FORGET THE WAR ON DRUGS-IT'S REALLY ALL ABOUT THE MONEY

Drugs are big business.

Illicit intoxicants are produced, sold or consumed in every country in
the world, employing farmers, security guards, chemists, accountants,
pilots, lawyers, bankers and dealers.

The best estimates claim that the international drug trade is worth
about $450 billion a year-a little less than the GDP of Russia and a
little more than the revenue generated by the entire world-wide
tourism industry.

And business is booming: both the number of drugs produced and the
number of people taking them continue to grow.

It's easy to see why the drug trade is so lucrative, as drugs enjoy
perhaps the biggest mark-up on prices of any industry.

Columbian farmers and exporters have the choice of producing coffee,
which receives on average about an 18 per cent price mark up on the
sale price from the production price, or cocaine, which is marked up
roughly 1 000 per cent. These staggering dividends ensure a
practically limitless supply of people willing to live outside the law
and facilitate the production and distribution of illegal drugs.

The Andes region in South America is one of the largest drug producing
regions in the world.

Large syndicates regularly employ European educated marketing and
economic graduates, and it is the business tactics involved in the
smuggling and distribution of drugs that causes the bulk of these
substances' harmful effects.

This is particularly noticeable in the Caribbean, which lies at a
crucial crossroads for smuggling drugs out of South America and into
Europe and North America.

The big cartels in South America use small time Caribbean gangsters to
smuggle their product, paying them not in cash but in cocaine.

These gangsters have, in turn, created local addict markets in order
to off-load their products.

Similar effects can also be seen in Puerto Rico, which has one of the
largest populations of heroin users in the world.

This stems from the marketing decision of the Andean cartels to test
the demand for heroin in Puerto Rico (considered to be culturally
similar to the US) before making the large investment in the American
market.

Local dealers were instructed to give free samples of heroin with the
cocaine, and sure enough, the use of heroin exploded.

A market created from scratch because of a business experiment.

An even deeper franchising of the drug trade has taken place in
Afghanistan. In the land responsible for 92 per cent of the world's
poppy crops, production and export of poppies (almost exclusively
going towards opium production) now accounts for over 30 per cent of
GDP. Elimination of this trade would stop the only solvent, growing
option for many of the rural poor and (unless accompanied by decades
of economic growth) would have disastrous effects for the country as a
whole.

A similar argument can be made for hashish farmers in northern
Morocco. Not only is cannabis farming the main source of income in the
area, but hashish smoking occupies a traditional role in local
culture, and many in the region feel it should be tolerated. These
poor rural farmers are making the simple choice to grow the crop that
consistently gets them the most money.

Herein lies the basic problem with the way the War on Drugs is
conducted. The front line of the war is in the developing world, where
police carrying a machete and a can of kerosene hunt down crops in
order to burn them. All this does is harm the farmer and perhaps cause
a temporary spike in the street price of drugs; nothing is done to
dismantle the distribution chain. This groundwork, along with the
patrolling of seaways to intercept drug carrying vessels, makes up the
mighty two-pronged approach of the War on Drugs. By best estimates,
the US (the catalyst of the global War on Drugs) spends over $12
billion annually to combat the drug trade.

This is money spent only policing the drug industry; when other costs,
such as health care, incarceration and rehabilitation are added into
the equation, the total can reach over $60 billion dollars a year in
the US alone.

The rapid growth of synthetic drugs, such as ecstasy, is threatening
to even further render the War on Drugs obsolete.

Synthetic drugs can be made anywhere, and very cheaply.

And inversely, distribution chains of synthetic drugs usually flow
from North America and Europe into the rest of the world. The
anti-drug community, hard wired to prevent drug flows into these
countries, is proving completely incapable of stopping the flow of
drugs out.

There are thought to be four different ways to distribute drugs.

The way most countries choose, letting criminals do it, is probably
the worst, both socially and economically. The three others are
allowing drugs to be sold in a licensed cafe or bar; making drugs
available in pharmacies, like over the counter cold medications; or,
finally, making drugs available only with a prescription.
Pragmatically a government should utilize all three, depending on the
drug. Let "soft drugs" such as marijuana be sold in licensed cafes,
allow "recreational chemicals" like ecstasy to be sold over the
counter and make highly addictive substances such as heroin available
only with a prescription.

Such action is perhaps the only way for a government to draw money
from the drug trade in order to offset its ill effects.

The best way of getting rid of criminals and their nefarious tactics
is to take away their business. Like cigarettes and alcohol, demand
for drugs does not drop much with excessive taxation.

Instead of being a drain on government coffers, drugs could provide a
huge inflow.

This would be more than enough to pay for any rehabilitation costs,
with plenty left over to increase social spending or to decrease taxes.

Not to mention all the other positive effects of being able to
regulate an industry with such a large potential downside.