Economic consequences of drug abuse in Sri Lanka

Abstract

Introduction

Drug abuse in Sri Lanka has been a critical issue for a long time. This study allows us to identify the severity of drug abuse problem and what are the economic and social pressures behind the drug abuse problem in Sri Lanka. By analyzing and gathering quantitative data, this study presents the first formal analysis of the economic consequences of drug abuse in Sri Lanka. Thereby policy makers can get a better understanding about the current situation and severity of the problem.

The consequences of drug abuse categorize under productivity loss, healthcare cost, crime related cost, cost of institutionalize, incarceration cost and welfare loss (Executive office of the President, ONDCP, 2004). Many of these costs have to be borne by the government and negative externalities are borne by the society as well. Various studies have identified that drug abuse creates economic loss to a country. According to the “Evaluation of Mexico’s drug trafficking”, illegal drug industry directly creates economic loss to Mexico (Rios, 2008). Estimated societal cost of drug abuse in the United States was $180.8 billion in 2002 (Executive office of the President, ONDCP, 2004). Each year government has to spend large sums of money to provide treatment facilities and make people aware about drug abuse in order to control this problem. As Sri Lanka is still a developing country, it is essential to estimate the economic cost of drug abuse, in order to identify the severity of this issue and the impact on the development of the country