for the Bachelor’s Program in International Economic Relations
MACROECONOMIC EFFECTS FROM THE PRODUCTION, TRADE AND CONSUMPTION OF ILLICIT DRUGS
Diplomate: Scientific supervisor:
TABLE OF CONTENTS:
In many areas of the world, where the climate is unfavorable, the only living is to grow opium, cannabis or coca. These plants are the source for many various kinds of narcotics with differing effect, but equally destructive over the human body and society. There are millions of hectares of these plants where millions of people are employed in their cultivation. Others are occupied with the processing, packaging, transportation, distribution, etc. Still another group of people form the end of the chain, namely the final consumers. All these people around the world have built another economy, which is very different from the official one and regulated by much harsher rules. It has many names and its assessment is often controversial. Exactly this economy, called hidden, underground, black or illegal will be in the focus of this paper. There are still arguments in the economic science concerning the precise definition and scope of this sub-system, but nevertheless it could be said that there is principle consensus about one – the term “black economy’ includes first and foremost illegal activities, such as the trade and traffic of arms, drugs and human beings; trade with illegally acquired property; various kinds of illegal hazard games, etc. This is why any reference to the black economy in this paper will mean the mentioned activities, forbidden by the law. Since the black economy encompasses many kinds of activities, its thorough examination in this paper is impossible. For this reason the stress will be on just one of its main branches – the production, trade and consumption of illicit drugs and the effects it has on the official economy. In this work I will make an overview of all problems, connected to significant negative consequences on the overall macroeconomic development and welfare of nations. In achieving this goal of my paper I will examine the impact on the world economy as a whole and further on will concentrate on the main countries, involved from both the supply and the demand sides – Afghanistan, Myanmar and Laos (the main opium producers), Colombia, Peru and Bolivia (the cocaine producers), the USA and the UK. There will be also a short review of the situation in Central and Eastern Europe, with some attention devoted also to Bulgaria.
IRAN – ECONOMIC DATA
Social Statistics (2001) Iran Middle East Middle-
and N. Africa income countries
Population, millions 65.1 301 2164
GNI per capita, US$ 1 670 2 000 1240
GNI, billion US$ 108.6 601 2677
Population growth (1995-2001), % 1.6 2.0 1.0
Labor force growth (1995-2001), % 4.4 2.9 1.2
Latest estimates, 1995-2001
Poverty (% of population under
national poverty line) 21 - -
Urban population (% of total) 65 58 46
Life expectancy, years 71 68 69
Infant mortality, ‰ 26 43 33
1. Fisher, S., Dornbush, R. and Shmalenzi, R., Economics, Sofia 1997, p. 455
2. See 2, p. 28
3. Statev, S., Formality and Informality in the Economy, Alternatives Magazine, 2002, issues 5-7, p.9
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macroeconomic effects, trade and consumption of illicit drugs, formal and informal economy, combating the products, black economy, illegal activities, cocaine producers, impact on the world economy