Remarks
by
Antonio Maria Costa
Executive Director
United Nations Office on Drugs and Crime
To the Diplomatic Academy
Warsaw, Poland
1 February 2005
Thank you for inviting me to Warsaw, and giving me a chance to speak to this distinguished audience. It is an honor to be here with so many old and new friends. I want to talk to you today about drugs and organized crime. Let me speak plainly: drug dollars are the cash cow on which Transnational Organized Crime relies. It uses the profits from drug trafficking, estimated at 30 billion per year, to bankroll terrorists, capitalize other illegal enterprises, expand criminal markets, and to subsidize war, violence, anarchy and lawlessness.
There are some people who argue with this view.
They claim the transaction between drug trafficker and drug user is simple and straightforward—that it has no broad effect on society, and no lasting impact on anyone but the drug user himself. Wrong. Very wrong. The fact is that the trafficking and use of illegal drugs continues to have a profound impact on everyone’s life.
Drug trafficking, drug use, and the illegal proceeds of drug sales distort the world’s economies, destroy the lives of entire generations, and decimate populations via HIV/AIDS.
Global Supply and Demand
Let me tell you where we stand today in regard to global supply and demand. Production is down everywhere in the world – with the exception of Afghanistan. Demand in down in the United States, relatively stable in Europe, and growing, unfortunately, in Russia and China.
Just last week I was in Afghanistan to talk to newly elected officials there about drugs and their impact on the Afghan economy and its new democratic government. Today, Afghanistan supplies roughly 87 percent of the world’s heroin to millions of consumers across Europe, Central Asia, Russia and the CIS countries.
Afghanistan is both the largest cultivator of opium in the world, and the world’s largest supplier, a double record. In spite of this distinction, only 3 percent of Afghanistan’s growing fields are devoted to the cultivation of poppies, and only 10 percent of the population is involved in the drug industry.
Economic Addiction to Drugs
That may not sound like much — but in Afghanistan, the revenue derived from opium is almost twice the amount of money the country has been taking in as international aid. An acre of poppies returns 27 times more than an acre of wheat.
Today, narco-dollars account for half of Afghanistan’s Gross National Product. That means that opium and heroin are fuelling the Afghan economy — bringing economic development to some of the poorest communities on earth, creating jobs and markets for taxable imports, and restoring hope to people who believe they are lucky to be part of any “trickle-down” economy, even one driven by illegal drugs.
Afghanistan is a country where, until recently, most people travelled by donkey, and telephones, electricity, and even indoor plumbing were unknown luxuries. Today those same people are literally trading in their donkeys for shiny new SUV’s, loaded with cruise control, AM/FM/CD, moon roofs and satellite navigational systems. The donkey goes into a pen in back of the Land Rover dealership, and a new SUV rolls off the showroom floor. Mountain dwellers who used to signal to one another by hand, or by whistling across great distances, now sport cell phones.
In villages and towns, flat-screen televisions, DVD players, boom boxes, motorcycles, Jaguars and Mercedes, are everywhere – symbols of the new, drug-driven prosperity. But here is what is concerns us most — all of these “blessings” flow from a criminal, underground economy in which increasing numbers of Afghan citizens have a real and substantial stake. Intentionally or unintentionally, they have entered into a pact with the devil.
Some people think drug money travels in a straight line—from grower to wholesaler, retailer, consumer, and back again to the farmer in need of seed for a new crop of opium poppies. They think it these criminal proceeds never touch good people, or innocent families, or unemployed men and women just looking for a day’s work.
But they do.
It doesn’t take long before the billions generated from the sale of Afghan heroin seep into the broader fabric of everyday society. Heroin has brought prosperity to thousands of ordinary citizens in Afghanistan, and it has made millionaires out of tribal chiefs and warlords. And if the choice is between prosperity — delivered and sustained by criminal organizations — and poverty, it’s no choice at all.
But here is the dilemma, and it is a very serious one . . .
Countries become addicted to drug economies the same way people become addicted to drugs. That addiction — of people, institutions, and culture— to drug-dollars, is a real and immediate danger in Afghanistan. Indeed, even legitimate income flowing into the treasury of the new government, tax revenues, for example, comes from the import of luxury items: cars, trucks, consumer goods, purchased with drug profits.
Connection between Drug Dollars, Corruption, Crime
In Afghanistan, or anyplace where drug money fuels the economy, drug dollars invariably make their way into the corridors of power as payoffs to government officials, bribes to courts and prosecutors, and as election funding for “drug-candidates,” traffickers who run for office and win. There’s also a brisk trade in “drugs for guns,” a global, 24/7 exchange we know fuels terrorism and violence around the world.
What chance does democracy have in this environment? —None.
How can the Rule of Law prevail? —It cannot.
Tough Remedies in Afghanistan
Last week I was in Afghanistan to talk to President Karzai and members of his administration. I encouraged him to take tough measures against drug traffickers, and to support “a negative pledge’ — a commitment by farmers to refrain from drug cultivation, as a condition for the receipt of grants, loans, and other development assistance. If eradication efforts do not materialize, monies from donor States, NGOs, and other multilateral agencies would be rescinded.
The world needs to see results in Afghanistan, counter-narcotic efforts that prove this fledgling democracy can, in fact, deliver on its promise to eradicate Afghanistan’s poppy fields. I have also urged the Government of Afghanistan, and partner States threatened by an increasing influx of heroin, to respond to this challenge by offering one another mutual legal assistance and creating legal mechanisms to support the prosecution of drug traffickers. This may involve the issuance of international arrest warrants, a very bold, but necessary action.
We also talked about the need for judicial reform in Afghanistan. European States and other nations willing and able to extradite traffickers for trial in other countries need to help investigators and prosecutors in Afghanistan build strong cases that will hold up in any court. Without a strong and effective judiciary, drug traffickers and their dirty dollars will continue to do what they do best — buy police chiefs and judges, intimidate witnesses, and fund start-up enterprises like brothels filled with the victims of human trafficking — for the most part, women and children who are sexually exploited and left to die from HIV/AIDS.
UNODC Heroin Purity Alert
There’s another danger ahead of us as well. Not long ago, UNODC issued a special “drug alert” about the increasing purity of Afghan heroin. We sent letters to health officials around the world, telling them we expect to see a real escalation in the number of drug-related deaths and overdoses in 2005.
In Northern Europe it’s already happening.
Eastern Europe, Russia, the CIS countries, and even China, are next.
Drug Myths: Legalization is the Solution
Some people argue that drug legalization would change all this. It’s a myth that won’t disappear. Supporters call legalization a “realistic approach.” I call it wishful thinking. The fact is that as bad as the drug situation is today, these are not “the worst of times” as regards the cultivation and trafficking of illegal drugs.
Drug Control - Positive Indicators
Today, the infamous Golden Triangle is virtually drug free. Coca cultivation has decreased dramatically in Colombia and the Andean region. And here’s more positive news: in 2005, we expect only a marginal increase in the supply of opium worldwide, the result of a significant decline in Myanmar and Laos.
The history of drug cultivation and production also holds a lesson for critics who think drug control is an impossible dream. The problem we face today pales compared to the amount of opium coming out of India and China at the beginning of the 20th century. In the early 20th century, 50 million people were addicted to heroin in China.
In 2005, there are 15 million users.
One hundred years ago, global opium production had risen in India and China to an astonishing 30,000 tonnes, following its de facto legalization in China.
In 2005, the global production of opium, licit and illicit, amounts to only 5,000 tonnes.
A century ago, 80 million hectares were under cultivation in China – dedicated to opium.
In 2005, even factoring Afghanistan into the picture, less than 150,000 hectares are dedicated to the cultivation of poppies.
This decline, this progress, did not occur by accident.
It reflects serious, real-world efforts to eliminate drug cultivation and production. And it proves, beyond a doubt, that governments with the political will, strong legislation, and effective law enforcement and economic development policies can tackle this enormous problem — and solve it.
I wish I could convince the sceptics of that. Because none of these remedies will work without a commensurate shift in public attitude. Governments and their citizens must be of the collective opinion that drug production and drug use cannot be tolerated or accommodated. Without that consensus, we simply cannot win.
Here’s another myth – that legalizing drugs will eliminate organized crime.
Organized crime did not disappear when Prohibition ended in the 20’s in the United States; it simply diversified, moving resources and capital into other criminal sidelines. Indeed, legalizing drugs could make the current situation even worse.
Drug prices in consumer countries would go down. The consumption of increasing amounts of drugs would rise. And here’s some information for the economists in this audience — I hope I’m not the only one: studies have shown that price elasticities for heroin and cocaine amount to around –0.7 or more — which means a reduction in price of 10 percent would increase consumption by at least 7 percent.
Following legalization, prices in consumer countries would fall by more than 90 percent. The result? A zero decrease in organized crime, and a huge increase in the number of addicts worldwide.
Here’s one last legend about Organized Crime — it’s just a business, like any other business with multinational interests. It’s true, of course, that since their inception over a century ago, the Italian N’dragheta, Cosa Nostra, Sacra Corona and the like – the founding fathers of world’s modern mafias – have made it a practice to cooperate and collude with white collar business and corruptible politicians.
Their illegal transactions make their way into accounting books looking like ordinary business deals. Profits are diligently invested. Returns are properly shared, and retired mobsters, or criminal employees who’ve suffered ‘on the job injuries’—usually at gunpoint—receive retirement pensions or ‘disability payments.’
So the idea that criminal enterprise and legitimate industry operate in parallel ways and in similar environments has become part of our modern, commercial fork-lore. But make no mistake. There are critical differences between criminal enterprise and legitimate industry.
On one end of the spectrum are the corporations who behave like good citizens. Indeed, these are the majority of businesses, and they demonstrate, not only high levels of efficiency and direction, but also transparency, ethical business practices, concern for workers and customers, respect for our environment, and good private/public relations.
For organized crime, a competitive advantage may materialize in the form of a gun, a bribe, or a threat — or even through the destruction of a village and the untimely demise of all its inhabitants.
Organized Crime and Diversification
Organized crime is always on the lookout for new opportunities —and war, or regional conflict, is one of the best. War provides almost unlimited occasions for illicit enrichment via profitable new trading deals. Insurgents can plunder a region’s natural resources and trade these resources for weapons. In conflict zones, criminal networks routinely operate as intermediaries between legitimate businesses and black market operators.
Organized Crime was involved in the trafficking of light arms during the Balkan Civil War, arms which were re-exported to Liberia and the Ivory Cost. And there are reports that these same arms are now finding their way to Sudan and east Congo.
Light arms trafficking, in particular, has led to a dramatic increase in casualties in war-torn regions and states, and to criminal violence afterwards. This is something that needs to be considered by lawmakers in countries that have not yet ratified the UN Protocol against Firearms.
Criminal organizations working with insurgents have also distributed drugs to child-soldiers, a technique used to turn these children into killing-machines. Ironically, the UN Office on Drugs and Crime is only able to reach these young victims after they have reached the age of adulthood. Still, in many cases, we are helping them cope with what often remains a lifetime addiction to drugs and violence.
Something else we often see during regional conflicts are “unholy alliances” between organized crime and local warlords. We see this today in Afghanistan, Colombia and Myanmar. Not too long ago, we saw the same thing in Guatemala, Peru, Bolivia, and Somalia. Local warlords – they’re also called insurgents, commanders, guerrillas, or contras — always have an interest in blocking progress toward conflict resolution. For criminals and warlords, anarchy and lawlessness is good for business.
In post-conflict periods, when states try to focus on rebuilding and caring for citizens battered and displaced by war, criminal operators dig in for the long term. By this point, organized crime has become a major stakeholder in anarchy and lawlessness. Its goal is to maintain control of profitable turf, by nurturing discord, reopening old wounds, and undercutting the efforts of peacemakers.
The Drug Connection
None of this, of course, would be possible without the annual guarantee of billions in drug revenues. Without these funds, undercapitalized, the criminal underworld would languish. The Rule of Law could take root in parts of the world where outlaws reign today. And for millions of people, in Africa, Asia, and in developing countries across the world, security, development and democracy might finally be within reach.
Attached to these remarks are three charts, each of which represents the impact of organized crime on the ability of states to ensure stability, development, and democracy.
The first chart offers a global view of the different level of stability enjoyed by various states and nations. States marked in dark blue exhibit a very high level of internal and external stability —red states possess the lowest levels of stability.
Chart 1. Delivery of Security (Internal and External)
The second chart represents the impediments to the delivery of development or good governance in regions where organized crime retains a foothold. As you can see, the majority of nations and states rank high in this respect. Again, the red states, located on the African peninsula, have yet to provide their citizens with the institutions they need to ensure the rule of law, good governance and economic security.
Chart 2. Delivery of Development (Good Governance)
The third chart offers us a clear view of the ability of various states to create and sustain free and democratic rule. Again, the red states, which spread across Africa, Central Asia, the Middle East and the Far East still have a long way to go. In many cases, organized crime and the corrupt societies nurtured by trans-national criminal organizations preclude democracy. And clearly this has to change.
Chart 3. Delivery of Democracy
The last chart offers us a stark insight into the plight of nations that rank lowest in all three categories, that is, in their ability to provide stability, guarantee security, and deliver good governance to their citizens. It is plain that these nations, again the red states, continue to be vulnerable to organized crime, and its drug-financed activities. They are also the poorest states, the least developed, the least secure, and the areas marked by the most miserable living conditions.
Chart 4. The State fails to deliver & organized crime holds sway
Responding to these challenge won’t be easy. We must help these states reinstitute the rule of law, and these efforts must extend far beyond the creation of local police forces to the construction of a legal and judicial system strong enough to offer the population a genuine sense of security. We must also help these states to strengthen their ability to prosecute criminals on a large scale, and to build and maintain adequate detention facilities.
Individuals tried for war crimes and found guilty must be jailed. The victims of regional conflicts, child soldiers, drug users and other populations scared by violence, must be rehabilitated and reintegrated into normal society. And drug users must be offered opportunities for rehabilitation.
None of this can happen until we admit the following: the victories of Organized Crime in failed states depend on revenue realized through drug trafficking.
The notion that a single good deed can cascade through society and change the lives of disparate beneficiaries is an old one. It reinforces the ancient human “hunch” that we are truly one family. It is impossible to believe that idea without also knowing, instinctively, that one evil inevitably flows from another, and that every criminal act is likely father to another, perhaps more terrible, crime.
Let me end these remarks with the same claim I made at their beginning – drug dollars are the cash flow on which Organized Crime depends.
You may not see the connection between a single heroin buy on the streets of New York and the kidnapping in Southeast Asia and trafficking of a child for purposes of sexual exploitation, but it’s there.
You may not understand the relationship between a warlord’s greed in Afghanistan and a terrorist bombing in Western Europe, but it’s real.
And you may not realize that revenue from a supposedly “harmless” drug like marijuana is enough to provide weapons to an entire army of child militias in Africa, but the connection exists.
It is our job, yours and mine, not to be “practical” about drugs and satisfied with halfway solutions, but to be passionate in our opposition to drug trafficking and determined, once and for all, to end it.
Thank you.
