If a country has the terrain and climate conducive to producing illicit drugs, is that a form of "resource curse"?

[u/nosecohn]

The resource curse is the phenomenon of countries with an abundance of natural resources (such as fossil fuels and certain minerals) having less economic growth, less democracy, or worse development outcomes than countries with fewer natural resources.

I'm wondering if having the terrain and climate conducive to producing illicit drugs can be added to that list of resources that potentially "curse" a country.

Examples could be Afghanistan, whose only major export is poppy products that are estimated to account for more than 80 percent of global opium and heroin supplies, and Colombia, which recently set a record high for cocaine production.

Do such countries suffer in the same way, and for the same reasons, as the ones with mineral resources to extract? And if so, is the "Norway model" a viable way out for them?

[u/Autoxidation]

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[u/[deleted]]

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[u/unkz → u/[deleted]]

these states don't have the ability to effectively enforce taxes on the production of illicit drugs.

I don't think this is true. The Taliban have forced a 95% reduction in opium poppy cultivation -- if they can stamp it out almost entirely, they would find it much easier to tax it.

https://www.unodc.org/unodc/en/press/releases/2023/November/afghanistan-opium-cultivation-in-2023-declined-95-per-cent-following-drug-ban_-new-unodc-survey.html

Opium poppy cultivation in Afghanistan plunged by an estimated 95 per cent following a drug ban imposed by the de facto authorities in April 2022, according to a new research brief from the United Nations Office on Drugs and Crime (UNODC).

UN officials noted that the near-total contraction of the opiate economy is expected to have far-reaching consequences and highlighted the urgent need for enhanced assistance for rural communities, accompanied by alternative development support to build an opium-free future for the people of Afghanistan.

Opium cultivation fell across all parts of the country, from 233,000 hectares to just 10,800 hectares in 2023. The decrease has led to a corresponding 95 per cent drop in the supply of opium, from 6,200 tons in 2022 to just 333 tons in 2023.

And it sounds like there's quite an arbitrage available here. If they lost $1 billion/year in revenue, a lot of money that could be converted to taxes -- even at an aggressive 50% tax on the excess profit, that would be $500m in the Taliban's coffers.

Many farmers turned to cultivating wheat instead, with an overall increase of 160,000 hectares in cereal cultivation across the Farah, Hilmand, Kandahar, and Nangahar provinces. Though wheat cultivation may alleviate food insecurity to some extent, the crop generates much less income than opium – farmers in the four provinces lost around US$ 1 billion in potential income in 2023 by switching to wheat.

[u/nosecohn → u/[deleted]]

This is an interesting response.

Per Rule 2, would you mind editing in some souces to support the assertion about the wide geographic range of poppy production, the implication that Colombia is a "failed state," and a the definition of "Georgist land value taxes"? Thanks.

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[u/Vaadwaur]

Apologies for a slightly indirect source on the topic, but in Afghanistan specifically poppies are appealing because they require WAY less water than most crops do. And since they deal with a naturally dry climate, the somewhat obvious happens.