Drug Trafficking: Impact on Health, Economy, and Environment

Drug Trafficking (I)

Drug consumption has been a phenomenon proper to every human civilization since known records. Nowadays, the United Nations assesses in its 2015 Report that 1 out of 20 adults used at least one kind of drug in 2014. From these, over 29 million suffer from drug use disorder.

Among those drugs that are consumed to a higher degree and thus worth a more detailed analysis, we find opiates, cocaine, cannabis, and synthetic drugs.

Opiates: main producers are found in South-West Asia (Afghanistan), even if we can find it in South-East Asia (Myanmar) and Latin America too, although at a lesser degree. In this respect, Afghanistan has the largest extension, with 2/3 of the world's surface, followed by Myanmar with 20% and Mexico with 9%.

Global production: production fell in 2015 by 38% compared to 2014. Despite this dramatic fall in 2015, provoked by poor yields in Southern Afghanistan, the truth is that the cultivation area was down by only 11%. It must be considered that punctual yearly falls seem to be compensated by surplus from other years, offsetting the effects of an overall very volatile pattern of production. In a more long-term perspective, the truth is that opium cultivation was still higher than in previous peaks of 1998 or 2007 (fig. 27, slide 11). The breakdown by countries is: Afghanistan (70%), Myanmar (14%), and Latin America, mostly Mexico (11%).

Global market: this has remained in a rather stable position and an upward trend (see fig. 38 in slide 12). Whereas it has declined in Western and Central Europe since the 90s, it registered a certain increase in North America and might be increasing in some markets of the former. To that must be added its introduction in the Post-Soviet Space and a possible increase in Africa. It must not be lost from sight that there is also a sizable volume of poppy which is cultivated for domestic use; the main example is India.

Trafficking routes: the main route is known as the “Balkan Route,” which links the production of South-Asia to the European market. It is by far the main route. The so-called “southern route” has grown in importance, linking again South-Asia with diverse world regions through sea-born and air-born traffic. The third route stemming from the region of South Asia is the “northern route,” which connects Afghanistan to the Post-Soviet Space. To this have to be added the route connecting South-East Asia (The Golden Triangle) to China and Oceania and the route that links Mexico to North America and Colombia to South America.

Cocaine: The production of cocaine is mostly concentrated in Latin America. Colombia leads with as much as 52% of world cultivation, followed by Peru representing 32%. To that must be added Bolivia, which with 15% of the world's global surface, covers almost all of the remaining space.

Global production: the report by the UN showed an increase in production for 2014 of 10%. This seems to be a very sizable increase for one single year. However, in a long-term perspective, compared to the peak of the 80s, the area devoted to cultivation remains the second smallest: a fall of 19% since 2009, 31% since 1998, and 40% lower from the peak of 2000. Manufacture remains also 24-27% lower than its peak from 2007. However, it still remains similar to the level of 1998. That production should increase despite a fall in the surface devoted to cultivation is explained by the increasing efficiency of cocaine processing.

Global market: the annual prevalence of cocaine consumption has remained in overall terms constant during the period 1998-2014. Among the main markets, we find North America and Europe. North America leads consumption of cocaine, which in the latest years has undergone a clear decline; it declined by 32% from 2006 to 2014. In Europe, consumption of cocaine peaked in 2007 and has been declining since then. However, within this general picture, it must be highlighted that consumption is highly unbalanced when it comes to a breakdown by countries, with much of consumption located in some Western European countries above the average.

Trafficking routes: given all of its production coming from South America and the main markets being located in the first world, namely, cocaine necessarily follows two directions, towards North America and towards Europe. The trafficking route to North America necessarily goes almost entirely by land through Central America and Mexico or directly to Mexico by sea-born traffic and then forth by land with the rest of the traffic; there is also some traffic (13%) that takes the Caribbean route. The trafficking route to Europe normally starts in Brazil, Colombia, Ecuador, the Dominican Republic, Argentina, and Costa Rica. Some volumes go through Africa (10%) instead of going directly to Europe. Once in Europe, the main entry routes are located in Spain, Portugal, and the Netherlands.

Cannabis: in marked contrast to opiates and cocaine, the cultivation of the cannabis plant is widely spread, as it happens in as many as 129 countries. However, some countries lead in production: Morocco, Afghanistan, Lebanon, India, and Pakistan.

Global market: as of 2014, around 3.8% of the world population consumed cannabis. The main market remains North America, where consumption is nevertheless less than by the decade of the 70s. Consumption exploded in Europe from the early 90s, stabilizing by the mid-00s, then slightly declining since 2009 to recover lost ground in 2013 and 2014. There have been reports of increased consumption in Africa too.

Legal status: The great difference that sets cannabis apart from other drugs such as opiates and cocaine is that its use has become decriminalized to higher or lesser degrees in several countries, in what seems to be a general trend, even if most countries still put restrictions if not totally ban its consumption.

Synthetic drugs: in a striking difference with the three previous drugs, these do not depend on plants for their extraction, they can be manufactured entirely in laboratories. Among these, methamphetamine is the main item for consumption.

Global production: in a reflection of one of its main markets, a large volume of production can be found in South-East Asia to feed local consumption. The same can be said of East Asia and North America. In the Middle-East, for example, most of the production is located in Lebanon and Syria.

Global market: the main markets are located in North America, East Asia, and South-East Asia.

Trafficking routes: owing to laboratory-based production, it is easier to produce for local markets. This notwithstanding, there is also trans-border traffic as methamphetamines are smuggled from West Africa, North America, West Asia, East and South-East Asia, with Europe and the Middle-East being the main transit routes to other regions.

The main and direct consequence of drug consumption is the impact on health. This comes along with some indirect consequences as disease transmission:

For the year 2013, almost 12 million lives were lost to drug abuse, of which more than 8 million were caused by opiates. Even if the burden per 100,000 people shows that in a sense, this is a “first world” burden (see slide below), the impact on developing countries should not be underestimated.

In the case of heroin, which is usually administered via injection, this carries the indirect effect of increasing the transmission of diseases, especially HIV; it is estimated that 5-10% of people living with HIV inject drugs. Drug use represents a risk factor accounting for 32% of hepatitis C-related cirrhosis.

Cross-country high-income differences and drug use: the cost of production of each kind of drug influences the direction of trafficking flows:

The addition of costs along the chain of production and distribution shows that the wholesale price of coca in Bolivia, Peru, and Colombia represented only 1% of the retail price in the USA! Similarly, if profits related to opiates in Afghanistan amounted to only $357 million per year in the period 2009-2012, profits along the Balkan route amounted to as much as $28 billion

Thus, for example, those such as heroin and cocaine which originate in confined and well-defined areas and have thus limited production and therefore high prices, flow towards rich countries whose citizens can afford it.

On the contrary, cannabis and methamphetamines can be more easily grown or manufactured and are therefore more available for local markets in developing countries without strong reliance on international traffic.

Developing countries which are located within big trafficking routes necessarily respond to a higher or lesser degree to the pattern explained above.

We may find that high-priced drugs such as heroin and cocaine are the object of widespread use in those developing countries where poppy and coca plants are grown, but under either unprocessed form or processed with very low quality:

Thus, we find that consumption levels of cocaine in North and South America are similar. However, in quantitative terms, the difference is huge, as whereas in the North it is consumed in salt form, in the South cocaine is consumed via coca leaves. Whenever salt is also consumed, it will always be under very impure (and therefore more dangerous) forms.

In the case of heroin, it must be necessarily consumed under some kind of processing. Thus, opiates consumed in India from local production are necessarily of lower quality from heroin transited from countries like Afghanistan or Myanmar, bound for First World markets.

Even if some drugs may be more available in developing countries compared to “rich world” drugs, as it is the case of methamphetamines, these countries saw technology for elaborate drugs developing first in the First World. It is thus that as for what concerns methamphetamines and other synthetic drugs, the pattern has been one of consumption first in developed countries, seeping into developed countries progressively.

Economic development and illicit crop cultivation: the linkage between development and drugs is manifest when it comes to motivations for cultivating plants from where drugs may be extracted.

Illicit cultivation is usually practiced by low-income farmers in developing countries who see it as a means to withstand their situation of poverty. This has proved to be the reason for poppy cultivation in Myanmar, where most of the gains are devoted to food purchase.

What is more interesting and as can be deduced again from Myanmar but from Afghanistan too, is that poppy cultivation mostly happens where there are few other alternatives: in Myanmar villages engaging in poppy cultivation were still poorer than those that did not, whereas in Afghanistan, poppy was cultivated in those areas less connected to markets.

The lesson seems to be that the more development, the less motivation to engage in such cultivation.

The particular case of Thailand seems to corroborate this hypothesis: although it is clear that repression played an important role too, it seems that the drastic reduction from the mid-60s to mid-00s (from 17,900 ha to 129 ha) is clearly linked to economic development.

However, there is no clear-cut linear relation between economic development and reduction in drug-related crop cultivation. Development may also establish preconditions for thriving cultivation, as was the case in South America: infrastructure modernization enabled cultivation in so far isolated regions.

Impact of drugs on economic development: the impact ranges from the creation of an economy based on illicit activities to violence and corruption generated by the drug-based economy.

We could see in the previous slide how retail prices for cocaine and profits made along the whole traffic chain for opiates dwarfed profits obtained in producing countries. Despite this, the impact on the economies of these producing countries is proportionally much bigger: 13% in Afghanistan (2014), 4.1% in Colombia (2009), compared to only 0.2% in the US and 0.36 in the UK (2009)! The example of Afghanistan equally provides a disquieting data: net inflows derived from drugs are offset by equivalent outflows (imports, capital flight).

Most of the studies on the economic impact of drugs have been carried out in developed countries where costs seem to range from 0.07% to 1.7% (health costs, prevention and law enforcement, loss of productivity, etc.)

Drug trafficking has also an impact through the deterioration of the environment derived from all its activities.

The main impact of drugs, caused by the cultivation of poppy, coca, and cannabis is that of deforestation. There can be direct or indirect deforestation:

Direct deforestation: given the poor socioeconomic condition of farmers that find in illicit cultivation a source of revenue, they usually find in unexploited forests the only places left for them. Besides this, as cultivation is usually illicit, they are forced into remote areas to escape control. This impact must be qualified: according to the UNODC, in Colombia, from 2001 to 2006, only 5.3% of lost forest was attributable to drug cultivation; another study, focusing this time on a larger period (2001-2012), reduced the area to 1.2%.

Indirect deforestation: the fact that illicit cultivation penetrates into remote areas to escape control arguably has the indirect consequence of attracting other population flows that will engage in licit activities, but with a significant impact on deforestation, as well as other illicit activities (logging or mining). Sometimes this can simply happen because of the need for laundering profits from the drug business into licit activities (pasturage, logging)! However, studies again qualify this assumption: Indeed, illicit cultivation happens in regions with a high degree of deforestation (correlation); the causality thought ought to be reversed, as development of remote areas drives deforestation and makes easier illicit cultivation, rather than the other way round.

Deforestation through drug trafficking: illicit cultivation, although the main potential driver of deforestation, is not the only element in the chain of drug trade that may impact negatively:

Deforestation as a consequence of drug traffic has been reported in certain regions of Guatemala and Honduras, the main route for drug traffic between North and South America (clearing for landing grounds), generating similar dynamics of direct and indirect deforestation as explained above. An example shows what happened in the Maya Biosphere Reserve in Guatemala, where drug traffickers took hold of the region through violence.

In general, as the slide below shows, there seems to have been a strong correlation between flows of drug traffic and deforestation in the period from 2004 to 2012.

Activities related to drug production can also have substantial impacts in the form of pollution. This is especially the case with synthetic drugs which use a wide range of chemical components:

It must be considered that clandestine laboratories where synthetic drugs are manufactured are usually located in urban settings, so waste through the sewage system may have a high impact on the health of its inhabitants.

Another important impact that drugs may have is in water depletion of the environment:

If we analyze the case of Afghanistan, we cannot lose sight of the fact that this is a very dry country, subjected to frequent droughts and hydric stress. The particular case of the region of Helmand is illustrative: a strong drought from 1999 to 2001, combined with unsustainable development and offtakes for irrigation reduced the water flow along the lower Helmand river in as much as 98%. Poppy cultivation is a strong factor in the demand for irrigation because of two reasons: by hoarding of water from the already existing irrigation system and by making financially viable more sophisticated methods of extraction.

As a phenomenon of necessarily criminal nature given the general prohibition leveled upon (if not all, most) drugs, drug trafficking has a close relation to diverse forms of violence:

When can consider different kinds of violence: psychopharmacological violence (effect of drugs on its users); economic violence (users' attempts to secure resources); systemic violence (struggles to control the business).

Systemic violence represents an interesting ground for study as it is the most destabilizing factor, leading, as it is the case of Mexico or Central American republics to state-wide challenges. Drug trafficking does not have a linear relation to the development of systemic violence. There is a striking difference between South-East and East Asia and Latin America in general, for the former seems to have much lower levels of systemic violence:

Latin America: 30% of homicides are drug-related.

South-East and East Asia: 2% of homicides are drug-related.

The reason seems to be the more decentralized business model that permeates drug-trafficking in South-East and East Asia.

The dimension of systemic violence that arguably carries a bigger danger is when drug traffic intersects with terrorism and insurgency-related conflicts:

Afghanistan: an analysis of this country from 1994 to 2008 showed that a 25% increase in the hectares devoted to poppy cultivation correlated by a degree of 0.15 more terrorist attacks and 1.43 more homicides. This was not the strongest factor though.

Colombia: here is where we arguably find the strongest example, as the drug business represented the main source of funding for the guerrillas fighting the government, owing the nickname of “narco-guerrillas”.

However, we need to be very careful when it comes to the relation between terrorism and drug-trafficking: an analysis covering the years 1998-2005 showed that of the 395 terrorist organizations included in the study, only 35, that is, 9% of them engaged in drug trafficking P. 98.