Drug War Facts: Economics

Drug facts
Economics


DRUG WAR FACTS
compiled by Kendra E. Wright and Paul M. Lewin
for Common Sense for Drug Policy, http://www.csdp.org/ 

Updated: August 15, 1998
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Economics

1. According to the United Nations, drug trafficking is a $400 billion per
year industry, equaling 8% of the world's trade. This is greater than the
exports of the automobile industry, worldwide.

 Source: Associated Press, "U.N. Estimates Drug Business Equal to 8 Percent
 of World Trade," (1997, June 26).

2. It costs approximately $8.6 billion a year to keep drug law violators
behind bars.

 Sources: Bureau of Justice Statistics, Profile of Jail Inmates 1996,
 Washington D.C.: U.S. Government Printing Office (1996, April), p. 1 &;
 p. 4; Bureau of Justice Statistics, Prisoners in 1996, Washington D.C.:
 U.S. Government Printing Office (1997), pp. 10-11; Criminal Justice
 Institute, Inc., The Corrections Yearbook 1997, South Salem, NY: Criminal
 Justice Institute, Inc. (1997) [estimating cost of a day in jail on
 average to be $55.41 a day, or $20,237 a year, and the cost of prison to
 be on average to be about $64.49 a day, or $23,554 a year].

3. A 1998 report by the National Institute on Drug Abuse (NIDA) and the
National Institute on Alcohol Abuse and Alcoholism (NIAAA) estimated the
economic costs of alcohol abuse in the United States to be $148.02 billion
in 1992, 80% of which were due to alcohol-related illness. This 80% figure
includes health care expenditures, impaired productivity and premature
death.  To contrast, drug abuse cost a total of $97.66 billion in 1992, of
which less than 40% ($38.71 billion) was due to drug-related illness or
premature death.  This figure includes $4.16 billion in HIV/AIDS and
Hepatitis treatment costs.

 Source: National Institute on Drug Abuse and National Institute on Alcohol
 Abuse and Alcoholism. The Economic Costs of Alcohol and Drug Abuse in the
 United States, 1992. Washington, D.C.: U.S. Department of Health and Human
 Services, Table 1.1, p. 1-3 and Table 4.1, p. 4-2 (1998, May).

4. A 1998 report by the National Institute on Drug Abuse (NIDA) and the
National Institute on Alcohol Abuse and Alcoholism (NIAAA) estimated the
economic costs of drug abuse in the United States to be $97.66 billion in
1992.  Sixty percent (60%) of drug costs were due to drug-related law
enforcement, incarceration and crime. Only 3% of drug costs were from
victims of drug-related crime.

 Source: National Institute on Drug Abuse and National Institute on Alcohol
 Abuse and Alcoholism. The Economic Costs of Alcohol and Drug Abuse in the
 United States, 1992. Washington, D.C.: U.S. Department of Health and Human
 Services, Table 1.2, p. 1-6 (1998, May).

5. According to the United Nations, illegal drugs create enormous profits
-- kilogram of raw opium in Pakistan averages $90, but sells for $290,000
in the United States.

 Source: Associated Press, "U.N. Estimates Drug Business Equal to 8 Percent
 of World Trade," (1997, June 26).

6. According to the United Nations, profits in illegal drugs are so
inflated, that three-quarters of all drug shipments would have to be
intercepted to seriously reduce the profitability of the business. Current
efforts only intercept 30% of cocaine shipments and 10%-15% of heroin
shipments.

 Source: Associated Press, "U.N. Estimates Drug Business Equal to 8 Percent
 of World Trade," (1997, June 26).

7. In 1969, $65 million was spent by the Nixon administration on the drug
war; in 1982 the Reagan administration spent $1.65 billion; and in 1998 the
Clinton administration requested $17.1 billion.

 Sources: U.S. Congress, Hearings on Federal Drug Enforcement before the
 Senate Committee on Investigations, 1975 and 1976 (1976); Office of
 National Drug Control Policy, National Drug Control Strategy, 1992: Budget
 Summary, p. 214, Washington D.C.: U.S. Government Printing Office (1992);
 Office of National Drug Control Policy, National Drug Control Strategy,
 1998: Budget Summary, p. 5, Washington D.C.: U.S. Government Printing
 Office (1998).

8. Recent estimates indicate that Colombia repatriates $7 billion in drug
profits annually, which is nearly as high as the total legitimate exports
for Colombia which were $7.6 billion in 1993.

 Source: Trade and Environment Database (TED), TED Case Studies:  Columbia
 Coca Trade, Washington D.C.: American University (1997), p. 4.

9. It is estimated that Colombian narcotics cartels spend $100 million on
bribes to Colombian officials each year.

 Source: Trade and Environment Database (TED), TED Case Studies:  Columbia
 Coca Trade, Washington D.C.: American University (1997), p. 4.

10. In 1993, 98% of Bolivia's foreign exchange earnings from goods and
services came from the coca market.

 Source: U.S. Congress, Office of Technology Assessment, Alternative Coca
 Reduction Strategies in the Andean Region, F-556, Washington D.C.:  U.S.
 Government Printing Office (1993, July).

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Available online at: http://www.csdp.org/factbook/
Questions, comments or suggestions for additions and modifications
may be addressed to Paul Lewin at: csdp@csdp.org

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