DRUG BUSINESS AND THE FUTURE OF RUSSIA


1. Deathly Hasard for Democracy

Drug addiction is swiftly spreading throughout Russia at a dazzling speed of a forest fire fanned up by a gale. Three years ago experts estimated the number of addicts in Russia at under a million. Now they assert that three million people, young people primarily, are addicted to drugs. This is a veritable epidemic whose medical implications are well-known though the economic and political implications are still largely ignored by the society. Though the amounts paid by an individual addict for a dose of heroin or a "shot" of amphetamine or some other drug seem insignificant by it self the sum total of them generates the aggregate annual profit of five - six billion dollars. The drug addicts levy a "negative tax" on the public which is much greater than the sum total of all legal personal taxes collected in the country. The addicts cannot keep the collected money for long as they immediately pass it to the drug dealers.

In Russia drugs are distributed almost openly. The billions at the disposal of the drug traders easily buy them immunity from any legal persecution. The experts who are analysing the state of the drug trade in Russia state that a large number of police officers and other government officials at various levels regularly receive a "cut" of the drug profits, that is, act as hired agents of drug traders. The stated strategy of the government agencies, which is to suppress the drug trade, is implemented extremely ineffectively. The repressive effort is directed primarily against the individuals, who buy and keep drugs "without the intent to sell", that is, against the drug consumers. Even the small-scale drug pushers are very rarely taken to court while the wholesale drug traders are practically never brought to justice. As for the major operators of the illicit drug market, they are entirely hidden from the public view. Perhaps, even the law-and-order agencies have no information about them. The occasional media reports on capture of large drug shipments and the men carrying them never mention the real owners of the "goods", the managers arranging the transportation, and the ultimate recipients of the drugs.

As we are well aware of the overall scope of the Russian drug market we can confidently say that the men who control it are significantly more powerful than the men who control the legal markets, for instance, the markets of oil, gas, or aluminium (unless they are the same people). There is no longer a real need for making any special effort to "launder" dirty money in Russia under the prevailing conditions of widespread corruption and shadow economic relations. There is no urgent need for legalising ill-gotten capital as it can be directly employed for acquiring factories, oil companies, mineral deposits and, what is most significant (and most alarming for us), for buying influence with the legislative bodies and executive governmental agencies, with the regional administration officials, with the men running the national economy, with the commanders of the armed forces, and so on. Ultimately, it is possible to buy out all the levers controlling the destiny of the entire nation.

Russia is threatened with a take-over by the drug Mafia. Of course, the concept of a unified criminal organisation controlling the entire drug market is rather arbitrary and it does not fully reflect the reality. But the problem is not made easier for us just by the fact that there exists no single integrated Mafia but rather five or six organised crime groups which control not only the drug market but also other legal and illicit markets. What is really highly significant is that if the drug abuse in Russia keeps on expanding at the current rate in the next five - seven years the number of heavy drug addicts will be over ten million and the annual drug trade income will be comparable to the entire government budget. Under such circumstances it is not improbable that the seemingly fantastic scenario can be realised under which the state power (including the armed forces and the law-enforcement agencies) will fall under the domination of the forces controlling the drug market. A probable political disposition of such forces is a matter for political scientists or experts on world geopolitics to deliberate on.

In the context of the present discussion it is not really important what will be the nature of the parties who will make use of the results of the narcotisation of the nation (or who will provoke it). In any case, there may be no doubts that the political scene will be dominated by the criminal world though its control may be (and in future will necessarily be!) camouflaged with some popular rhetoric (perhaps even spiced with tough anti-drug language). In a country with ten million drug addicts any deranged dictator supported by the drug business will certainly be a political success. In short, if the drug abuse and the drug trade continue to expand in Russia at the current rate in the next few years the aspiration to build up the country as a prosperous democratic nation should be left behind for long if not for ever.

2. Crisis of Public Cousciousness

All the above facts and arguments are well-known to the politicians, researchers, and the officers of the law-enforcement agencies. The only thing nobody knows is what should be done to save the nation from a looming catastrophe. Participants at various (though rather rare) conferences and consultations are putting forward more or less constructive recommendations that can be classified into the following three categories. The first is to intensify the punishments (even to introduce death penalty); the second is to hire more personnel for the law-enforcement agencies and to establish special units for combating corruption, in particular, drug-trade funded corruption; and the third is to boost greatly the overall government spending for all anti-drug programmes, especially, to enhance the anti-drug publicity. All such suggestions seem to be quite reasonable. The discussions at the same conferences and consultations reveal, however, that no one of them can be sufficiently effective and many cannot be implemented in principle.

Indeed, if we intensify the punishments the results will be effective only if it is primarily the key figures in the general drug trade organisation who are punished and cannot evade punishment. Currently even a mid-level drug trader, charged and brought to court, can easily escape a prison sentence just by paying bribes to relevant officials. Of course, he will evade even a death sentence just by spending more money for bribes (spending more money is no problem for him). The only tangible result of any intensification of the repression regime will be that the corrupt policemen and judges will have a higher "income" than now. That "income" increase will not so great, however, because the police will hardly catch many more drug traders than now or make any extra effort to do that. Sceptics remind us that it is much simpler to rewrite the laws than to reform an unwieldy law-enforcement apparatus. First, the government has no extra funds for establishing new special police units and hiring more police officers. Secondly, in the unlikely event that the government finds enough money for setting a special police unit there is absolutely no assurance that soon the drug traders do not subvert the key (or practically all) personnel in this unit. Even now the drug traders are spending between two and three billion dollars a year for bribing government officials throughout the country. This amount is significantly greater than the sum total of all salaries paid to the personnel of the law-enforcement agencies by the government. Money for anti-drug propaganda is, of course, a lowest-priority item on the long list of government-spending requests.

3. Conventional Anti-drug Measures are Ineffective in Russia

One cannot accuse the people who put forward hard-nosed proposals for forceful actions that they are incompetent. All such suggestions are essentially repeating the anti-drug measures taken in many countries all over the world. Similar policies were implemented in the USA in the recent years. The rate of growth of the number of drug addicts and the demand for drugs seem to have decreased somewhat in these years in the USA. There was even no need to introduce death penalty for heavy offenders. There are special reasons for the efficacy of that policy. First, the US police officers enjoy adequate earnings, high social status and public prestige and therefore are generally not susceptible to corruption. Secondly, the enhancement of the repressive activities in the USA was backed by an intensified and efficient public campaign against drug abuse.

It should be noted that in the recent years the funds allocated annually by the US government for the anti-drug campaign were significantly greater than the aggregate annual amount allocated by the Russian government for health, education, and science. There is another important factor which is highly effective in the USA and non-existent in Russia. The private charity organisations in the USA are allocating financing comparable to the government funds for running anti-drug programs and the amounts spent for treatment and prevention of drug addiction and for research in the field are of the same order of magnitude as the funding of the anti-drug repressive activities.

In short, what works well in the USA can hardly be repeated in Russia, in fact, it is hardly necessary. Russia cannot afford spending billions of dollars fighting the drug business and it does not possess a reliable law-enforcement system. This is why Russia must look into other options for tackling the problem. There are, indeed, viable options to be seriously considered. Experts typically consider the drug business only in the legal context as a criminal phenomenon. Without ignoring this essential aspect we can also analyse the illicit drug trade in a different context, for instance, as a purely economic process. If such analysis demonstrates that the state cannot suppress the drug market with administrative and legal instruments the only remaining solution is to establish an economic control over this market.

The economic knowledge suggests that the stronger the repressive actions are the higher the profit margin and the more money the illicit market operators can invest into innovations in their industry which will neutralise the intensified prohibitions. (Incidentally, it is the knowledge of that paradoxical effect that prompts some experts to question even the current US anti-drug progress which, they say, is only temporary and therefore excessively costly.)

4. The only Remedy is to Remove the Prohibition

From the viewpoint of the economic theory the simplest way to put an end to the drug business is to remove the prohibitions from the drug market. The drugs will then acquire the status of, say, tobacco or alcohol products. The product prices and the traders' profits will plummet accordingly. The number of drug addicts is not expected to diminish immediately after legalisation of drugs but the public losses will be lowered considerably and the power of the drug Mafia will be severely undercut. Various approaches to legalisation of drugs have been discussed in the West for several decades already. The proposal has not been really implemented anywhere (with the exception of half-hearted hesitant and therefore ineffective programmes in the Netherlands). No reliable assessments have been made about possible consequences of drug legalisation. Therefore, the Western governments choose not to get involved in controversial experiments while they feel that they are still capable of confronting the onslaught of the drug business with the conventional repressive measures.

In contrast, nobody dares, or is prepared, to discuss drug legalisation under any circumstances in Russia even though the repressive measures are, and will apparently continue to be, utterly ineffective. One reason for that attitude is that most Russians instinctively favour the moral and repressive paradigms when confronting social problems. Another reason is that the drug legalisation regime as it is understood in the West is entirely inappropriate under the Russian conditions. The proponents of Western liberalisation in Russia understand the drug legalisation as opening up a free competitive drug market. We have experienced (and are still suffering from) the results of such hasty liberalisation of the alcohol market in Russia in the early nineties which resulted in sales of huge amounts of illicitly produced alcohol and circulation of billions of roubles of the "black cash".

On the other hand, it is precisely the recent Russian experience with various prohibitions and restrictions in the alcohol market (including the massively counterproductive "anti-alcohol" campaign of the late eighties) that prompts us not to reject outright the concept of drug legalisation. It is now generally agreed that the most effective policy in the alcohol market is to establish a rigorous governmental regulation, rather than prohibitions. Perhaps, a similar approach will prove to be effective in the drug market?

The only option is, indeed, left for the Russian state to avoid the full domination of the drug business - the state must abolish prohibitions in the drug market but take the market under a comprehensive governmental control so that the government become the absolute administrator of the market. Such a policy will not be equivalent to a legalisation of the drug trade as it is understood by the Western liberals. We suggest merely to lift the prohibition to buy and consume the drugs. The state must retain the monopoly for producing and selling this deadly "commodity".

Obviously, this proposal will be immediately met with a rising wave of infuriated moral indignation against the plans for the state to supply the drugs directly to the gullible young generations (at prices much lower than the current black market prices). We are fully aware of the tragic fate of those who are inexorably drawn into the abyss of drug addiction.. Yet we must frankly and courageously tell their families that drug legalisation and the tight state control are our only hopes for saving children and teenagers who are at risk of becoming addicted.

The major, if not the only, driving force behind the ongoing narcotisation of Russia is the economic interest of the illicit drug business. The drug dealers carefully nurture new generations of drug addicts - they not only provide them their first drug does for free but also they promote drug-use fashions and attitudes in the youth culture. The growth of the drug addiction rate can be significantly curtailed if not stopped outright if the aggressive marketing techniques of the drug traders can be invalidated. In addition, removal of the illicit traders from the drug market can generate additional massive revenues for the state budget. These funds will be highly useful for expanding the treatment and prevention facilities, for conducting the persuasive anti-drug propaganda, and, ultimately, for intensifying the repressive activities against the illicit drug traders who will, of course, fight to the last for preservation of their enormous profits. It should be admitted that in partnership with corrupt government officials they will be rather successful in their fight for some time especially as some of those corrupt officials will oversee implementation of the drug-market regulation measures.

It should be emphasised once again, however, that we are proposing not just legalisation of drugs but a comprehensive programme of actions including the following major steps:
* sanctioning of the rights to buy and consume any drugs (including heroin, cocaine, etc.);
* establishing a state monopoly for the production and sales of narcotic substances;
* introducing the most severe punishments for the offenders involved in the illicit drug trade;
* steady strengthening and expanding the law-enforcement agencies fighting against the illicit drug trade;
* comprehensively intensifying the anti-drug propaganda with an extensive involvement of non-governmental organisations;
* setting up and operating a wide network of treatment and rehabilitation medical centres for drug addicts;
* expanding research programmes for development of various medicines and other medical tools for combating drug addiction;
* running research projects aimed at identifying the social roots and effects of drug addiction.

The state monopoly over the drug market will generate the revenues required to finance the implementation of such a programme. It should be emphasised once again that the programme must be wholly integrated and each step in it can be effectively accomplished only if all other steps are being implemented. Obviously, at the current stage we can only outline a set of measures that would constitute such a comprehensive programme for fighting the drug addiction and drug trade in Russia. Even at the preliminary stage we can foresee the significant difficulties that will be encountered in the implementation of the programme (and there will be many more of them than we can identify at present). Even though the task is extremely complicated now is the time for experts to draft such a programme as soon as possible and present the draft for an extensive public appraisal.


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Lev Timofeev, Head of the Center of the Research on Illegal Economic Activity (Russian State University for Humanities).

This paper is a concluding section of Lev Timofeev's book "The Initial Theory of the Illicit Drug Industry" (published in Russian, 2002).
See: http://corruption.rsuh.ru;