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>> The Financial Times


The Financial Times - August 5, 2013

by John Paul Rathbone

Uruguay’s Congress last week took a big step in becoming the first country in the world to legalise the cultivation, sale and possession of cannabis. Last November, the US states of Washington and Colorado passed similar laws. The measures are a sign of how the monolith of drug policy, which is based on prohibition, is being re-examined and changed. They are potential markers of a brave new world. Given how drugs touch so many peoples’ lives, it will also be a scary one for many.

Nonetheless, for some years now, it is clear that drugs have been winning the “War on Drugs”. In leading consuming countries, such as the US, prohibition has had some success. But the cost has been huge.

The US spends some $50bn a year on anti-drug efforts. Cocaine use has fallen by some 40 per cent since 2006. But cocaine has been substituted, somewhat, by rising synthetic drugs and prescription pill abuse. The US also arrests and imprisons more people than anywhere else in the world – on a per capita basis, five times as many as the UK or China. Remarkably, in 2009 half of all federal US prisoners and a fifth of all state prisoners were incarcerated on drugs charges.

Indeed, that is one reason why there has been a growing tolerance towards legalising cannabis in the US. No longer viewed as a “gateway drug” to vicious addiction, many parents are now more concerned about their children getting a police record than about them smoking pot.

Supply countries face different challenges. In Latin America, the largest is appalling violence. Some 70,000 people have died since Mexico launched an all out assault of international drug traffickers seven years ago. Honduras now suffers homicide rates normally seen in war zones. Even where drug cartels have been brought to heel, as in Colombia, this has done little to curb drug exports. Smuggling routes simply moved elsewhere.

Despite this patchy record, questioning prohibition policies remained taboo. But this attitude is changing fast. Only last April Juan Manuel Santos, the Colombian president and a close US ally, commissioned the Organisation of American States to re-examine drug policy in a hemisphere which accounts for about half of global cocaine and heroin consumption, and a quarter of cannabis use.

As a result, the OAS this year became the first multilateral organisation to endorse examining new approaches – including the legalisation of cannabis. And in 2016, the UN will hold a special general assembly on the subject. The biggest opponents to reform will likely be neither the US nor Europe, which have largely dropped “Drugs War” rhetoric, but emerging economies such as China and Russia. It promises to be a lively meeting.

Meantime, it is right to explore different approaches to a big problem which is also a very big business: the UN estimates the global retail value of illegal drugs is some $330bn a year, of which cannabis accounts for almost half. This is the value of the Uruguay, Colorado and Washington experiments. These seek not to promote drug consumption, but to regulate it.

It is important not to overstate the potential benefits. For example, legalising cannabis will sap criminal revenues. But it will not eliminate them. Mexico’s drug cartels, for example, derive only a third of their revenues from cannabis. The rest is from other illegal drugs, extortion and kidnapping.

Nor will legalisation, of itself, improve security in Latin America – how can it when police forces are often weak, judiciaries corrupt, and levels of impunity so high? It will not empty US prisons. Nor will legalisation necessarily raise much tax revenue to be ploughed into addiction treatment. That is because to compete with illegal markets, regulated drugs have to offer good quality at competitive prices. Setting sales taxes high works against that.

In short, legalisation is no panacea. It forms only one part of any new approach. Still, that drug policy is being examined and, as a result, might become more rational is a significant advance. All public policies, after all, should be held up to scrutiny. That is especially so on those based on the notions that they can control a lucrative commodity, and eradicate a basic behaviour. For some reason, human beings always and everywhere like to get dizzy.

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