Maverick's World

Why is the NCB making such large seizures?

This is in response to Mukunda's question on the earlier thread.

The liberalization of the economy in the 1990s has seen a growth in the wealth of Indians. Indians today have more disposable income and consumerism is rising in society. A large number of Indians today are young, and employed (unlike the past). Social mores are changing and the family value system entrenched in the joint family is eroding. The ultra compact nuclear family system creates more opportunity and encouragement for young people to leave the house and live independently. This is creating new social fora where ever increasing numbers of young people are interacting.

The rise in disposable incomes and the creation of new social fora are contributing to a rise in narcotics consumption in India. We are seeing a major rise in the consumption of cocaine, No. 4 grade heroin, and "party" drugs. There are few mechanisms in place to control the consumption of this drugs. There are few treatment options for health problems rising from this. There is a lack of awareness of the extent of the problem of abuse and of related health risks - eg. HIV infection etc... In short we are sitting on a major public health crisis.

This is the tip of the iceberg. Lurking below the surface is the possibilty of a crack cocaine epidemic among India's poor, a proliferation of narcotics suppliers, the high probability of the appearance of "kiddie" cocaine or heroin (formulations targetted at school children). There is also the problem of drug cocktails and other adulteration issues, in general there is no mechanism to ensure that the quality of the product is good.

Another problem which is easy to miss, is the issue of wealth recycling. When someone buys drugs from the local peddler, a large fraction of that money is remitted via Hawala channels to the drug suppliers abroad. The suppliers then usually launder the money and reinvest it elsewhere. This is a problem for the Indian economy because we are hemorraging wealth, money that could have been spent developing the Indian economy is leaving the country. A relatively simple sounding solution to this problem is to ensure that the money laundering chain leads back to investments in India, eg. get the drug lords to invest in real estate or the film industry 0r even to buy things made in India - like medicines. That way the capital lost from drug purchases is re-channeled back into the Indian economy. It is extremely bad if the money going out of the country is used to make trouble eg. fund terrorist groups, or separatist movements. I call this kind of flow of money, a wealth loop. In my opinion, the wealth loops have to be kept "balanced", whatever goes out of the economy has to be brought back in.

In order to achieve a semblance of sanity in the functioning of this trade, one has to create the conditions that permit an extremely effective regime of price control. Price control over narcotics can be achieved most effectively by ensuring that local supply of the drug is constant. This can usually be implemented by limiting the number of trafficers and ensuring that no major shipments of size suddenly appear or disappear from the market (i.e. no major cartels make sudden moves to seize the market. Keep speculators out!). Remember that if the price of the drug becomes too high, then you will end up encouraging poor addicts to commit crimes in order to purchase drugs. Alternatively if the price becomes too low, then the number of addicts will rise sharply and that will destroy social order and economic growth. So the price has to be not-too-high and not-too-low.

This regime of control has to be aggressively kept in place until awareness and public health systems reach a level of preparedness necessary to stamp out addiction and minimize other health risks. Once this state is reached, it is possible to imagine a land where recreational use can be tolerated. However given the complex demographics of India, this means we have to have control measures in place for the foreseeable future.

In practice this is all terribly complicated, but at the superficial level - simply put - you have to keep large quantities of drugs from entering the Indian market through unknown players. You can't allow a vast quantity of drugs to become suddenly available to Indian drug users without putting into place mechanisms to slowing reduce the addiction problem. This is am unspoken, unwritten yet non-negotiable element of our national security policy irrespective of who is in power. No political party can allow this aspect to go unmanaged - the sums of money changing hands are simply too large.

What we are seeing today is similar to the 80s when there was a rise in drug consumption due to an American and Pakistani backed spurt in heroin production in Afghania, and with a lot of blood toil and tears the after effects of that mess were brought under control. So expect more of the same.

And as long as we have to keep tweaking this trade, terrorism as a phenomenon will remain.

posted by maverick @ 3:31 PM