Drug War

The Global Drug War in Numbers: 270 Million Users; a $330 Billion Black Market; $100 Billion in Wasted Law Enforcement

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The United Nations Office on Drugs and Crime released its annual report today on the state of the global drug war. Despite some concessions about the need for increased funding of rehabilitation, the report does not bode well for drug policy reform advocates. The U.N. insists that legalization, which more and more countries in Central and South America are considering, would lead to substantial increases in drug use; that crop eradication efforts need to be supplemented with market-distorting subsidies to farmers; and that international police efforts need more funding. In other words, the U.N. wants to do more of everything it's already doing in the war on drugs. 

If there's a silver lining—and that's a big "if"—it's the U.N.'s acknowledgement that guns and chains are not the best way to treat drug use, and that the global drug war has had some unintended consequences. On that first point, the U.N. report states that

there is growing recognition that treatment and rehabilitation of illicit drug users are more effective than punishment.  

Of course, this does not mean abandoning law enforcement activities; instead, the supply and demand sides need to complement each other. This means balancing our efforts against drug trafficking with alternative development programmes for farmers and helping drug users to be rehabilitated and reintegrated into society.

Because the U.N. employs "user" and "addict" interchangeably throughout its report, the implication (as noted in the passage above) is that all 270 million people who used drugs in 2010 (the U.N.'s most recent estimate) are social outcasts. That's simply not true. 

The other arguable silver lining is the U.N.'s admission that the drug war has had unintended consequences: 

The development of black markets and the opportunities they create for organized crime have been among the unintended side effects. Black markets are not specific to controlled psychoactive substances, of course, as they affect a broad range of regulated or prohibited goods and services. Effective drug control measures seem to have given rise to another main category of unintended consequences in illicit drug markets. These are various replacement or displacement effects, sometimes generically referred to as the "balloon effect."

The list of unintended consequences doesn't end there, but you won't find the others in the U.N.'s report. For that, we'll turn to the U.K.-based Count the Cost Initative's "Alternative World Drug Report." The Count the Cost Initiative was started by the Transform Drug Policy Foundation as a way to tally the cost of the drug war. This year's numbers are pretty stark: 270 million users; a $330 billion black-market economy; $100 billion in wasted law enforcement dollars. 

Count the Costs makes the case that the unintended consequences of prohibition affect everything from the environment (crop eradication efforts lead illegal groups to use protected forests) to public health (the creation of designer drugs and the cutting of traditional drugs with harmful chemicals) to human rights (roughly 1,000 people a year are executed for drug-related crimes, and in many other countries, sentences are disproportionate to the crime). 

Some other big financial data points from Count the Costs' report: 

  • In 1998, the International Monetary Fund estimated that total money laundering represents 2-5% of global GDP. In 2009, the UNODC put the figure at 2.7% of global GDP, or US $1.6 trillion. 
  • According to the former head of the UNODC, Antonio Maria Costa, there was strong evidence that funds from drugs and other criminal activity were, "the only liquid investment capital" available to some banks at the time. He said that, "inter-bank loans were funded by money that originated from the drugs trade," and that, "there were signs that some banks were rescued that way."
  • Drug-related corruption causes Mexic to suffer investment losses of up to $1.6 billion annually.
  • Prison spending in the U.S. increased by approximately 127% between 1987 and 2007.
  • In producer countries, state security agencies and the military often benefit greatly from increased enforcement efforts. In Colombia, for instance, defence expenditure increased from 3.6% of GDP in 2003 to 6% in 2006. This resulted in an actual increase of security forces from 250,000 (150,000 military plus 100,000 police) to 850,000 over the four years.

The big questions I had from skimming these two reports was this: Why doesn't the U.N. acknowledge the human costs of prohibition? And why does the U.N.'s report fail to mention the ongoing success of decriminalization in Portugal?

The Alternative World Drug Report suggests an answer: "Established under the three drug conventions, [the UN Office of Drugs and Crime's] default position is to defend these conventions, and seek consensus among the member states it serves. This lends itself to inertia rather than challenging the system it operates within."

The Count the Costs report serves as much-needed balast to the inflexible prerogatives of the UN Office of Drugs and Crime. Another report out today by the reform-minded Global Commission on Drug Policy finds that prohibition is leading the to spread of infectious diseases such as HIV/AIDS and tuberculosis.