The real hit behind our heroin habit
By John Fitzgerald
December 7, 2005
Singapore and Australia must see heroin as a global industry in which their economies are snared, writes John Fitzgerald.
Illustration: Spooner
IN DEFENDING their decision to execute convicted Australian drug trafficker Nguyen Tuong Van last Friday, the Singapore Government claimed the 396 grams of heroin he was carrying when arrested at Changi Airport three years ago was the equivalent of 26,000 "hits" on the street.
This dramatic statistic drew considerable media attention, but it is a figure very much open to debate. In fact, it is a minuscule amount in the context of the Australian heroin market, not to mention the burgeoning global heroin trade.
A figure of 26,000 doses represents just one day's supply for the illicit drug market in Melbourne, or the amount that would supply 45 dependent heroin users for one year. It certainly doesn't equate to 26,000 potential deaths, as the Singaporeans implied and some commentators asserted.
We can fall into the trap of focusing on the individual dimensions of the illegal drug market. We need to keep an eye on the bigger picture. Rather than seeing the opium drug market as an aberration of market economies, it is a central part of modern economies both in terms of direct capital flows and indirect investments in the political economies of transitional nations.
There is a systematic underestimation of the magnitude of the drug market and an overestimation of Australia's capacity both here and overseas to dull its influence.
The demand for injectable drugs in Victoria has never been greater, with syringe distribution in 2005 reaching the highest levels ever. Nevertheless, Australian Federal Police Commissioner Mick Keelty suggested recently on the ABC's Lateline program that the AFP contribution to the arrest of the Bali 9 would save 2000 lives.
This claim is misleading, to say the least. At the rate at which heroin and other opioid overdose is now occurring in Australia, it would take five to six years for 2000 lives to be saved. We doubt whether the Bali 9 could ever have supplied the entire Australian heroin market for such a period.
In 2004-2005, global opium production was equivalent to opium production in 2000, at the height of the heroin "glut" in Australia. While the Australian heroin shortage in 2001 produced dramatic effects, its direct causes remain the subject of considerable debate.
What is clear is that, like the drug users who managed to deal with the Australian heroin shortage by switching to substitutes, international illegal drug markets are adaptable, complex and larger than many national economies. We need to paint this bigger picture as it is now and how it has developed in relation to global capital markets.
Carl Trocki in his history of opium in South-East Asia clearly documented how opium markets driven by British concerns opened the doors for capitalism in Asia. The opium market created mass consumer markets, generated cash flows, rearranged class lines in producer countries, established viable trade routes and created new political-economic structures.
As Trocki wrote, opium functioned as a "keystone" commodity as it was the one element in a larger economic system "upon which the entire complex of relationships came to depend". The opium market did not rise out of disorder, rather it redefined social and political realities around the commodity relationships fundamental to market capitalism.
Similarly, recent crop-eradication initiatives have encountered the economic reality that opium is still a keystone commodity in Afghanistan and Burma. In some parts of Burma, reducing the amount of land available for opium production in 2005 has simply resulted in greater efficiencies, with production yields increasing by 19 per cent from 2004 levels.
It is difficult to track down the direct investment of drug markets into economies. However, it has been reported that in 1992, half the Peruvian labour force was employed in the informal sector sustained by drug-related capital. In Cali, Colombia, during the same period, the construction industry grew by 37 per cent, building luxury accommodation for the drug industry, according to the United National Drug Control Program. The International Narcotics Control Board estimated around 3 per cent of the combined rural population of Afghanistan and Colombia was engaged in illicit drug production at the end of the 1990s. Drug production was also estimated to directly generate up to 15 per cent of GDP in Afghanistan and Burma in the same period.
In Australia, it has been reported in the media and asserted in the courts that Crown Casino has been a site for laundering of large amounts of drug money.
The indirect contributions of drug markets to economies are also notable. In an environment where the Burmese junta has been shunned by the international community for its human rights abuses, and for its reliance on narco-dollars, Singapore investors have been major contributors to its infrastructure.
In addition, the Singapore Government, through its subsidiary SIA Engineering and Region Air, has had strong financial interest in Myanmar Airways International. As MIA is the only airline conducting international flights out of Burma, Singapore benefits indirectly from maintaining good relations with Burma and sustaining important infrastructure for this corrupt Government. Similar indirect relationships between sovereign governments and illicit drug trade also abound in central Asia and South America.
When Prime Minister John Howard said the lesson we should take from Nguyen's death was not to use drugs, he obscured the bigger picture.
We need to acknowledge that drug markets are insinuated through the very market economies that are meant to sustain us. If we are to reduce the harm of illegal drugs, our leaders must articulate the bigger picture and trust the community to understand and accept some difficult policy choices ahead.
Associate Professor John Fitzgerald is VicHealth senior research fellow at the Centre for Health and Society, Melbourne University. Associate Professor Paul Dietze of the Turning Point Alcohol and Drug Centre contributed to this article.
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