Legal Aspect to Ensuring Sustainable Development in Jordan: Countering Crime and Shadow Operations

The study of modern literary sources on the topic of countering shadow operations in the system of ensuring sustainable development from the socio-legal aspect is crucial for understanding the complexity and scale of this problem. The modern world is characterized by rapid changes in the economic landscape, technological progress and globalization processes, which directly affect the development of shadow economic relations. Particular attention to the analysis of the latest scientific works and research allows not only to identify current trends and challenges faced by the world community in the fight against the shadow economy but also contributes to the development of effective strategies and mechanisms for its minimization. This, in turn, is key to achieving sustainable development, since ensuring economic security, social justice and environmental sustainability is impossible without taking into account and effectively managing the risks associated with shadow activities.

So, in the study by Sylkin et al. [1] methods of anti-crisis management are explored in the context of the financial security of an enterprise. The authors consider strategies to effectively counteract crisis phenomena that may be associated with the activities of the shadow economy. This source provides a theoretical framework for understanding the relationship between crisis management and strengthening financial security, which is critical for sustainable development.

At the same time, Alazzam et al. [2] analyze the legal challenges of e-commerce, which are important in the context of the shadow economy, as the digitalization of trade opens up new opportunities for informal transactions. The study suggests ways to address these challenges in Jordan and other jurisdictions, highlighting the need to adapt legislation to combat the shadow economy in e-commerce.

Polese et al. [3] in their article review the results of a study of the shadow economy. They highlight the potential for further research on information awareness and its impact on sustainable development. This work is important for understanding the specifics of post-Soviet countries in the context of the shadow economy and identifying ways to minimize it.

An interesting study by Williams and Horodnic [4], who in their work analyzes the shadow economy in the Baltic countries from the standpoint of the morality of taxation. The authors explore how attitudes toward taxes influence the size of the shadow economy, offering insights into how it can be reduced through improved tax morale, which is important for sustainable development.

The work of Santini et al. [5] attention is paid to the phenomenon of limited government and information management. This source highlights the impact of the information economy on sustainable development in countries with limited statehood, which has implications for understanding shadow transactions in a broader regional context.

At the same time, Rushchyshyn et al. [6] analyze the regulatory and legal aspects of ensuring the financial security of the state. They focus on the importance of legal regulation to combat the shadow economy and strengthen economic security, which is key to sustainable development.

Cooley and Sharman [7] explore how corruption networks are blurring the lines between licit and illicit transactions at the transnational level, focusing on Central Asia. The authors point out the complexity of defining and combating transnational corruption, which reinforces the importance of developing effective international mechanisms to counter this phenomenon to ensure sustainable development.

At the same time, Sylkin et al. [8] in their work they analyze the financial security of engineering enterprises as a condition for the use of crisis management. The study highlights the connection between the financial sustainability of enterprises and their ability to effectively confront the challenges of the shadow economy, pointing to the practical aspects of implementing crisis management strategies.

Of particular note is the research by Alazzam et al. [9], which examines the main threats in legal practice to ensure environmental safety during the COVID-19 pandemic. The authors focus on the importance of legal practice in protecting environmental standards, which is important for countering shadow operations that can use crisis situations to circumvent environmental legislation.

Kulish et al. [10] in their work they explore the process of innovative relations in business activities with an emphasis on the economic and legal aspects of security at the macroeconomic level. The authors identify key factors contributing to the reduction of the shadow economy and the role of legislative initiatives in ensuring economic security, which is important for stimulating sustainable development.

Medina and Schneider [11] provide an overview of global research on shadow economies over the past 20 years, highlighting changes in approaches to measuring and strategies to combat this phenomenon. The authors provide valuable analysis of trends and challenges to help understand the dynamics of shadow economies and the importance of developing effective policies to enhance economic and social resilience towards sustainable development.

Kopytko and Sylkin [12] explore the dynamics of combating corruption within the economic security management system. They offer a modeling approach to information support systems that serve as a backbone for legal frameworks in this fight against corruption. The relevance of their findings to Jordan's context is undeniable, as it provides a methodological baseline for formulating strategies against economic crimes which are pivotal to ensuring sustainable development. In a study that complements the former, Aldrou et al. [13] delve into the administrative and legal factors that influence regional sustainable development. Their research is particularly pertinent as it provides a lens through which one can view the effects of external environmental changes on the legal scaffolding necessary for sustainable growth. Kryshtanovych et al. [14] shed light on the peculiarities of implementing governance in the system of social security. This work provides valuable insights into the administrative structures that can be leveraged to strengthen the connection between social security systems and sustainable development, a connection that is critical in the context of Jordan.

Hammouri [15] tackles the socio-economic measurement of security from a criminal law perspective, with an emphasis on the pursuit of justice in Jordan. The study provides a nuanced understanding of how the perception of justice and the enforcement of criminal law play a crucial role in ensuring a secure environment for sustainable development to thrive. The influence of cutting-edge technology in administration is explored by Kronivets et al. [16], who examine the legal foundations for utilizing artificial intelligence in educational processes. While not directly linked to economic crime, this study is germane to the discussion due to the transformative role education plays in shaping legal understanding and compliance, thereby impacting sustainable development. Shtangret et al. [17] investigate antisipative management in ensuring economic security at the enterprise level. Their findings underscore the importance of proactive management strategies in mitigating risks related to economic crimes, which is a cornerstone of sustainable development in a legal context. Alazzam et al. [18] propose a methodical approach to selecting business management strategies in light of commercial activity changes. The study is relevant to Jordan as it highlights the importance of adaptive business strategies in maintaining economic security under changing legal frameworks, a factor that can influence sustainable development. Albalawee et al. [19] emphasize the role of public administration in the economic security system through human rights protection. Their findings inform the dialogue on balancing economic security and human rights in a politically and legally dynamic environment, a balance that is fundamental to sustainable development. Yesimov and Borovikova [20] presents a discourse on the administrative and legal implementation of business entities' rights. They provide insights into the administrative scaffolding necessary for protecting business rights, which is an essential component of legal strategies to counter shadow operations. Finally, Alazzam et al. [21] examine the formation of an innovative model for e-commerce development, essential for the economic security of businesses. Their research has practical implications for Jordan, where e-commerce can be a tool for transparency and the reduction of shadow operations, thus bolstering sustainable development.

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Figure 2. The main gaps in modern research into the issue of criminal legal aspects of the impact of shadow business operations in the region on ensuring economic security and sustainable development

However, despite the significant amount of existing research on the topic of countering shadow transactions in the context of sustainable development, analysis of current literature reveals the existence of a number of gaps and shortcomings that require further study and correction (Figure 2). In particular, the lack of comprehensive studies covering the relationship between the shadow economy and various aspects of sustainable development, such as environmental sustainability and social justice, points to the need for a more in-depth interdisciplinary approach. In addition, the dynamic development of digital technologies and globalization processes constantly gives rise to new forms of shadow operations, which require constant updating of data and analysis methods. Thus, to develop effective strategies to cope and adapt to the changing economic environment, it is necessary to focus on addressing existing research gaps, ensuring that scientific developments are relevant and relevant to modern challenges.

Thus, the scientific task is to establish possible connections between the level of criminalization of the general level of security of sustainable development in the country and economic security.

4.1 SWOT-analysis of aspects of the impact of shadow business operations on ensuring sustainable development

The problems of corruption, weak law enforcement, and shadow businesses in Jordan are real due to a combination of historical, economic, and political factors. Jordan's strategic location has made it a hub for trade, including illegal activities such as smuggling. Economic challenges, including high unemployment and limited natural resources, create an environment where shadow businesses can thrive as alternative income sources. Additionally, bureaucratic inefficiencies and insufficient judicial oversight contribute to corruption and hinder the effective enforcement of laws. These issues are exacerbated by regional instability, which strains government resources and makes comprehensive reform and enforcement even more challenging. Together, these factors create a complex landscape where these problems persistently affect Jordan's path towards sustainable development (Table 2).

The prevalence of corruption, weak law enforcement, and shadow business operations in Jordan is fundamentally tied to systemic challenges within its governance structures and economic conditions. These problems are deeply entrenched due to a lack of rigorous regulatory frameworks and insufficient transparency in governmental operations, which allow illegal and unethical practices to proliferate. Economic hardships, such as high unemployment rates and limited economic diversification, push individuals and businesses towards informal economic activities to survive. This scenario is further complicated by political pressures and regional instability, which can divert attention and resources away from crucial reforms needed to address these issues effectively. Consequently, these problems continue to undermine sustainable development efforts in Jordan.

Table 2. SWOT-analysis of Jordan sustainability

4.2 PESTLE-analysis of aspects of the impact of shadow business operations on ensuring sustainable development

The first step of our research is PESTLE analysis, which is an important tool for studying aspects of the influence of shadow business in the region on ensuring economic security and sustainable development of the region since it allows us to cover and analyze various external factors affecting this issue. Due to its versatility, this method not only helps to determine how the criminal legal system and other legal aspects affect underground business but also takes into account the influence of political climate, economic conditions, sociocultural factors, technological innovation and environmental conditions (Table 3).

The process of shadowing business processes, caused by criminal actions, illustrates the transition of a significant share of the country's business activity to the informal sector associated with illegal actions and illegal operations. Such actions pose a serious threat to the economic security of the state since they occur outside the framework of legislation and tax regulations. This results in a loss of government tax revenue distorts business indicators and leads to economic instability. It also weakens legal business structures, increases risks for investors and negatively affects the country's economic growth. This process can undermine citizens' trust in the government and its ability to effectively manage the economy, an important aspect of the economic stability of any nation.

Table 3. PESTLE-analysis of aspects of the impact of shadow business operations in the region on ensuring sustainable development

Increasing trends in shady business processes in Jordan, particularly due to increased criminal activity, indicate serious challenges to the development of the country and society arising from these factors. This reflects crisis phenomena in the economy, politics and social life arising from the spread of new shadowing schemes. These processes have a significant impact on the increase in destabilizing factors, counteracting which is becoming increasingly difficult.

The need for in-depth research on the extent and dynamics of shadow business processes in Jordan for the period 2019-2023 is important, and identifying the main trends in their development is key. Figure 1 presents the results of the study demonstrating changes in the overall level of shadow business processes and their impact on real GDP in Jordan over this period. From the research data it is clear that there is no clearly defined trend in the country towards an increase or decrease in shadow criminal business activities.

Especially in 2020, as a result of the COVID-19 pandemic, the level of shadowing of national business processes increased, stabilizing at 27% in 2020 and 28% in 2021. These indicators reflect the growth of negative trends in the economy, politics and society with an increase in the integral indicator from 24% of the official. GDP in 2019 to 28% in 2021. The coronavirus crisis has created conditions for the expansion of shadow criminal business activities, especially stimulating the development of digital payment systems, which have acquired significant scale and become the basis for criminal economic transactions.

4.3 Key indicators of sustainable development in Jordan

In 2023, under the influence of the Israeli-Palestinian conflict, the situation with shadow business processes worsened. The conditions of the conflict contributed to the intensification of shadow criminal business activities in neighbouring countries, and new methods of shadowing led to an increase in illegal activities in the official sector of the national economy. It also contributed to increased corruption, a share of the proceeds of which was channelled to support shadow criminal economic activities, deepening the country's socio-economic problems and widening the gap between economic and social development (Figure 3).

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Figure 3. Level of criminalization of the economy in Jordan over the past 12 years

Corruption, identified as a key criminal offence, seriously undermines not only the economic security of the state but also its sustainability in the context of sustainable development. Because corruption undermines trust in government and public institutions, which are critical to good governance and the sustainability of a country, loss of trust can lead to political instability and a threat to the economic system. Corruption causes significant losses to the state through the illegal redistribution of resources and tax evasion, which reduces government revenues, undermines funding for sectors important to sustainable development, such as education, health and the environment, and causes growing social inequality. It also distorts market competition, reducing economic productivity and discouraging potential investors, both of which are critical to economic growth and sustainable development.

Thus, corruption becomes a significant obstacle to stable, equitable and healthy economic development, having a direct impact on a country's ability to achieve the Sustainable Development Goals (SDGs). The fight against corruption in Jordan, which is one of the main directions for reducing criminal activity and shadowy business processes, contributes not only to strengthening economic security but also ensures the ongoing management of resources, reducing inequality and creating sustainable economic growth.

The data analysis from 2019 to 2023, illustrated in Figure 3, shows a positive trend in Jordan's fight against corruption, with the corruption perception index increasing from 19 in 2019 to 23 in 2023. This indicates a steady improvement but also underscores the need for ongoing, vigorous efforts at every government level to enhance transparency and accountability. Projections for 2024-2025 suggest a potential further rise in the Corruption Perceptions Index, hinting at the growing effectiveness of anti-corruption strategies. This trend could pave the way for sustainable business practices in Jordan, ensuring a resilient future (Figure 4).

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Figure 4. % corruption in Jordan for the last 12 years with a forecast for the next two

4.4 The results of modelling

Our research revealed that during socio-economic and political crises in Jordan, not only the shadowing of business processes increases, but also the level of corruption increases, which undermines the foundations of the country’s sustainable development. The relationship between shady business processes and mutually reinforcing corruption points to the need to integrate anti-corruption measures into detection strategies aimed at continuously strengthening Jordan's economic security. Thus, when developing anti-corruption programs and strategies to combat the shadow economy, it is important to focus on creating the conditions for sustainable and inclusive economic growth. Actively combating corruption is critical to achieving the de-shadowing of Jordan's national economy, which will help reduce crime rates and stimulate sustainable development.

To further assess the level of economic security in Jordan that is important for sustainable development, our study covers modelling on key aspects:

Budget security. The relationship between the state budget deficit and surplus, the level of GDP redistribution, as well as service obligations and repay public debt as part of budget revenues, were analyzed, taking into account their impact on the sustainability of public finances.

Debt security. Included analysis of the ratio of public debt to GDP and external debt, which are key indicators of financial stability and sustainable development.

Cash safety. Indicators were considered that affect the stability of the national currency and the country’s ability to respond to external shocks, which is important for maintaining sustainable economic growth.

Currency safety. The level of international reserves and the stability of the exchange rate were analyzed since these are important aspects of ensuring foreign economic security and protection from currency fluctuations in the context of globalization.

Bank safety. Indicators reflecting the stability of the banking system, and its ability to withstand crises and maintain sustainable financing of the economy were considered.

Security of the non-bank monetary sector. The role of insurance and capitalization of companies in ensuring economic sustainability and stimulating investment for sustainable development was studied.

Each of these aspects is important to ensure the economic security and sustainable development of Jordan, allowing the country to better respond to the challenges of our time and ensure the well-being of future generations.

Consequently, Jordan's economic security has recently shown an overall decline in most of its aspects. In the area of fiscal security, fluctuations were observed, including changes in the state budget surplus or deficit, variations in budgetary and extra-budgetary funds, as well as fluctuations in the level of GDP redistribution and the ratio of payments for public debt to state budget revenues. Debt security has also come under pressure due to rising government debt relative to GDP, rising levels of gross external debt and changes in government bond yields and other economic indicators. Monetary security noted a decline due to changes in the ratio of cash outside the banking system to the total money supply, fluctuations in interest rates, changes in the structure of consumer loans and in the volume of financial resources exported outside Jordan.

Our research indicates that financial and socio-political instability significantly affects Jordan's economic and financial activities, leading to the proliferation of shadow business operations. As economic players move outside the formal sector, there is a consequent rise in criminal activities, including illegal trade, tax evasion, and other economic crimes. These activities hinder Jordan's sustainable socio-economic development. Therefore, it is crucial to develop and implement effective strategies to move business activities out of the shadow and enhance economic security, thus reducing business criminalization. Additionally, our analysis in 2023 demonstrates how the Israeli-Palestinian conflict influences Jordan's economic security, given its proximity to the conflict zone (as depicted in Figure 5).

The results of this study suggest that the increasing shadowing of business processes occurs during periods of declining economic security in the country. This emphasizes the importance of a detailed study of the factors contributing to the development of shadow economic processes and the search for effective approaches to strengthening the financial stability and security of the state (Figure 6).

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Figure 5. The level of integrated security in Jordan over the past 12 years

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Figure 6. Results of modeling the impact of corruption and security on shadow business over the past 12 years

An analysis of quality of life index data and poverty rates in Jordan for the period 2011-2023 (Table 4) points to an important link: as the proportion of the poor population increases, the quality of life decreases. Significant changes were identified in 2023, when poverty levels reached high levels, highlighting the critical need for socio-economic reforms and social support for vulnerable groups. These observations highlight the importance of integrating sustainable development principles into a country's policy decisions and development strategies. To improve the quality of life and reduce poverty in Jordan, it is necessary to focus on creating inclusive, sustainable and effective social programs that take into account the needs of all segments of the population, in particular ensuring access to quality education, healthcare, adequate housing and decent work. This approach will not only help solve pressing problems of poverty and quality of life but will also contribute to achieving sustainable development goals, in particular, reducing inequality, ensuring economic growth and improving the social community in the country.

Table 4. Quality of life indicator in Jordan over the past 12 years in the context of sustainable development

In 2020, Jordan experienced a rise in poverty due to the challenges posed by the coronavirus crisis and subsequent economic restrictions. By 2021, there was an improvement and stabilization of poverty levels. However, by 2023, influenced by the Israeli-Palestinian conflict and its severe impacts on the region, poverty levels and quality of life in Jordan deteriorated to critical levels. This situation led to significant refugee migrations, adding further strain on the national economy. These conditions highlighted the fragility of Jordan’s economic structure and resulted in an uptick in criminal activities, including human trafficking, illegal labor practices, and financial crimes. These trends, which underscore social disparities and financial system imbalances, urgently call for comprehensive strategies to address and mitigate these criminal threats.

To rigorously analyze how destabilizing factors affect the quality of life in Jordan, our study will utilize correlation and regression analysis to examine the impact of various elements including the criminalization of business processes, economic security, corruption, and poverty levels on the population's quality of life. We will conduct this analysis using Statistica 8.0 software. In our model, the quality of life index serves as the dependent variable (Y), while the independent variables (factors) are: $x 1$ - an integral indicator of business shadowing due to criminal activity in Jordan, $x 2$ - the level of economic security, $x 3$ - the extent of corrupt criminal actions, and $x 4$ - the poverty level among the population.

The findings reveal a strong linkage between these variables, evidenced by a high correlation coefficient (R=0.9) and further supported by the statistical significance of the model, with an F-test value of $F(5,7)=8.9$. Key statistical metrics include a determination coefficient $\left(\mathrm{R}^2\right)$ of 0.86 and a p-value of less than 0.0005. Each factor distinctly influences the quality of life index, displaying both direct and inverse relationships. Notably, increases in the shadowing of business processes, reflected by a regression coefficient $\mathrm{r}=0.15$, correlate with declines in quality of life. Similarly, higher poverty levels are linked to poorer quality of life, as indicated by regression coefficients $\mathrm{r}=0.09$ and $\mathrm{r}=0.103$. The detrimental effects of business shadowing—encompassing financial losses and heightened criminal activities like illegal trade and financial crimes—are emphasized. These findings highlight the need for a holistic approach to tackle these challenges, blending economic and social strategies (as shown in Figure 7).

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Figure 7. Sustainable development mechanism to counter shadow business and crime in Jordan

The findings provide empirical support for the creation and refinement of policies aimed at reducing the shadow economy. Legislators can use this research to draft more targeted anti-corruption laws and regulations that directly address the nuances of economic crime in Jordan.