TOPIC

2: MANUFACTURE, DISTRIBUTION, PREVALENCE AND BLACK MARKET

PRODUCTION
"It's the money, stupid. After 33 years as a police officer in three of the country's largest cities, that is
my message to the righteous politicians who obstinately proclaim that a war on drugs will lead to a
drug-free America. About $500 of heroin or cocaine in a source country will bring in as much as
$100,000 on the streets of an American city. All the cops, armies, prisons and executions in the world
cannot impede a market with that kind of tax-free profit-margin. It is the illegality that permits the
obscene mark-up, enriching drug- traffickers, distributors, dealers, crooked cops, lawyers, judges,
politicians, bankers, businessmen." National Review (1996).

• McNamara was one of a few politicians who endorsed proposition 19 to decriminalise

marijuana use in California
• This was just defeated by 53.5% votes against
• Global Reporting
o United Nations World Drug Report (2015)
o United Nations Office of Drugs and 
Crime (UNODC)
o Reports transnational operation of the drugs trade
• Focus: cocaine & heroin
o Large global markets

OPIUM
• Global production is rising and is at its second highest level since 1930s
• Two regions of greatest opium production:
o South-West Asia: Afghanistan
§ 2014: Afghanistan converted about 6400 metric tons of opium into 410 tons
of heroin
§ 85% of worldwide production
o Southe-East Asia: Laos and Myanmar
• Total global production: almost entirely accounted for by Afghanistan
• Afghanistan and Myanmar used to produce similar amounts until 2002, when Afghanistan’s
production grew and Myanmar’s production fell
o Political and economic fortunes bear some relationship to opium production
§ Afghanistan saw the rise of the Taliban and war
§ Myanmar saw political reform which has lessened international sanctions and
improved democratic freedom
o The cost of heroin production is lower in Afghanistan than Myanmar, so the
divergence in production may simply reflect free market economics
o The reduction in Afghan output in years 2008/9 could be due to the Allied Forces’
efforts to thwart production
o Rise in local amphetamine production diminishing the market base for opium and
heroin (competition)

COCAINE
• Coca bush cultivation and cocaine refinement are concentrated in Columbia, Peru and Bolivia
• US and Europe are the main destinations of cocaine
• Other routes to Canada, via the Pacific to East Asia and Australia
• 2013: coca bush cultivation continued to decline since 2009
o lowest levels since mid 1980s
o Supply reduction measures successful
• 120 000 ha: Columbia and Peru responsible for about 50 000 ha each, Bolivia 20 000 ha
 TOPIC 2: MANUFACTURE, DISTRIBUTION, PREVALENCE AND BLACK MARKET

AMPHETMINE TYPE SUBSTANCES (ATS)

• Methamphetamine production is increasing
o Primarily trafficked within regions
o New trafficking routes established linking previously unconnected international
markets
o North America – East/South East Asia
o Africa – East/South East Asia
o West Asia (via Turkey) to Europe
• Availability of amphetamine type stimulants has increased since 2009
• Methamphetamine dominates the ATS market
o 2009: 34 tons seized
o 2013: 88 tons seized
• Largest seizures in East and South-East Asia. However, seizures are only a rough proxy for
the number of users
• East and South-East Asia
o 2008-2013: seizure of meth increased, seizures of crystalline form doubled, seizures
of tables increased eight-fold
• Mexico
o 2012-2013: DEA report 18.5% increase in meth seizures at US South-West border

PREVALENCE
• Globally, UNODC estimates that between 3.4% to 7.0% of the population aged 15-64 have
used illicit substances at least once in the past year (2013)
• Cannabis use was by far the most common. Of the “hard” drugs, ATS and opioids (e.g.
heroin) were most common, followed by cocaine & opiates (e.g. morphine) and last was
ecstasy. 

• There may be fluctuations in the types of drugs being used at certain points in time
o Cocaine use down in 2013 but very popular in late 80s
• Data indicates that the prevalence of drug use overall has not changed.
• This does not speak in favour of the ‘war on drugs’ – the predominately punitive approach to
drug control operating during this period.
• At the core of drug consumption lie the ‘problem drug users’: those who inject drugs and/or
are considered dependent (treatment-seeking), facing serious social and health
consequences as a result. 

• 2013: 246 million drug users in the global population
o 27 million are problem drug users
o Around 11%


BLACK MARKET VALUE

• World Drug Report 2009: special feature on black market
o Estimated total global market value is $65 billion USD for opiates
o $88 billion USD for cocaine
§ Cocaine substantially decreased from 1995 value of $165 billion USD
§ One explanation for the increased drug related violence in Mexico is that the
cartels are 
fighting to maintain share of a diminishing market 

• The cost of drugs increase the further they move from the source of production. 

• Breakdown of profit obtained by different operators within the distribution chain for cocaine
o Profit margins increase towards the final sale to the end consumer.
• However, the absolute profits for local producers of cocaine & heroin are enormous
o Afghan Taliban estimated to have acquired an average of $125 million USD per year
over the decade 1998-2008