Illegal Drugs

Excerpt From: Rischard, Jean-Francois.

“High Noon: 20 Global Problems, 20 Years To Solve Them.” iBooks.


“The world market for illegal drugs—some $150 billion retail, involving some 200 million users—is the world’s largest illicit market. Some believe it may be even larger, up to $400 billion all included. It is a huge market even in relative terms: about half the size of the pharmaceuticals market, and close to the tobacco and alcohol markets of $200 billion or so each. Of the $150 billion total, the United States and Europe account for $60 billion each—the two largest markets by far. In the United States, the total population of users has stabilized somewhat since the crack cocaine, cocaine, and heroin peaks in the 1970s and 1980s—but heavy users seem to be using more drugs and harming themselves more. And in many rich countries other than the United States, such as the United Kingdom, the numbers of both casual and heavy users are still rising.

Drug use is also rising in Russia and Eastern Europe, Asia, and now even Africa: crack cocaine has spread quickly since 1995 in South Africa, which may have the worst drug problem in that continent. And one easily forgets that Pakistan, Thailand, China, and Iran still account for most of the world’s heroin consumption. Drug trafficking now touches some 170 countries.

By contrast, production is concentrated in only a few countries. In 2000, about two-thirds of opium used for heroin production was from Afghanistan, and most of the remainder from Myanmar. Colombia accounts for two-thirds of cocaine production. Among synthetic drugs, the Netherlands and some Eastern European countries (Poland) are the world’s main producers of ecstasy, while methamphetamines are produced mostly on the U.S.-Mexican border and in places like Myanmar. Only cannabis, being more bulky and less valuable, is grown a little bit everywhere, near its markets. But synthetic drugs can also be manufactured almost anywhere, presenting a new, rapidly spreading phenomenon.

Like many other businesses, the illegal drug business has begun to reshape itself along the tenets of the new world economy, running more efficiently than ever—particularly when it comes to distribution. Colombian suppliers team up with Mexican smugglers with strong logistics skills. Small aircraft, global positioning systems, and cellular phones are put to systematic use; top managers with prestigious MBAs run the traffickers’ finance and money-laundering operations. Ordinary businesses in Spain play a key role in bringing cocaine into Europe. Israeli crime syndicates handle a large chunk of the ecstasy trade between the Netherlands and the United States. Closely linked immigrant communities speaking languages that the police cannot understand do retail distribution: in Denmark, the Gambians; in Australia, the Vietnamese. Vastly more efficient distribution and shipping are among the major factors behind the recent halving of heroin and cocaine prices in the United States.

The illegal drug trade inflicts damage at several levels:

In poor countries that produce the drugs, the revenues often fuel internal conflicts (see Chapter 13) and massive corruption in police, army, and government circles—the sort that can wreck a country’s entire potential for development and poverty reduction. Some of these revenues can end up in the war chests of international terrorist groups, or even finance an entire rogue state. Worldwide, some $80–100 billion ends up channeled in such unsavory directions. Some of Afghanistan’s revenues from the drug trade may have benefited the Al-Qaeda network.

In countries whose citizens consume the drugs, health is one of the main concerns. Heroin wrecks lives. Needle sharing spreads AIDS and hepatitis. Even cannabis can alter brain activity and, by some accounts, brings about higher incidences of car accidents. Yet few would disagree that the health damage from most drugs is far less than that inflicted by tobacco and alcohol consumption. Cannabis, for one, may be even less addictive and generally less of a health threat than those two. And apart from heroin, few people die from drug use.

In consuming countries, the bigger damage is from the criminal activity around the drug trade—from the shoplifting, burglaries, and prostitution that so-called chaotic users resort to, and from the vicious circle of marginalization of the generally poor communities that end up suffering most from the trade. About 30 percent of crimes leading to arrests in the United Kingdom had as their motive the need to find money for crack or cocaine. In the United States, drug use is 50 percent more common in households on welfare. Almost all drug-related arrests in the United States are from the bottom of the drug-dealing pyramid, and three-fourths of those arrested are from non-white, impoverished communities—all part of the process that puts more young black men in the United States in prison than in college.

How successful have current antidrug policies been worldwide? While very expensive, these policies have often yielded little in the way of lasting results because they focus almost exclusively on the supply side. The most extensive antidrug policy is in the United States. It costs some $30 billion per year in cash, about half of the total retail market size of $60 billion. Of this, three-fourths is spent on the supply side combating the production and distribution of drugs—from faraway countries to the streets and backrooms where they are sold to users.

Unfortunately, these kinds of policies have revealed serious limitations:

Without a forceful global coalition, the effort to combat the production of drugs in the exporting countries has often resulted in mere relocation and reorganization of production rather than an overall cutback. Dramatic falls in coca production in Peru and Bolivia in the 1990s, for example, simply brought increased production in Colombia. Drugs are just too profitable, and production is cheap and moveable.

Shipping is also so profitable that cutting it off in one place results in its resurfacing elsewhere. A pilot demanding $500,000 to fly 250 kilograms of cocaine adds only 2 percent to the street price of $100,000 per kilogram; if the plane later has to be abandoned, the cost merely doubles to 4 percent. And shipping can deftly pick new routes: Africa has lately become an active transshipping platform for drugs destined to Europe from Asia and Latin America. The profitable drug trade also makes it easy to entice police and customs officials on both sides of the shipment to close their eyes.

Cutting off distribution is even harder. Some 100 groups bring cocaine into the United States; cut off one, another takes over. Among all arrests made in the United States for drug offenses, 40 percent are only for possessing cannabis, while fewer than 20 percent are for the sale or manufacture of drugs, whether heroin, cocaine, or anything else. Unlike other crimes, the seller and the buyer agree and there’s no complaining witness, so police must rely on clumsy informant, wiretap, and undercover tactics—with the risk of harming civil liberties in the process.

What’s the way out? There has been some new thinking, much of it quite controversial. It goes roughly like this: much of the damage inflicted by the drug trade throughout the world—as well as the difficulty of cutting off the very profitable production, shipping, and distribution activities—has to do with the massive price wedge between the import and retail prices of illegal drugs. Example: in late 2000, a kilogram of opium would get $90 for a Pakistani or Afghan farmer, a kilogram of heroin (requiring 10 kilograms of opium) would wholesale locally for $3,000, then be resold for $80,000 in the United States and retail for $290,000 per kilogram on the streets.

This price wedge, so the argument continues, ends up benefiting rogue states, terrorism, criminality, corruption—and leads to the marginalization of poor communities and individuals caught up in the drug system. And it’s the price wedge that makes cutting off the trade so difficult and often futile. Yet, paradoxically, the price wedge is the direct result of the rich countries’ strenuous efforts to cut off the supply.

This type of reasoning has led quite a few people and even governments to conclude that a global solution may have to entail a concerted reduction of the price wedge. How? By focusing policy, they suggest, less on supply and more on the demand side. Practically, this would have two aspects:

First, it would mean selectively liberalizing the laws regarding possession and trade of at least the less addictive illegal drugs. The aim would be to drive down the profitability of a big chunk of the drug trafficking business; to keep users of softer drugs away from dealers in harder drugs; and to reduce the marginalization of drug users. Even the United Kingdom has recently moved into that direction, while avoiding outright legalization. Backers of this idea bring up studies showing that tobacco leads the league table when it comes to addiction (80 percent of smokers are addicted) against recovery rates of 40–50 percent for heroin and 90 percent for cocaine, while cannabis and amphetamines may not be psychologically addictive. They also bring up evidence showing that the “gateway theory” whereby soft drugs lead onto the path of hard drugs has little basis in fact.

Second, so the new thinking proponents say, it would mean treating drug addiction more as a public health and social marginalization problem than as a local drug criminality problem. In Switzerland, researchers are beginning to find that even for highly addictive drugs like heroin, publicly managed, carefully monitored “heroin maintenance” programs have better results for addicts than expensive and often futile detoxification programs, or even heroin-substitute programs such as methadone maintenance. In France, there are innovative efforts to do something about the high-school dropouts from poor communities who so easily become the foot soldiers of drug distribution and related criminal activities. The Écoles de la Seconde Chance, run in partnership with businesses, provide dropouts with an intensive catch-up program aimed at developing a particular skill; this approach works and is cost-effective from a public resource standpoint.

What’s global in all this? Since it touches more than 170 countries, illegal drug trafficking is certainly a global issue. Yet despite quite a few conventions and international efforts, it’s hard not to conclude that the world’s been on a treadmill in this area. Three reasons argue for urgent global action.

First, the new thinking just described—reducing the price wedge, focusing resources and policies less on supply and more on the demand side, zeroing in more on public health and social marginalization aspects—while certainly not uncontroversial (if only because its proponents aren’t very crisp about the risk that drug consumption could increase with lower prices)—looks to some governments as an end to decades of disappointing results from traditional policies. Some of these governments, particularly in Europe, have been moving in that direction and have shown good results, for example, in reduced criminality. But these experiments, particularly in the Netherlands and Switzerland, have also shown that any country that moves way ahead of others turns into a net exporter. Putting it another way: the policies of the world’s biggest importers, like the United States, will limit the freedom of other countries to move towards the potentially more promising new thinking.

So there’s a strong reason for urgent thinking and action in a concerted, global format—all countries have to move roughly in sync, or it’s better to leave the new thinking alone. What’s more, if the world concluded that the new thinking should be given a chance, then the shelter of some sort of global framework will also be required, or else national politicians who would embrace some of the new thinking will readily be branded by their opponents as in favor of drug taking—a sure way to halt the process.

The second reason to consider urgent global action has to do with production. Stopping the production of heroin or cocaine may be hard, but it’s less hard than trying to cut off shipping or distribution, in part because the production is more concentrated geographically. There have been many efforts to do this, sometimes international efforts, sometimes special efforts by one country like the United States in Colombia. But there has not been a massive, concerted global drive. Nor has there been a large enough companion drive to help countries develop large-scale alternatives to opium or coca growing. There is a compelling reason to think of such an effort now, even in the framework of the new thinking above, with its lesser emphasis on supply cutoff. And that is the glaring link between these production activities and issues like terrorism financing, money laundering, and rogue state financing. This goes beyond antidrug concerns and connects to other global issues. The events of fall 2001 made very clear the urgency of helping Afghanistan replace poppy growing with something else, and this was indeed discussed with its provisional authorities as early as December 2001. The same applies to quite a few other countries.

The third reason has to do with the worrisome ascent of a whole array of synthetic drugs. They pose a novel problem to the world, possibly even a tougher one than traditional plant-based drugs. Often based on legal precursor products, they escape the traditional drug-control systems. And their innocuous appearance often leads users to underestimate their danger. Serious thinking about what to do globally in precursor control, information, and early warning when new products burst into a market has only begun. This subissue has all the makings of another massive challenge altogether—and had better be tackled globally and early.”


Excerpt From: Rischard, Jean-Francois.

“High Noon: 20 Global Problems, 20 Years To Solve Them.” iBooks.