Illicit drug use is a major social problem with significant impacts on both the social and economic aspects of any country. The dramatic improvements in communication and technology coupled with global economic liberalization have contributed to growth of international trade.
At the same time, the social and political environment has led to improved trade environment attracting substantial investments in many nations. The recent liberalization of trade means that goods, human labor, and capital can freely move across national borders with minimal restrictions.
This has resulted to a good macroeconomic environment for growth of legitimate international trade (Reuter, & Kleiman, 1986, p.19). However, the liberalization of trade has also provided an opportunity for organized gangs to engage in drug trafficking on a global scale.
Cartels, consisting of drug producers and traffickers, produce illicit drugs, usually in developing countries, and distribute them into different countries gaining huge profits. The proceeds from drug trafficking are then invested in strategic financial centers as legitimate investments giving good investment returns to the drug traffickers.
This has only contributed to widening the economic inequality gap affecting the economic growth of a country. Trade in illicit drugs affects the global economy as well as the socio-political aspects of citizens.
Economic Impacts of Illicit Drug Trafficking
Drug trafficking is a major global concern due to the substantial impacts it has on the economies of many countries. While drug trafficking may have immense “benefits” to drug traffickers and cartels, it however, causes considerable consequences on the health and financial systems of a country (Saffer, & Chaloupka, 1995, p.12). In particular, countries that have less stringent anti-trafficking laws tend to experience substantial social and political consequences.
This arises because much of the profits obtained from drug trafficking is invested in industrialized nations with the developing countries, which are often the source of these drugs, experiencing less investments (Reuter, & Kleiman,1986, p.21). As a result, a number of producer developing countries are experiencing stagnated economic growth.
Drug trafficking contributes to drug abuse in the society. Countries allocate substantial resources to fight illicit drug trafficking through various law enforcement agencies. In addition, resources are allocated to healthcare to fight drug-related illnesses (Hanson, Venturelli, & Fleckenstein, 2009, p.51). A country’s economy suffers as labor productivity declines because of illnesses and drug-related deaths. Drug trafficking also contributes to increased drug-related crime affecting security and regional stability.
Drug abuse is rampant particularly among youths in the age group of 18-35 who constitute the majority of the working population. Drug abuse among youthful population reduces their chances of finding gainful employment. It also affects their work performance, if employed, which results to dismissals.
According to Lawrence and Vinod, unemployment in both developed and developing countries is partly attributed to substance abuse (1993, p.117). In addition, the prices of illicit drugs are not regulated dependent only on the associated risks during production and trafficking; this means that the illicit drug industry generates substantial income that affects the economy of countries.
The drug income obtained by traffickers in producer countries is often used to import illegal luxury goods from other countries, which affects the price levels of local products. In producer countries, people neglect the production of essential commodities as they embark on illicit drug production. This also affects prices of essential commodities. Drug trafficking also increases income inequality as only few people in drug cartels get the drug profits as the drug farmers get comparatively less profits.
Social Impacts of Drug Trafficking and Abuse
While the family and community play a significant role in reducing substance abuse among the youth, parental drug abuse strains most family relationships. Peer influence especially among the youth also contributes to drug abuse. Family factors including parental absence and parental use of illicit drugs also lead to drug abuse.
In addition, drug abuse produces many negative impacts on the health of individuals affecting their productivity (Hanson et al., 2009, p.53). Addiction to drugs such as heroin and cocaine affect the general health of the users with diseases such as HIV/AIDS being prevalent in drug injectors. This in turn affects the productivity of the general population, which adversely affects the economy of a country.
Environmental damage is increased by drug trafficking particularly in producer countries as forests are cleared for drug farming. Processing of the illicit drugs also releases dangerous chemicals into the environment (Hanson et al., 2009, p.57). Improper disposal of wastes resulting from processing of cocaine and heroin affects the environment. Drug trafficking also contributes to increased criminal activities that affect the security of citizens.
Drug addiction contributes to increased robbery and prostitution as the addicts seek for money to finance their drug use. Consequently, many resources are allocated to law enforcement officers to fight these drug-related vices at the expense of the other sectors of the economy.
Drug trafficking is major concern because of its socio-economic and political implications. Illicit drug money, once it enters an economy, it affects the political systems, the civil society, and the productivity of a country contributing to social disintegration and collapse of democratic governance. In addition, drug abuse affects the health and the productivity of human resource of a country, which in turn affects its economic growth and development.
Hanson, G., Venturelli, P., & Fleckenstein, A. (2009). Drugs and Society. London: Johns and Bardon Publishers.
Lawrence, S., & Vinod, T. (1993). Recent lessons of development. Research Observer, 2(1), 117.
Reuter, P., & Kleiman, M. (1986). Risk and prices: an economic analysis of drug Enforcement. Crime and Justice: An Annual Review of Research, 7(3), 19-21.
Saffer, H., & Chaloupka, F. (1995). The Demand for Illicit Drugs. National Bureau of Economic Research, 6, 9-14.