Shadow economy's rising activity, impact

THE global economy, especially emerging markets, is growing much faster than official figures state.

The reason is that the underground, shadow economy, now accounts for an increasing share of economic activity. The shadow economy comprises people who can't find a full-time or regular job. People range from artisans, cleaners, gardeners, vendors and even specialists in IT and Web designs. These workers, who receive cash and either pay no tax or only a portion to the Inland Revenue Services (IRS), are part of this shadow, informal economy.

Since unemployment in developed nation members of the Organisation for Economic Co-operation and Development (OECD) has remained at around 47 million people and the International Labour Organisation estimates that globally the jobless total 202 million, masses of men and women scrape a living in the shadow economy. The underground economy also comprises drug dealing and other illegal activities which have boosted money laundering around the world. Legal and illegal immigrants who cannot obtain formal jobs and neither pay tax nor social insurance also tend to be participants in the informal economy.