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THE ECONOMY OF ILLICT DRUG INDUSTRYAND THE SOCIAL IMPACT

Presented By:Nikhil BhatiaNitesh KasanaNavneet GargNitin Shivani

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Why it Needs Attention

• Annual worldwide illegal drug sales are greater than the gross

domestic product of 88% of the countries in the world.

• 5% of world's adult population have taken an illicit drug at

least once in 2010.

• Around 2 lakh people die every year because of illegal drug

overdose.

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Flow Of Presentation

• What is a drug and Types.

• Brief History.

• Worldwide picture.

• Indian Scenario.

• Analysis of Industry and Users.

• Social And Economic Impact.

• Steps to Tackle the problem.

• Survey Report.

• Future Trends

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• A drug is a substance which when taken by a living body may have positive effects such as diagnosis , cure, prevention of a disease or cause negative effects to central nervous system that leads to it’s addiction.

What is a drug?

• Natural drugs These are those drugs that are

derived from nature such as drugs in plant form that are not human made.

Examples of natural drugs are cannabis, opium, coca products, cocaine, morphine etc.

• Chemical drugs These are those drugs which involves

chemical substance in it. These are man made drugs.

Examples of chemical drugs are amphetamine, ecstasy, LSD, benzodiazepines, heroin ,hallucinogen etc.

Types of drugs

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CannabisA drug derived from a family of plants that includes hemp.It was first originated around 6000 B.C. in China when cannabis seeds were used as food in China.

Opium  It is a drug derived from the dried juice of unripe pods of the opium poppy.The first known cultivation of opium poppies was in Mesopotamia, approximately 3400 BCE. In India around 1000 B.C. opium was cultivated.

Brief history of drugs

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Cocaine It is a drug derived from coca leaves. The drug was first originated around 3000 B.C. by the Incan empire of Peru.

Nicotine It is a psychoactive constituent of tobacco.It was first used by the Europeans in the 16th century when French ambassador in Portugal sent tobacco and seeds from Brazil to Paris in 1560.

Brief history of drugs

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Morphine In 1803, morphine is isolated from opium poppies by 20 year old German pharmacist Friedrich Wilhelm Adam.

Heroine In 1898 Bayer company introduced heroin as a substitute for weaning addicts of morphine but it also appeared to be as addictive as morphine

Amphetamines It is a group of drug that stimulate central nervous system. It was first synthesized in 1887 in Germany.

Brief history of drugs

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Ecstasy Ecstasy, "E" or "X" are the street names for MDMA, or (get ready for a long one)3,4-methylenedioxymethamphetamine. MDMA was first synthesized by a chemist looking for substances to stop bleeding in 1912. No one paid the compound much mind for the next half-decade, but by the 1970s, MDMA had hit the streets.

LSD

It was first synthesized in 1938 in Basel, Switzerland by Albert Hoffman. LSD was popularized in the 1960’s in U.S. when American students were encouraged to tune on, tune in and drop out. This created a counterculture of drug abuse in U.S. which was spread to U.K. and the rest of Europe.

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Current Scenario

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Present State

• Illicit Drug Use – stable over five years

– 3.4 - 6.6% of the world adult population.

– 10-13 % of drug users have drug dependence and/or drug-use disorders .

– prevalence of HIV (20 per cent), hepatitis B (14.6 per cent) and hepatitis C

(46.7 per cent) among injecting drug users continues to add to the global

burden of disease .

– approximately 1 in every 100 deaths among adults is attributed to illicit drug

use.

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Shift in the Patterns

• Opium

– declined usage over the last century.

– Global opium production levels increased until 2000, and remained

basically stable thereafter.

• Cocaine

– Global production of cocaine increased sharply in the 1980s and the

1990s and has only stabilized over the past decade.

• Cannabis

– continues to be the world’s most widespread illicit drug.

– usage is still increasing in many developing countries.

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Major Drug Producing Nations

• Afghanistan– Grew 93% of opium poppy in the world in 2007.

– Export value of this harvest - $4 billion; more than a third of the country's combined

GDP.

• Colombia– World's #1 cocaine supplier, also a major supplier of heroin and precursor chemicals.

• Burma– World's 2nd largest producer of opium poppy.

• Bolivia

– 3rd largest producer of cocaine in the world, accounting for an estimated 127

tons.

– It is legal to grow up to 29,652 acres of coca leaf for traditional uses.

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Use and Dependence

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Major Transit Hubs• Cocaine

– The Bahamas, Brazil, Dominican Republic, Guatemala, Mexico, Nigeria

• Heroine– Dominican Republic, India, Ecuador, Nigeria,

• Marijuana– Bolivia, Haiti, India, Jamaica

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Major Trafficking Routes• Caribbean & Mexican Routes

– Cocaine shipments from South America transported through Mexico or Central America are moved to sites in northern Mexico. Smaller loads are then smuggled across the U.S.–Mexico border.

– Primary cocaine importation points - Arizona, southern California, southern Florida, and Texas.

• Chilean route– Primarily used for cocaine produced in Bolivia since

the nearest seaports lie in northern Chile. While the price of cocaine is higher in Chile than in Peru and Bolivia, the final destination is usually Europe, especially Spain.

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Trafficking Routes

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Estimated Economic Cost to Society Due to Substance Abuse and Addiction

• Illicit Drugs: $181 bn/year• Alcohol: $185 bn/year• Tobacco: $193 bn/year ____________________________________ Total: $559 bn/year

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According to a 2004 United Nations Office on Drug and Crime (UNODC) and Govt. of India report, India alone has nearly 9 million cannabis users, followed by 2 million opiate users and 0.3 million sedative hypnotics users.

Indian Perspective

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Historical Profile of Intoxicant Usage in India

Brought to India by the Arab traders

Babar(1524-1530)

encouraged poppy

cultivation

British attempted

to popularize its use to increase revenue.

China imported 15 tons of

opium from India, increasing to 75 tons by 1773

When all restrictions were lifted,

it had increased to 2,555

tons.

India became the only

supplier of licit opium

for the world’s

requirements.

Injecting drug users

(IDU) became

increasingly prevalent

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Present Scenario• India ranks second to Afghanistan in production of licit opium.• In 1999 an estimated 300 metric tons of licit opium was diverted to the black

market, converted into heroin ‘brown sugar’ and sold. • Since the early 1980s use of opium derivatives like heroin has been wide

spread in the major metropolitan cities of India like New Delhi, Kolkata, Chennai and Mumbai etc.

• During the 1990s injecting pharmaceuticals, in particular buprenorphine took an epidemic proportion and often used as an alternative among heroin users.

• Nearly 32% of heroin seized in India has its origins in Afghanistan or Pakistan.

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Contributing States of India• Licit Opium poppy is grown in the central Indian state of Madhya Pradesh

(Mansaur), Rajasthan (Kota, Jodhpur,etc.) and Uttar Pradesh (Gazipur).• Jammu and Kashmir, Uttar Pradesh, Manipur, Mizoram, Nagaland and

Arunachal Pradesh have been found to be indulging in illegal growing of opium poppies.

• A purer variety known as ‘white sugar’ is available in the states of Manipur, Nagaland and Mizoram, which are closest to the source of heroin.

• In Manipur, heroin has been sold since 1973 and its use has become widespread.

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Trafficking routes of India

• Strategically located between Southwest Asia (the Golden Crescent) and Southeast Asia (the Golden Triangle), the two main sources of illicit opium.

• The country's geographic location makes it an attractive transshipment area for heroin bound for Europe, Africa, Southeast Asia and North America.

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• .

• Smuggling of heroin into India from Afghanistan via Pakistan continues to increase.

• Licit and illicit manufactured opiate/psychotropic pharmaceuticals are often diverted in small quantities to the U.S. as illegal "personal use" shipments.

• There is also evidence that opium is grown illicitly in India, especially in the northeastern regions.

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Addiction Pattern

• In rural Rajasthan swallowing and smoking of opium is very common. • Addictives are often used in India in open public places without any hesitation. • As a general rule injecting equipment is discarded inappropriately. • Intoxication of a mix of cannabis with tobacco is a common practice.

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The table below outlines total drug seizures made in India during the period of 2004 through December 2010.

Name of DrugTotal kg seized in

India 2004

Total kg seized in

India 2005

Total kg seized in

India 2006

Total kg seized in

India 2007

Total kg seized in India

2008

Total kg seized in India

2009

Total kg seized in India

2010

Heroin 468 259 246 900 1,155 561 550

Hashish 394 430 955 3,766 4,347 2,321 2987

Opium 20 0 787 1,758 1,334 1,102 1282

Ganja (Marijuana) 10,502 5,572 14,919 75,407 113,025 135,922 144,487

Cocaine n/r .63 200 5 13 11 11

Methaqualone n/r 330 19 1 2, 382 33 0

Acetic Anhydride (ltrs) 2,370 51 n/a n/a 1,200 47827

Ephedrine 71 7 n/r 295 38,479 606 2,100

Amphetamines n/r n/r n/r n/r 22 11 47

n/r = not reported CBN,India

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ANALYSISINPUT

OUTPUT

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Analysis of Drug Industry

Country and their role: Producing:

• Developing Countries.

• High Crime rate and Insecurity.

• Social and Political instability.

Distributing:

• Close proximity to both manufacturing and consuming

country.

• Flexible laws and not so stringent rules and regulations.

Consuming:

• High in developed countries in terms of revenue.

• Low-grade drugs consumed in poor countries.

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Analysis of Drug Industry

Demographics Age: Around 70% of consumption is by people in age group of

15-27 years.

Gender: More common among males and In US alone, in 2010

around 18% of male and 12.5% of females above 12 years of

age have consumed illicit drug at least once.

User Types:

Addicted User: Regularly consumes and generally consume

when alone and is less productive and less price sensitive.

Recreational User: Ocassionaly consume and consume in social

gatherings and is price sensitive.

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Reasons for Consumption

Individualistic:

• Loneliness.

• Depression.

• Work overload and difficult job conditions.

• Built Physical endurance.

• Poverty

• To feel High

Regional:

• Youth Protest Movements against war and oppression. Ex:

Hippies movement in US in 1970’s.

• A significant number of illicit drug users regarded

themselves as progressive citizens and reject materialism,

consumerism and conformist behaviour and is prevalent

among the socialist class.

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Social Impact

• The biggest is the number of deaths which is 2 lakh

and half of them are in their mid-30’s.

• One in 5 persons receive treatment.

• Drug use via injection is used by 16 million people and

out of these 20% are HIV Positive and 20% are

suffering from Hepatitis B and around 50% from

Hepatitis C.

• In UK almost 90% of the social and economic costs of

crimes crimes(fraud, burglary, robbery and shoplifting)

were related to drug abuse in 2010.

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Economic Impact

• In US in 2010, US $24 billion was spent on healthcare due to

illicit drug use.

• On average, the United States estimates resulted in a

potential productivity loss of slightly more than $1 million for

each drug-related death.

• Average drug industry is around US $400 billion

and it employs around 70 million people.

• Economy of countries like Afghanistan and other

African nations are surviving because of this

industry only.

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Comparative Analysis

Particulars Alcohol Tobacco Illicit Drugs

Prevalence rate among global population

42% 25% 10%

Global Deaths Percentage 3.6 8.7 0.4

Life years lost per 100 users 2 5 19

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Steps to Reduce consumption

Manufacturing Banned By a Country.

Consumption Banned By a Country.

Signed a Treaty by many countries to ban its production and consumption.

???

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Steps to tackle the Illicit drug consumption

LOGICAL:

• Medical prescriptions suggested.

• Its production and consumption banned.

• Rules and regulations more stringent.

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Steps to tackle the Illicit drug consumption

PSYCHOLOGICAL:

• 12 Step Model.

• Focus on Physical, emotional and spiritual level.

• In this they are made to realise that the substance is the

symptom not the disease.

• 90 days minimum stay at centre.

• Reduce the consumption and make them strong to face the

outer world.

• Challenge is high drop out rate.

• NA- Daily meetings held at various locations across the

world.

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Survey Report

10%

18%

32%

40%

Age Distribution

<2020-2525-30>30

Service36%

Self32%

Student12%

Un-em-

ployed20%

Occupation Distribution

<12th20%

Graduate50%

PG30%

Education Level Distribution

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Survey Report

38%

25%

13%

25%

Reason for addiction distributionCuriosity Stress Others Depression

>862%

5 to 824%

<514%

Frequency of Usage Distribu-tion Per Month

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Survey Report

Yes36%

No46%

Can't say18%

Legalisation Distribution

48%

32%

10%

10%

Place Of Procurement Distribu-tion

Friends Drug Paddlers Chemist Shops Others

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Steps to Reduce consumption

Should Illicit drug consumption be legalised?

Parti al ly YES

Why?

• Only less harmful one should be legalised.

• Impose Tax on them.

• Use the revenue in rehabilitation and de-

addiction centre and promoting and

launching campaigns.

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Future of this Industry

• Consumption shifting to developed countries which

would mean heavier burden for countries relatively

less equipped to tackle it.

• Increase in poly drug use which is a combination of

two drugs and is very dangerous.

• Non-medical use of prescription drugs.

• Switch from natural to synthetic drugs.

• Technology has played a important role in evolution

of this industry as it leads to faster and better

communication.

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Sources

• World Drug Report 2012 by United Nations.

• www.economist.com.

• Narcotics Anonymous.

• Alcoholic Anonymous.

• www.drugabuse.org.

• www.who.int.

• Miscellaneous Articles and Readings.

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