1 We need new policy evaluation tools - Preface - Drug industry: the globalisation of its activities. - The criminal industry produces also legal activities - More efficacy for the Public Expenditure - Models and indicators to get better cost-effective regulations Bruxelles, 6, March, 2008 Roberto Ricci, economic consultant Carla Rossi, representative EU Parliament in the MB of EMCDDA

2 Preface…. from the Political Declaration of the UN General Assembly 1998 Drugs destroy lives and communities, undermine sustainable human development and generate crime. Drugs affect all sectors of society in all countries; in particular, drug abuse affects the freedom and development of young people, the world's most valuable asset. Drugs are a grave threat to the health and well- being of all mankind, the independence of States, democracy, the stability of nations, the structure of all societies, and the dignity and hope of millions of people and their families; therefore: We, the States Members of the United Nations…omissis

3 Preface OBJECTIVE ……. Welcome the United Nations International Drug Control Programme's global approach to the elimination of illicit crops and commit ourselves to working closely with the United Nations IDCP to develop strategies with a view to eliminating or significantly reducing the illicit cultivation of the coca bush, the cannabis plant and the opium poppy by the year We affirm our determination to mobilize international support for our efforts to achieve these goals RESULTS: the example of Afghanistan From UNODC “Afghanistan opium survey 2007

4 Drug industry: the globalisation of its activities FARMS and BASIC FACTORIES TRANSPORT WHOLESALE and FIRST PACKAGES FOR THE CONSUMERS RETAIL AND SECOND PACKAGES FINANCE Key connections among activities; information; corruption where necessary

5 FARMS AND BASIC FACTORIES VERY EXTENSIVE FARMLANDS AGRICULTURE PRODUCT NEEDS BASIC FACTORIES TRANSPORT IS TOO EXPENSIVE AND DIFFICULT 1 KG EROINE – 10 KG DI OPPIO – FLOWERS 1 KG COCAINE – 3 KG ROW COCAINE KG DRIED LEAVES Drug industry: the globalisation of its activities Is it effective to apply law enforcement interventions at this level (eradication, fumigation, lab. destruction… )? Have UNODC programmes been effective?

6 Do eradication interventions take effectively place in those regions that are extensively cultivated? Comparing the two maps…..those regions are only very partially affected by these interventions as they are still the areas most extensively cultivated From UNODC “Afghanistan opium survey 2007

7 The geographical distribution over time shows some decrease in production where it was already low and big increase where it was already high!

8 Eastern and southern cultivations are old and still operating, in other areas they are developing over time

9 Drug industry: the globalisation of its activities TRANSPORT GREAT DEALERS FOR THE WHOLESALERS AND LITTLE DEALERS, OFTEN ONLY FOR THEIR OWN CONSUPTION AN ARMY, DEALERS AND CARRIERS, LOOKING FOR THE ENORMOUS PROFITS IMPOSSIBLE FOR THE NORMAL TRANSPORT IT IS A GREY ZONE IN THE PRODUCTION CHAIN WHICH PRICES ? AND WHICH QUANTITIES?

10 From the producer to the consumer countries From UNODC “Afghanistan opium survey 2007” This export adds value with every border that its crosses. By the time the heroin hits the streets of Moscow, Paris or London, it could be worth 50 to 100 times as much as in Kabul (taking changes in purity into account). Therefore, while opium is profitable to some Afghan farmers, these sums – though significant in relation to the local economy – are only a fraction of the major profits that are being made world-wide by criminals, insurgents and terrorists.

11 Drug industry: the globalisation of its activities (IN THE CONSUMER COUNTRIES) THE GENUINE PRODUCTS ARE MIXED WITH LESS EXPENSIVE PRODUCTS COMING FROM THE PHARMACEUTICAL INDUSTRY (LEGAL) THE PACKAGES FOR THE CONSUMERS NEED LABORATORIES THOUSANDS LITTLE LABORATORIES WHOLESALE AND FIRST PACKAGES FOR THE CONSUMERS NEW DRUGS, COMING FROM FARMACEUTICAL INDUSTRY, ARE PACKAGED AT THIS LEVEL TOO

12 THE HEARTH OF THE INDUSTRY CONNECTS THE DIFFERENT ACTIVITIES OF THE INDUSTRY ITS ACTIONS COULD HAVE POLITICAL EFFECTS ON THE EQUILIBRIUM OF SOME COUNTRIES IT ACTS INSIDE LEGAL STRUCTURES Drug industry: the globalisation of its activities FINANCE Key connections among activities; information; corruption where necessary NEW DRUGS RISK TO BE NEW AND EASIER SOURCES OF PROFIT AND THEY COULD CHANGE THE ASSESSMENT OF THIS ACTIVITY

13 From UNODC “Afghanistan opium survey 2007” Opium cultivation in Afghanistan is no longer associated with poverty – quite the opposite. Hilmand, Kandahar and three other opium-producing provinces in the south are the richest and most fertile, in the past the breadbasket of the nation and a main source of earnings. They have now opted for illicit opium on an unprecedented scale (5,744 tons), while the much poorer northern region is abandoning the poppy crops. Further, opium cultivation in Afghanistan is now closely linked to insurgency. The Taliban today control vast swathes of land in Hilmand, Kandahar and along the Pakistani border. By preventing national authorities and international agencies from working, insurgents have allowed greed and corruption to turn orchards, wheat and vegetable fields into poppy fields. Drug Industry cooperates with terrorist groups for a counter-eradication programme in the producer countries

14 Drug industry: the globalisation of its activities THE PUSHERS ARE AT THE LOWEST LEVEL IN THE CRIMINAL INDUSTRY MILLIONS ALL OVER THE WORLD, THEY ARE EXPOSED TO RISKS, THEY ASSURE THE ENLARGEMENT OF THE MARKET (incidence is the specific indicator to measure the dynamics of the market and shows that new areas are more and more important, new substances are spreading and new “ruotes of admininstration” are becoming popular for traditional substances) PUSHERS ARE OFTEN CONSUMERS AND NEED TO SELL, BECAUSE IT IS THE ONLY “JOB” THEY CAN DO TO PAY THEIR DAILY DOSES THEIR SALE PRICE IS CONDITIONED BY THE WHOLESALER THEY ARE EASILY CAPTURED BY THE POLICE AND IMPRISONED. WHILE IMPRISONED, THEY ARE TRAINED BY MORE EXPERT PUSHERS AND WHOLESALERS TO REACH MORE IMPORTANT POSITIONS IN THE TRAFFICKING DRUG ARMY RETAIL - MORE LITTLE PACKAGES AND AGAIN A NEW MIX WITH OTHER SUBSTANCES

15 The criminal economy produces also legal activities MILLIONS PEOPLE ARE IN THIS VICIOUS CYCLE AND MANY OF THEM SPEND THE MOST OF THEIR LIFE IN HOSPITAL OR IN PRISON CONSUMERS AND PUSHERS PUBBLIC AND PRIVATE HEALTH JUSTICE AND PRISONS LOSS FOR THE LEGAL ECONOMY LOSS OF WELFARE FOR THE FAMILIES LAWYERS GUNS, POLICE PUBBLIC EXPENDITURE PRIVATE HEALTHCARE

16 More Cost-Effective Drug Policies and Regulations Law enforcement interventions is not the right answer against millions pushers Prisons are crowded and are the selection center for the Drug Industry. Treatment, information and prevention? What does the school system do and community education? … and the healthcare system? Policies must be evaluated by measuring Criminal Economy compared to GDP Actually there is no efficient control and policy evaluation is only based on partial indicators on supply and/or demand reduction interventions….. not enough to globally evaluate policy and fight Criminal Economy

17 Looking for models and indicators to reach cost-effective regulations We need a global macro-economic model to mirror the relationships between the various actors and sub-systems. The analysis of the model will provide suitable indicators to measure the impact of criminal economy and the cost- effectiveness of policies both at micro and macro level.

18 From UNODC “Afghanistan opium survey 2007”

19 From UNODC “Afghanistan opium survey 2007”

20 Models and indicators to get cost-effective regulations Where can we act? An example: let’s start from the demand side Prevention and regulation: demand of drugs is related to the life style. The marketing of the Drug Industry might have understood it. Rave Parties are examples of events where an extreme life style is in favour of drug abuse. Reducing marketing space for wholesaler → Reducing drug users Treatment and rehabilitation: Drug addicts should be helped and we must find a different justice regulation also for drug users. Reducing the criminal recruiting area → Reducing distribution system