The United Nations Office on Drugs and Crime came up with two interesting points these last few days. The first, startlingly, but none the less quite plausibly was from the bodies head, Antonio Costas, who claimed that drug money may have bailed out banks during the financial melt down, as banks were struggling to find ‘liquidity’ or inter bank loans. Costas claimed that money from drugs may have been absorbed by the banking system to tide them over. Costas claimed in the UK Observer that as much as $352 billion of drug profits were ‘absorbed’ by banks threatened by collapse. If his figures are correct it is not substantially less than the U.S. treasury bail out.
The same organisation also reported on ‘troubling’ developments in Burma where opium cultivation had climbed for a third consecutive year, doubling its cultivation since 2006. Burma is the world’s second largest producer of heroin and illegal opiates after Afghanistan. This comes only a few weeks after it released yearly figures indicating the continued unhindered rise of methamphetamine production in the country with new trade routes opening up to the west into India and beyond. This came despite apparent considerable efforts by international drug agencies, yet UNODC’s Gary Lewis maintained in interview to me that the government of Burma, as many allege, are not working in collusion with drug producers. This is an issue and accusation that has been elaborated by Swedish author and Burma expert Bertil Lintner through decades of research and publication of the very interesting ‘Merchants of Madness’ book. His accusations are that the Burmese junta tolerates and even colludes with allied armed groups in the production of drugs. It is an accusation given credibility by the undiminished nature of the industry in the country and the fiscal failures of virtually all industries in Burma apart from fossil fuel extraction, drugs and people smuggling.
Indeed the illegal drugs industry was hardly impeded by the global economic slowdown, with amphetamines continuing to grow in consumption and production. It is considered to be one of the world’s top five export industries.
So could we now say that not only has the ‘war on drugs’ been lost but the industry, despite being almost entirely in the hands of ‘criminals’, has also saved the global economy? Adding yet another very compelling argument for the legalisaton, regulation and taxation of this lucrative industry. This apparent bank ‘bail out’ give us a window into the tax dollars that the world is losing to the unregulated criminal economy.
Burma is a case in point of an economy where taxation doesn’t follow money or reflect relative wealth and it is also a society where social welfare, education and most sorts of justice are in dire needs, here more than anywhere we can see the need for regulation as markets fund war lords and gangsters as opposed to health care, education and the betterment of society. If Costas is right it is also the collateral in that ‘war’, drug users and the thousands who suffer and perish as a result of its criminal status who have truly paid the price for the bail out.
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