Money laundering is not structured to gain supplementary financial assets. More often than not, a portion of the monies is actually mislaid during the laundering process. All that a launderer desires to do is to suppress the origins and destinations of dirty money, and ultimately to push those illegally gained financial assets back into the legitimate economic and financial system. Clearly, launderers invest in many varying projects, ranging in differing aspects. Most of these investments are parted to another countries economic system, as to invest in the country where the monies originated from would not be efficient. For a majority of these countries, they are in emerging markets, seeking investment to spur their growing economy. However, the investment typically causes a redirection of funds from what could be called “solid” investments that promote economic growth to ones that are not of the same caliber and quality. Rather, investments are often made in short-term high risk projects (see graph below). In this sense, it is certain that economic growth will not be at its peak, as habitually these unstable projects fail to generate any type of permanent development. Instead, they produce a short spurt that generates more problems than positive outcomes.
There are abundant examples of countries that have had massive financial projects which have been financed by money laundering, however these projects still remain short-term and low quality. An emerging economy needs to be invested with concrete funding that can supply expansion within it’s own system.
Such industries as construction firms and hotels have a prevalent history of being funded by money laundering, creating a mirage of growth in these industries. A construction firm can be used for obvious physical construction within the country, and hotels can cater to a possible cultivating tourist industry. The issues with these businesses is that when they are no longer profitable or simply not necessary to the needs of the launderer anymore, these businesses are left and these economic sectors collapse. Most of these business do not even have an actual demand, however, they are simply for the sole purpose of laundering money. When the launderer no longer finances them, the economic results can be grave. The firms are shelled to the point that they are virtual, being only a name that says to provide a specific service, even though there is no real, legitimate service. Papers can be manipulated to show sales, which is actually laundered money, allowing a claim it profit, making it legal to enter those gains into the legitimate economic sector.