Will the Global Slowdown Reduce Cocaine Demand?
November 3, 2008 - worldpoliticsreview.com
BOGOTÁ, Colombia -- "What America needs now is a drink," Franklin Roosevelt famously declared upon repealing Prohibition in 1933, amidst a bleak economic climate. But according to the U.N.'s top anti-drug official, consumers of prohibited substances -- particularly cocaine -- might not have the same reaction to today's comparable economic turmoil.
"There is no doubt the [economic] crisis will have an impact [on the drug trade]," Antonio María Costa, the director of the U.N. Office on Drugs and Crime, told Reuters last week. "It may turn cocaine into a much less desirable discretionary income expenditure."
Costa was referring to European markets, where the estimated number of cocaine users rose from 3.5 million to 4.5 million between 2006 and 2007. He argued that depreciating European currencies would reduce the affortability of such illegal imports, reversing the recent consumption growth.
Analysts, though, have cast doubt on whether such a link between macroeconomic trends and cocaine use exist in the U.S. -- or further afield. "1980, 1981 and 1982 were boom years for cocaine [in the U.S.], even though it was deepest recession we had since the Great Depression," says Adam Isacson of the Center for International Policy. "(A recession) will turn pure powder cocaine into something less desirable because fewer people can afford that, but economic adversity is the reason that cheaper cocaine derivatives exist. . . . The drug traffickers are, unfortunately, pretty brilliant marketers who are able to adjust to these kinds of things."
Colombian Vice President Francisco Santos' recent remarks targeting wealthy cocaine users -- in particular, supermodel Kate Moss -- may actually be misleading. "In the U.S., cocaine consumption is primarily concentrated amongst low-income people and they are heavily dependent on crime," says Professor Peter Reuter of the University of Maryland. "If you ask what is the effect of a recession, [the answer is] probably not a lot because their employment rates are low anyway and the availability of criminal targets isn't going to change too much for them to reduce their income."
In European countries, figures of those seeking treatment also suggest that most cocaine users are from poorer social groups.
The economic slow-down may instead have a greater impact on government drug control budgets, especially since, in the United States, the war on drugs has lost its prominent role on the political agenda. Colombia was mentioned in the final presidential debate in October, but in the context of a stalled Free Trade Agreement rather than that of Plan Colombia.
Opinions differ on the potential impact of a funding cut. Isacson, a staunch critic of U.S. drug policy, said that funding cuts could be made without necessarily encouraging increased consumption. "If you were cutting the fumigation program in Colombia, for instance, I don't think it would have much impact on drug supply or usage of cocaine. What would really hurt would be cutting the treatment budget [in the United States], which has already been pretty flat under the Bush administration. Dollar for dollar, that seems to be what reduces demand the most."
In contrast, Professor Reuter suggests that even reduced treatment budgets may not dramatically increase consumption, as the percentage of U.S. cocaine users accessing treatment is already low.
If Costa's comments seem like an attempt to boost morale through cheerleading, there's good reason. Although drug use has stagnated in the United States, a recent Zogby/Inter-American Dialogue Foundation poll found that three-quarters of likely voters feel the war on drugs is failing. On the production side, the area of the Andes dedicated to coca growing increased by 16 percent last year, according to U.N. figures. Colombia, which is responsible for most coca production, has seen an emergence of new armed groups financed by the drug trade, filling the vacuum left by demobilized paramilitaries. And the impact of the cocaine trade has now spread beyond the coca-producing states to Venezuela and Brazil, and beyond South America to Mexico (see Marcelo Ballvé's WPR briefing) and West Africa (See Joe Kirschke's WPR series, The Coke Coast).
The White House Office of National Drug Control Policy did not respond to enquiries regarding how the anticipated recession might impact cocaine use. But if Costa is correct, it could be one of the few silver linings to the financial clouds spreading off into the distance.
Henry Mance is a freelance journalist based in Bogotá. He holds an M.Phil. in Development Studies from Oxford University.
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