The influence of globalisation (EU Drug Markets Report)

The influence of globalisation

Globalisation and the growing use of the internet are factors that have had a big impact on illicit drug markets and their wider ramifications. Globalisation simultaneously facilitates drug supply, by generally improving its efficiency and multiplying opportunities, while hampering drug supply reduction activities, by making it more difficult to stop larger and more numerous drug flows. In fact, it is probably the most challenging development faced by international drug control at present. Globalisation has created efficiency gains in trafficking activities. Lower transport, communication and information costs have increased the efficiency of illicit business operations. In addition, by opening up borders, globalisation has also made it possible to easily transfer scientific and technological know-how which can be exploited by illicit, as well as legitimate, businesses. If not offset by improved supply containment policies, the reduced costs of bridging the gap between suppliers and producers of illicit products may lead to lower retail prices if passed onto consumers, with the potential for stimulating consumption. Alternatively, or in addition, globalisation increases the potential profits for producers, which might increase production (Costa Storti and De Grauwe, 2009).

One of the main ways in which globalisation impacts on European drug markets is by increasing the diversity and intensity of flows of people and goods in and out of Europe. Many of the plant-based drugs and precursor chemicals supplied to European markets are produced outside Europe and must be smuggled into the region, while some drugs and precursor chemicals are produced in the EU and supplied to other regions of the world. Each passenger, car, bus, lorry, aircraft, sea vessel and container entering or leaving the region (to say nothing of intra-European traffic) is effectively an opportunity to smuggle illicit goods, so the spectacular growth in global transport, trade and logistics over the past 25 years has multiplied such opportunities. The boom in container traffic entering and leaving Rotterdam by sea in the last 25 years or so is a telling example. The port of Rotterdam receives 30 000 sea vessels and 110 000 inland vessels every year and is Europe’s largest, and the world’s eighth largest, container port. Container traffic in Rotterdam increased threefold between 1990 and 2014, when 7.4 million containers went through the port (see Figure 2.1), on average a little more than 20 000 containers a day. During the same period the net weight of load transported by the containers processed through the port increased fourfold, to reach 127.6 million tonnes in 2014, or roughly 350 000 tonnes a day (11). This spectacular increase goes a long way to explaining why increasing numbers of middling to large consignments of heroin and cocaine intended for distribution within Europe are seized from containers in the port of Rotterdam every year. Indeed, it takes about 3 minutes for traffickers to illegally open a container and retrieve a consignment of, for example, 100 kg of cocaine distributed in four or five duffel bags. Container traffic in almost all other large European ports, such as Hamburg, Antwerp, Algeciras, Felixstowe, Piraeus, Gioia Tauro and Le Havre, to name just a few of those processing thousands of containers a year, is also growing.

FIGURE 2.1

Container traffic in the port of Rotterdam, 1990–2014

Source: Port of Rotterdam (https://www.portofrotterdam.com/en/file/1134/ download?token=T2mtJxpJ) 

Air passenger traffic has also increased in most major European airports and, owing to the development of low-cost air connections, in many smaller, regional airports as well. Thus, for instance, the number of passengers using Spanish airports increased from about 166 million in 2004 to about 196 million in 2014 (Aena, 2004, 2014). Land connections are also growing. Thus, for instance, lorry traffic at Kapitan Andreevo, a key border crossing point between Bulgaria and Turkey (Greece is also quite close), was already increasing even before Bulgaria joined the EU, from about 193 000 lorries in 2001 to more than 300 000 in 2003 (CSD, 2004).

Another perspective on globalisation’s impact on drug markets can be obtained by looking at changes in the chemical industry in the last 20 years or so. The precursors used in the manufacture of most traditional illicit drugs are generally produced legally by legitimate firms and then diverted to illicit ends, while new psychoactive substances and their precursors are predominantly made in Asia, particularly China and to a lesser extent India. Four main recent trends have made it simultaneously easier for drug market actors to source chemicals and more complicated for authorities to tackle them. Firstly, the global chemical industry has experienced unprecedented expansion and growth during the last 20 years and continues to grow. Chemicals are now manufactured in most countries of the world and global output of the chemicals industry almost doubled between 1990 and 2010, meaning that it grew faster than global GDP. Secondly, international trade in chemicals has grown even more strongly than their manufacturing, with exports of chemicals increasing 3.5-fold between 1990 and 2012. Thirdly, a significant proportion of international trade in chemicals is made up of re-exports, highlighting the increasing role played by brokers and other intermediaries. In practice, this means that more chemicals are traded between more countries through more intermediaries than ever before, seriously complicating the task of those in charge of targeting illicit shipments. Finally, Asia has become the largest chemical manufacturing region in the world, supplying 44 % of global output in 2010, with China alone supplying 27 % of global output. And a key characteristic of the Asian chemical sector, including China and India, is that it is made up of a large number of comparatively small companies, as opposed to a limited number of large firms. This makes the implementation of in-country controls more difficult because of the large number of sources of chemicals and potential opportunities for diversion (UNODC, 2014b). 

Finally, at a general level, demographic shifts worldwide, such as rapid population growth and urbanisation in Africa and Asia, alongside economic developments, will have major implications for global drug markets and will impact on Europe’s role in the world drug scene. Implications are difficult to predict, in part because, except in a few western countries, drug monitoring systems are poorly developed or non-existent. Nevertheless, it seems clear that socio-economic development is leading to the emergence of large drug markets in eastern Europe (Russia), the Middle East (e.g. Turkey, Iran), Africa (e.g. Kenya, Nigeria, South Africa), the Americas (Brazil, Mexico, etc.) and Asia (China, India, etc.). This suggests that in future Europe is likely to be even more of a transit point for drug flows starting and ending elsewhere. Early-warning signs are already discernible, for example in the transit through European airports of drug couriers (some of whom are nationals of the EU) carrying methamphetamine made in West Africa or Iran and destined for Japan or the Philippines. Globalisation also makes it probable that more drugs will be produced in Europe for export on foreign markets, as is already the case with MDMA, and that more European criminal organisations will become significant players outside Europe.

Short title: 
Globalisation