The Implication of Drug Abuse in British Economy

Published December 22, 2009

Drug abuse is a serious problem of modern society. It influences almost all areas of social and individual life of the person. It has negative impact on the criminal situation, economic and cultural level of the country. In my article I will centre on the negative impact drug abuse has on the British economy and the way government resists this problem.

When study the impact of drug industry on the economy of the country and each separate individual it’s necessary to take into account three main categories of illicit drugs. First category consists of illicit drugs which are produced from natural products and these group includes such drugs as morphine, heroine and opium. Second category consists of illicit drugs produced synthetically and includes such drugs as amphetamines. Psychoactive pharmaceutical drugs constitute the last category. It’s necessary to keep in mind that different groups of drugs have different impact on the economy of the country. Drugs can have different impact to the life of an individual. They can occupy complementive or substitutive place. In the cases when person is really a drug edict the is much probability that he of she will take more than one kind of drugs. Researches have proved that the drugs of the second and third groups are oftener used to complement the drugs from the first group. Each group of drugs has different impact on the metal, physical and emotional state of an individual and the use of different drugs makes the study of the problem more difficult. Same it makes more difficult to study the economic effect of complement or substitute drugs and this should also taken into account.

Drug abuse has strong negative effects on the British economy. “An investigation commissioned by the European Community found that the identifiable costs of drug trafficking and abuse amounted to $3.2 billion 43 in the United Kingdom, equivalent to 0.4 per cent of GDP or about $60 per capita. Of that amount, about 85 per cent was the value of stolen property, thus clearly identifying crime as the most important side-effect of drug abuse.” (Commission of the European Communities). Every day the country loses millions of pounds because of drug abuse. Sadly but the problem of drug abuse has the tendency to grow and drug addiction brings more and more damage to the economy of the country. Money, which could have been spent on the health care or the development of educational sphere, is spent on the fight with drug abuse. “Based on estimates of some 130,000 to 150,000 hard-core abusers, the average annual costs to society per addict were thus approximately £13,000, or approximately $23,100.” (Commission of the European Communities).

Drug abuse influence is so strong that it touches several economical spheres of the country. First of all it influences work, employment and productivity. The impact of drug addict on productivity is negative. It has big impact on the labour market reducing productivity level. The research proves that the level of unemployment among drug edicts reaches 60% (Mott). Unemployment is a serious state problem, which also has a negative impact on the economy of the country.

Though drug industry creates some work places they bring no profit to legal institutions.

Huge profits obtained by drug dealers bring no profit to the state and undermine the economy of the country.

The estimated loss caused by drug abuse to the British economy reaches more than $3 million per year. (Commission of the European Communities).

Next field of economy affected by drug abuse is pricing policy and thus the income of the citizens. What is notable, researches show that drug abuse influences the income of all population of the country. Researches have also shown that there is an inverse proportion correlation between the level of income of the citizens and their involvement in drug abuse. This means that the poorer the people are the more is the probability of their involvement into the drug abuse.

Drug abuse has a strong negative impact on the situation with the hard crimes in the country.

The deterioration of criminal situation can also have a negative impact on the economy of the country. First of all it increases for the police expenditures, jails keeping and courts. It also increases the flow of “dirty” money and the way drug money are transferred into production or durable valuables can also have negative impact on the economy of the country. Big amounts of drug money can cause inflation. Money laundry and the law enforcement agencies helping criminals can bring serious damage to the economy of the country. Washing out dirty money gangsters ruin the businesses of honest people as they can afford lower prices in order to wash out the criminal money. In addition the illegal profits of these organisations are not shown in any tax declarations and country loses money in this way too. And though laundering rate is comparatively low in Great Britain and makes only about 1-1.5 per cent of in comparison to 20-30 per cent rate in some Asian countries it still causes serious damage to the economy (Levi). Sometimes money laundering is very hard to distinguish or differentiate from simple money spending. It’s necessary to remember that money laundering is a crime while money spending is a part of human rights guaranteed by the constitution.

British government develops different techniques to fight the drug abuse. Suspicious Transactions Reports (STR) used by the British police and tax police are aimed to control the laundry of the money. Reports produce a lot of research work’s investigation of possible money laundry. Unfortunately, they produce many cases to investigate but it doesn’t mean that investigations are successful and that all suspicions’ transactions are connected with criminal activity. It took the government about 15 years to build anti-money-laundering control regime. It had some positive impact on drug distribution control but, in reality, very often “ineffective regulatory obligations in money laundering control are more often the rule than the exception, prompting the comment that the impressive set of instruments amounts to not much more than a façade of control.” (Levi, 45).

Drug addicts become a health and financial burden for the society. Drug distribution results the appearance of more and more drug addicts and this increases the expenditures in the field of the health care. The government has to spend large sums of money to anti-drug companies and treating drug addicts. The course of treatment in institutions for drug addict is very expensive and one course is usually not enough to return person to normal life. It’s evident that this money is taken from the budget of the country and brings damages to the economy.

Drug law enforcement and legal costs compose about 9 per cent of general drug abuse costs (Commission of the European Communities).

Prison keeping makes about 5 per cent of this amount. Healthcare and treatment of drug addicts and rehabilitation costs make about 2 per cent from general amount. (Commission of the European Communities).

Premature mortality, loss of earnings and reduced productivity are also the direct causes of drug abuse. And though their share in the loss caused by other consequences of drug abused is comparatively small, it should also be taken into account.

The negative impact of terrorism on the economy of the country is a proven fact. Latest researches prove that there is a interrelation between illegal drug use and distribution and terrorism. Very often drug magnates make investments into the development of terrorist organisations.

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The Implication of Drug Abuse in British Economy

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