Homeland Security

Illicit Drugs Damage Economic Growth

(International narcotics report: trafficking hurts developing
countries) (1150)
By Judy Aita
Washington File Staff Writer
United Nations -- Involvement in the illicit drug trade does not help
legitimate national economies and, in the long-term, prevents economic
growth, especially in developing countries, according to a new report
released February 26 by the International Narcotics Control Board
(INCB).
Focusing its 2003 annual report on the relationship between the
cultivation, manufacturing and trafficking of illicit drugs and a
country's sustainable economic growth, the INCB said that analysis of
drug production data and economic growth rates in the main drug
producing countries shows a negative impact.
INCB President Philip Emafo said, "The drug problem is often seen
primarily as a social problem, but our report shows that it also has
serious economic consequences which impact on the overall development
of a country. While social problems of drug abuse are felt in the
developed countries, the major economic impact of the illicit drug
trade is in the developing world."
At a United Nations press conference releasing the report, Emafo said
the INCB categorically dispels the myth that drug trafficking may be a
route to prosperity. "Drug trafficking does not contribute to economic
growth and prosperity." He continued, "We urge countries to rid
themselves of illicit drug production because it will benefit them in
the long-term, even if there are short-term costs."
Further, the report finds that long-term economic development is
simply not feasible if a country has failed to implement an effective
system of controlling drugs. Emafo said the INCB is urging the
international community to help developing countries in their drug
control efforts.
The INCB is an independent body established to monitor implementation
of the United Nations international drug control treaties, and to
encourage governments to comply. In keeping with that responsibility,
the INCB conducted a comparative analysis of drug production data and
economic growth rates in the main drug coca and poppy cultivating
countries. It shows a negative correlation between illicit drug
production and economic development. An actual decline in economic
growth results when illicit drug production increases, the report
said.
In 1998 and 1999 in the Andean sub-region, for example, coca bush
cultivation in Bolivia and Peru decreased while in Colombia it
increased. During that period Bolivia and Peru witnessed economic
growth that was above the Latin American average while Colombia
experienced a decline in economic growth, according to the analysis.
A similar pattern was observed in countries in Asia, the report said.
Afghanistan had negative economic growth and instability beginning in
the early 1990s with massive increases in large-scale opium poppy
cultivation. In the neighboring countries of Pakistan and Iraq, opium
poppy cultivation was significantly reduced or eliminated and there
was positive economic growth in both countries in the 1980s and the
1990s.
The bulk of the profits of illicit drug trafficking is earned outside
countries where drugs are cultivated and manufactured, the report also
said.
"Only one percent of the earnings of illicit drug trade is earned by
the farmers in developing countries," Emafo said. "It has been
estimated that 50 to 66 percent of drug trafficking profit is made in
developed countries where most of the illicit drugs are consumed," he
said.
The economic impact of illicit drug money is greater in developing
countries, however, the report said.
For example, illicit drugs are estimated to be between 10 and 15
percent of gross domestic product (GDP) for Afghanistan and Myanmar
and between 2 and 3 percent in Colombia and Laos. In the United
States, which has more drug abusers than in any other country, the
profits from illicit drugs amount to just 0.4 percent of GDP, the
report said.
The illicit drug trade "destabilizes the state, the economy, and civil
society apart from the damage to long-term economic development,"
Emafo said. "The illicit drug industry undermines political systems
through promoting conflicts, insurgencies and compromising the rule of
law."
Although illegal drug trafficking offers employment opportunities to
some of the disadvantaged members of the society, it jeopardizes their
human development and compromises economic development, according to
the INCB president.
"Any benefits are ephemeral," Emafo added. "Those who are cultivating
the plants are getting some revenue, but in the long-term they are
destroying their environment; in the long-term they do not have
economic development because ... cultivation is in areas that are
inaccessible and in areas of conflict, and governments are not
encouraged to promote economic development in such areas."
"There are really no benefits the people in the areas cultivating the
illicit plants can gain," Emafo said.
The illicit drug industry also destabilizes the economy through inflow
of large illicit profits which foster overvalued exchange rates and
income inequality, he said.
"Furthermore, the illicit drug industry undermines civil society
through promoting drug abuse and disrupting the official fabric of
society involving the family and community. It contributes to the
rising levels of crime and violence," Emafo said.
Emafo also said that after visiting Afghanistan in 2002, board members
were convinced that the Afghan government was serious about drug
control, but ill-equipped to stop widespread opium poppy cultivation.
Afghanistan is the world's largest producer of illicit opium.
The board's 2003 report also discusses the illicit drug situation in
each region, reports on the production of licit drug production, and
discusses the alarming growth in synthetic drugs such as ecstasy,
amphetamine, and methamphetamine.
The INCB also warns there is a danger that the worldwide legal market
in opiates for pain relief may be getting out of control with supply
currently exceeding demand. The board said that cultivation and
production levels are far in excess of medical consumption and a risk
increases that stocks could be diverted into the illegal drug market.
On regional issues the report said that:
Cocaine abuse is rising in almost all countries in southern and
western Africa, particularly in Nigeria and South Africa. Increasing
numbers of clandestine labs making synthetic drugs have been raided by
law enforcement agencies in Africa. In July 2002 South African
authorities seized manufacturing equipment and more than 100 tons of
chemicals which would have produced 90 million methaqualone tablets.
In Colombia and Peru the drug problem is increasingly being linked to
political and national security issues as guerrilla and paramilitary
groups in Colombia exchange illicit drugs for firearms. "Plan
Colombia," supported by the United States, continues to be the single
most significant effort aimed at reducing illicit drug supply in South
America, according to the INCB findings.
China has become the main destination and transit area for heroin
consignments. Opium production levels in Myanmar, the world's second
largest producer of illicit opium, have fallen by half since 1996 and
the government reduced the area under cultivation by 7 percent in
2002.
The INCB 2002 report can be found in full at
http://www.incb.org/e/ind_ar.htm
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:
http://usinfo.state.gov)