UN Blue Helmet presence not only had a stabilizing effect on the siege lines (which became points of clandestine economic exchange) but also contributed to the enforcement of the siege through UN policing of the airport grounds, which became the most important entry and exit point for smuggling. The 800-meter-long tunnel that was eventually dug under the UN-controlled tarmac became both a lifeline for the city and profit center for illicit traders.

Similarly, certain forms of international interventions that are designed to inhibit conflict and foster peace—notably economic sanctions and arms embargoes—can generate enormous incentives for smuggling. Sanctions and embargoes inflate profits and create economic opportunity structures for those best connected in the underworld of covert commerce. This strengthens the hand of criminal actors, fuels cross-border black market networks, and encourages closer ties between political leaders and organized crime (which can become entrenched and persist long after the conflict is over).

This pattern was clearly evidence in the case of Bosnia and the other conflicts related to the breakup of Yugoslavia. In response to Belgrade’s support for the Serb military sieges in Bosnia, the UN imposed comprehensive sanctions on the Milosevic regime in May 1992. The effect was to criminalize much of the country’s economy. The sanctions also had powerful regional ripple effects, as formal trade relations between Serbia and its neighbors were severed but informal trade relations flourished. The UN also imposed an arms embargo on the entire region starting in 1991. The effect was to reinforce the already heavy Bosnian Serb military advantage and make the Sarajevo government dependent on black market supplies.

Peace operations can also indirectly support illicit business by injecting hard currency into a conflict zone (through rents, wages to local support staff and so on), which in turn may be used to purchase black market items for household survival. In wartime Bosnia, thousands of locals worked for the UN and other “internationals” as translators, drivers, secretaries, cooks, and so on. This provided desperately needed hard currency—which in turn helped support extended families and made inflated black market prices more affordable than would otherwise have been the case.

More directly, peace operations can be both a source of supply (the skimming and theft of relief aid) and a transportation mechanism (the use of aid convoys as a cover for smuggling arms and other goods) for illicit business. This dynamic was evident throughout Bosnia, ranging from the UN’s Sarajevo airlift to the truck convoys delivering relief aid by land throughout the country.  Some actors involved in peace operations can also become directly complicit in illicit activities—as bribe takers, transporters, informants, money couriers, brokers and intermediaries facilitating commerce between warring parties, and sometimes even consumers (such as those frequenting brothels). The Ukrainian contingent of the UN peacekeeping forces were especially notorious for engaging in black market dealings, exploiting their mobility and access across the lines.

How Illicit Business Can Contribute to Peace Operations

The illicit business component of conflict is typically viewed as an obstacle to peace operations because it helps to create and sustain the material basis for war and reduces incentives for peace. Criminal enterprise, in this view, is a “peace spoiler,” creating a more challenging operational environment. But far less recognized is the reality that, in some circumstances, illicit business in conflict zones can also help peace operations attain some of their objectives.

Importantly, wartime black marketeering can provide a supplement to woefully inadequate humanitarian aid (albeit at highly inflated prices), helping to sustain the civilian population. In the case of Bosnia, none of the countries besieged enclaves survived on humanitarian aid alone—and indeed the UN rarely met its supply goals. This necessitated more informal supply mechanisms such as smuggling. While those in charge of the UN’s peace operations in Bosnia formally opposed such smuggling, the awkward reality was that the black market was helping to compensate for inadequate levels of aid. This was often left unstated.

Finally, it should be acknowledged that in some circumstances, illicit business can even help peace operations end conflict. Most notably, illicit business in the form of arms smuggling can contribute to the termination of war by shifting the military balance, breaking a stalemated military situation and helping to create the necessary conditions for a negotiated peace. This was clearly evident in the case of Bosnia. The growing strength of the Bosnian army partly reflected the accumulation of black market weapons in violation of the UN arms embargo. Thus, while the embargo aimed to contain the conflict and encourage peace, the very failure of the embargo as a result of smuggling eventually contributed to ending the conflict. The terms of the Dayton Peace Agreement largely mirrored the smuggling-enabled shift in the military balance on the ground.

Post-War Extensions

The conventional wisdom is that those who profit most from conflict have a financial stake in its perpetuation and are therefore often labeled as “peace spoilers.” This is no doubt true in many cases. However, as evident in Bosnia, a different dynamic is also possible; one in which war profiteers can become stakeholders in peace. Many of those who did well from war—through theft and diversion of aid, sanctions evasion, arms trafficking and other forms of smuggling—were in the most privileged position to take advantage of the post-war rebuilding process. For many of Bosnia’s new elite, “startup funds” were generated through war, but continued wealth accumulation was not necessarily dependent on the continuation of war. Theft of reconstruction aid, questionable privatization deals and construction contracts, sex trafficking (with peacekeepers as a core clientele), migrant smuggling, the movement of contraband goods across minimally policed borders, and so on defined the clandestine political economy of post-war Bosnia.


[i] This presentation is based on Peter Andreas, “Symbiosis Between Peace Operations and Illicit Business in Bosnia,” International Peacekeeping Vol. 16, No. 1 (February 2009). Also see Peter Andreas, Blue Helmets and Black Markets: The Business of Survival in the Siege of Sarajevo (Cornell University Press, 2008).

[ii] More than 100,000 foreigners, at least a dozen UN agencies, and over 200 non-governmental organizations participated in the humanitarian relief effort. By 1995, some two-thirds of all UN peacekeepers in the world were deployed in the region, with the number of troops in Bosnia reaching as high as 22,500.

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