Hello hampton2600 ~
There are two major factors of heroin use that affect the economy
negatively.
Although many people assume that the drug trade is a source of
employment for those without other means, and that it does not have
adverse affects, studies show otherwise. Although it may surprise
some, drug sales have shown time and time again to *not* significantly
affect a country's economy in a positive way. As an example, The
United Nations International Drug Control Programme, comments on drug
sales in general:
"It may be the case that in Bolivia, a 10% increase in coca and
cocaine production raises GNP by 2% and reduces unemployment by 6%.
But inevitably the employment gains generated by the drug trade are
more than offset by various side effects...[including] the inevitable
spillover from drug production into consumption, which impacts
negatively on productivity...Identifiable costs of drug abuse in
consumer countries range from 0.5 to 1.3 percent of GDP...Taking those
costs into account, the argument that the illicit drug industry can
act as an engine of growth becomes rather difficult to defend."
("Economic and Social Consequences of Drug Abuse and Illicit
Trafficking," United Nations International Drug Control Programme,
http://www.undcp.un.or.th/econ_soc )
In addition, while the UNIDCP says that more than 90% of the profits
in the heroin trade are generated at the distribution stage, even for
the creator of the drug, the result is a "subsistence level of
income." The bulk of drug-related income is deposited in foreign
countries by traffickers and syndicates, or spent on luxury imports;
"in other words, those in need rarely benefit from the profits
obtained in the illicit drug trade."
It is interesting to note that cocaine trafficking has *not* improved
the economy of Columbia, either (see
http://lacc.fiu.edu/publications_resources/working_papers/working_paper_02.htm
).
The average health costs of a drug addict are about 80% higher than
those of an average citizen in the same age group, according to
UNIDCP. "The link between injecting drug use (IDU) and the spread of
HIV/AIDS is also well recognized; today, at the global level, some 22%
of the worlds HIV/AIDS population injects drugs. The worldwide
HIV-prevalence rate for injecting drug users is between 40-50%."
It is mostly non-drug-users who pay for these costs, too. (55% of
costs related to use are paid by non-drug-users.) In an article about
heroin, one task force states that taxpayers shell out about $276
billion a year to pay for the medical care, motor vehicle accidents,
lost productivity, and incarceration of heroine users. (
http://www.metrokc.gov/health/subabuse/heroin/background.htm ) (It
should be noted that not all incarcerations are due to the buying and
selling of heroine; many are due to DUIs, and other crimes committed
while on, or because of, heroin.)
Heroine is associated not only with death and the devastating costs of
HIV/AIDS, but with infection of many major organs (including, but not
limited to, the heart lining and valves), collapsed veins, abscesses,
cellulitis, and liver disease. Pulmonary complications, including
various types of pneumonia, may result from the poor health condition
of the abuser, as well as from heroin's depressing effects on
respiration. As such, the cost of using heroin is very steep, indeed.
In addition, studies suggests that as heroin prices escalate, use of
the drug decreases. ( http://papers.nber.org/papers/W6415 and
www.emcdda.org/multimedia/project_reports/
situation/heroin_report_CT99%20EP05B.pdf ); since it is generally
argued that legalizing the drug would make it more affordable, this
would have a negative impact upon the economy, due to the health
issues related to heroin use.
Therefore, while heroin use causes health costs to individuals and the
community as a whole to rise, it does not (once costs are taken into
consideration) raise a country's GNP, or positively impact the wealth
of any but a small group of individuals.
This site cites a scholarly paper that looks at the economics of
heroin users, which you may find helpful:
http://ideas.repec.org/p/fth/bereco/199.html
Though not directly related to economics, this site offers some
interesting stats about heroin use:
http://www.health.org/govstudy/bkd230/rtst1011.aspx
For an article about the economic cost of drug abuse, visit:
http://www.nida.nih.gov/EconomicCosts/Chapter5a.html
Keywords Used:
heroin economic*
://www.google.com/search?hl=en&ie=ISO-8859-1&q=heroin+economic*
heroin negative economic effect
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=heroin+negative+economic+effect
Hope this helps!
kriswrite |