Economic Effects

The worldwide trade in illicit drugs is a multi-billion dollar industry. In 2005, the United Nation’s annual report on global drugs indicated that illicit drug sales around the world each year were greater than the GDP (gross domestic product) of 88% of countries in the world. The UN estimates the overall size of the global drug trade to be in excess of US$300billion.

The massive size of this illicit industry in turn has a substantial impact on the legitimate economies of countries around the world. It has been estimated that the much-publicised ‘war on drugs’ has cost the United States over a trillion dollars during the last 40 years.

In developed countries such as the United States and the United Kingdom, the cost of drugs is clear to see in a number of areas. Firstly there is the cost to police and other law enforcement agencies of enforcing the laws related to drug use and distribution, in terms of both financial cost and manpower/resources. In addition to this there are the substantial costs of investigating, intercepting and prosecuting international and domestic drug trafficking.

Drug treatment programs cost many nations further money, in some case diverting funds from other areas of health and social spending.

In less developed countries, impoverished farmers and other workers often depend on the illegal trade in drugs for their livelihoods, growing plants like Coca (Colombia) and Opium poppies (Afghanistan) as cash crops. To break this dependency on illicit drug crops, some groups have suggested that more needs to be done to make it profitable for farmers to grow alternative non-drug crops. Doing so could also potentially ease the financial burden of tackling drug-related problems elsewhere in the world.