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Kleptocrats, Ghost Troops & Vanished Billions
Inside the economics of collapse—where the aid goes and who gets rich.
Philip Saparov
July 14, 2025
Greetings, seeker of buried truths and global signals.
When a nation falls, the world watches the chaos — but few follow the money. Who profits from collapse? Where does the aid go? And how do black-market economies outlive their governments?
This edition pulls back the curtain on the economics of failure — exposing billions lost, lessons ignored, and warnings every stable country should heed.
Let’s dive in. The fall is just the beginning.
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When a state fails, it doesn’t stop operating — it just stops playing by the usual rules. Formal institutions vanish, but informal ones thrive. Welcome to the underground economy, where bribes are more useful than ballots and barrels of oil move faster than ballots.
Consider 🇸🇴 Somalia, where the government disintegrated in the early 1990s. What filled the vacuum? Warlords, pirate syndicates, and off-grid tax collectors. A country without a functioning bank still moves millions daily — through hawalas, smuggling, and armed coercion.
Or 🇸🇸 South Sudan, flush with oil yet drowning in poverty. Oil profits, instead of building infrastructure, flow into offshore accounts and private militias. And 🇻🇪 Venezuela — once Latin America’s richest nation — now sees its economy ruled by military-controlled food networks and black-market currency dealers.
🕳️ Perspective punch: The World Bank estimates up to 40% of aid to fragile states is siphoned off before it reaches its target. In economic collapse, disappearance is a budget line.
What if corruption wasn’t a side effect — but the point? In many failed or failing states, national budgets are engineered not for the public, but for personal gain.
Take 🇬🇶 Equatorial Guinea, where a small elite lives in opulence while most citizens survive on less than $2 a day. The president’s son — a government minister — once bought a $30 million Malibu mansion and a collection of luxury cars using looted oil money.
In 🇦🇫 Afghanistan, audits revealed ghost schools, phantom teachers, and imaginary police — all drawing salaries from international aid. Billions in assistance turned into blank checks for shadow networks.
🇭🇹 Haiti offers another cautionary tale. After the 2010 earthquake, nearly $13 billion in aid flowed in. A decade later, many neighborhoods still lack clean water — but politically connected firms got rich off contracts with little oversight.
💡 Eyebrow-raiser: The U.S. once sent $175 million to support “ghost troops” in Afghanistan — soldiers who never existed. The payments? Cashed by corrupt commanders.
Humanitarian aid is meant to save lives — but in failed states, it can also prop up tyrants, fund warlords, or distort fragile markets.
In 🇾🇪 Yemen, both government forces and Houthi rebels have intercepted food shipments, turning emergency aid into leverage. Locals sometimes have to pay bribes — or pledge loyalty — to receive it.
In 🇸🇩 Sudan, the military elite have long used international aid as political capital, redirecting funds toward patronage networks while civilians face hunger and poverty.
And in 🇨🇩 DR Congo, food aid often floods local markets, unintentionally undercutting local farmers and creating dependency.
🔥 Lesson in irony: Between 2005 and 2010, over $1 billion in international food aid intended for Somalia was diverted — some of it by the very warlords who caused the famine.
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In the ashes of failed governance, black markets flourish — not as fringe elements, but as the new economy. These markets are not always criminal, but they are always unregulated, and often more functional than the “official” system.
In 🇱🇾 Libya, after the fall of Gaddafi, oil fields, weapons depots, and human trafficking networks were carved up by militias. Those with the most firepower gained the most revenue.
🇲🇲 Myanmar’s military-linked elites profit from jade mining and narcotics, while civil war rages. These industries fund both government forces and ethnic militias — creating a deadly economic loop.
And in 🇸🇾 Syria, smuggling networks now control trade in everything from wheat to medicine, with local warlords setting prices and taking cuts.
📊 Stunning stat: Venezuela’s black market has grown so robust that many citizens use underground apps and social media to access daily essentials like diapers and insulin — faster and cheaper than through official channels.
When a regime collapses, the debt doesn’t vanish — it sticks. But who pays it? And what if the people who signed the loan are long gone?
🇱🇧 Lebanon’s 2020 default triggered outrage and reform demands, yet billions remain unaccounted for. 🇿🇼 Zimbabwe, mired in hyperinflation and governance breakdowns, has danced in and out of debt default for decades.
Then there’s the most famous case: 🇷🇺 Russia. After the USSR dissolved, Russia voluntarily inherited $100+ billion in Soviet debt — a political move to maintain legitimacy on the world stage.
💸 Surprising insight: “Odious debt” — loans taken by despots for personal gain — is still legally enforceable in many cases. Meaning a nation’s poorest citizens can be held accountable for a dictator’s shopping spree.
Sanctions aim to strangle rogue regimes. But they often do something else: strengthen shadow economies and entrench the very elites they’re meant to weaken.
🇰🇵 North Korea’s economy is tiny and sanctioned — but its leadership still imports fine liquor, designer goods, and luxury cars via Chinese intermediaries. The elites thrive while the people starve.
In 🇮🇷 Iran, the Revolutionary Guard now dominates sectors like construction, telecoms, and oil — precisely because sanctions cleared out foreign competitors.
🇸🇾 Syria shows sanctions' unintended side: a destroyed currency and a growing black-market economy that favors the well-connected.
🧩 Strange reality: Sanctions may make life harder for citizens — yet elite goods (Rolexes, Bentleys, iPhones) often find their way into the hands of regime insiders.
No nation collapses overnight. The fall is a slow-motion event, preceded by signals — signals that are often ignored.
Take 🇱🇰 Sri Lanka. A debt-fueled infrastructure binge led to a sovereign default and massive protests. Or 🇦🇷 Argentina, where inflation, currency instability, and poor fiscal governance are persistent threats.
Even in developed countries, the cracks can show: weakening public trust, rising inequality, and eroding institutions can foreshadow larger problems.
📉 Insight to remember: Every failed state today once had a functioning parliament, central bank, and media system. The difference is erosion, not explosion. Transparency, oversight, and accountability are not luxuries — they’re life support systems for a nation.
Collapsed states don’t just crumble — they expose what happens when power masks decay. Behind every collapse lies a money trail, a warning missed, a system rigged to fail.
For stable nations, these are flashing signals. Follow the money. It never lies.
Stay sharp. Stay curious. Keep looking deeper.
Warm regards,
Shane Fulmer
Founder, WorldPopulationReview.com
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