Life Style
Drugs, sex and alcohol could boost growth
Publish Date: Jun 08, 2014
Drugs, sex and alcohol could boost growth
A prostitute in waits for a client on a street corner. PHOTO/AFP/Getty Images
  • mail
  • img
newvision

PARIS - Europe's governments are turning their attention to prostitution, drugs and contraband as possible ways of boosting their economic growth profiles, as they struggle away from their debt crises.

Italy caused a stir when it announced last month that it would begin including revenues from drug trafficking and the sex trade, as well as contraband tobacco and alcohol, to calculate gross domestic product (GDP) from next year.

One effect would be to reduce the public deficit as a ratio of output, if EU authorities were to accept the idea. That would be a big help to countries trying to get their public deficits below the EU ceiling of 3.0 percent of output.

In 2012, Italy's central bank estimated the value of the criminal economy at 10.9 percent of GDP. Including these figures could therefore boost the country's growth to above the government's 1.3 percent estimate.

Last month, Britain said including illegal activities such as prostitution and drugs into national accounts would add about 10 billion pounds (12.3 billion euros, $16.8 billion) to GDP, equivalent to about one percent of national output.

Using the undeclared or so-called black economy to calculate national statistics is part of a range of changes recommended by the European Union's statistical institute, Eurostat, to be implemented in September.

Eurostat said including such data would allow a better comparison between countries with different laws.

"GDP is not an indicator of morality," said a spokesman, adding that only transactions carried out consensually would be included.

But others are less convinced.

Eric Vernier, researcher at the Institute of International Relations, said including "gross criminal product" in growth figures is a cynical attempt to combat the eurozone's debt crisis.

"The problem is to put this new statistical method on the table at the moment when everyone has budget problems," he said.

"There has been a general acceptance of this accounting approach since the crisis: what matters most is what goes into the state coffers."

'Denial of basic morality'

Many of Europe's struggling governments will welcome any boost to growth figures that will reassure both disillusioned voters and markets.

But the decision has sparked outrage among politicians and rights groups.


Many countries are putting in place tough measures to fight drug trafficking

The French minister for women's rights, Najat Vallaud-Belkacem, and Belgium's Interior Minister Joelle Milquet, have both written to the European Commission to express their "astonishment" over the proposals.

"Prostitution is not a voluntary commercial activity. To believe that it can have an ideological bias is a mirage and an insult to the millions of victims of sexual exploitation worldwide", they said.

"Prostitution cannot be assumed to be a transaction freely agreed between parties. The question also arises concerning drugs, especially hard drugs, considering the issue of addiction," added Ronan Mahieu, head of INSEE, which calculates France's GDP.

A spokeswoman for the Association for the Protection of Women's Rights in Britain said the group was "surprised and saddened" by the decision.

While in France, Marine Le Pen, the leader of the extreme-right National Front party which came top in recent European Parliament elections, described it as a "denial of basic morality".

'Shadow market'

Europe's black market is already huge, according to experts.

Friedrich Schneider, professor at the Johannes Kepler University of Linz in Austria, estimates that the European Union's "shadow market" is equal to 18.6 percent of the bloc's 2014 GDP.

But calculating the value of illegal activities is no easy task.

An EU document from 2012, littered with acronyms and complex mathematical formulas, gives guidelines on how to calculate the "inputs" of the prostitution industry, such as the cost of renting an apartment, or "transport and storage" for drug traffickers.

It even includes how to interpret the "ratio of purity" in narcotics.

Schneider argues that undeclared illegal activities and "value creating" services such as prostitution should be included in the calculations, but not totally criminal activities.

On this basis, Germany, Italy and France account for about half of Europe's black-market activities.

In recession-hit Greece, he estimates that black market transactions account for an estimated 23 percent of GDP, lower than the estimated 40 percent of the less-developed economies of Eastern Europe, but far higher than the roughly eight percent in Luxembourg.

AFP


Also related to this story

Kayihura names top drug suburbs

Drug traffickers to be sentenced to life

Gov't warns against drug trafficking and prostitution

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Nakyeyune gives hope to Uganda’s little people
Annet Nakyeyune Tibaleka had always dreamed of beautiful babies and a happy marriage. But her dream was shaken in 2002, when she realised that her firstborn child was a Little Person....
For years, I thought I was HIV+
He was stigmatised and rejected for over seven years as everyone thought he had HIV. Nonetheless, this situation drove Humphrey Nabimanya, 26, to become a youth peer educator and to start Reach a Hand Uganda....
Breaking Bad, Modern Family dominate Emmys
CULT TV drama series ''Breaking Bad'' and comedy hit ''Modern Family'' were the big winners at the annual Emmys, which paid moving tribute to late Hollywood icon Robin Williams...
The Bible verse that can actually change the world
My friend Jimmy is not an overtly very religious person, he does not always announce when he goes to church or what Jesus has done in his life. I’m sure he is a Christian, but he does not make much out of it, so I was surprised when a few weeks ago he posted a long Bible verse on his Facebook page...
Beyonce, Miley Cyrus dominate MTV VMAs
MILEY Cyrus won the award for Video of the Year for her hit single "Wrecking Ball," at Sunday''s 2014 MTV Video Music Awards outside Los Angeles...
Robin Williams suicide casts shadow over Emmys
THIS year''s ceremony will be overshadowed by the apparent August 11 suicide of Hollywood great Robin Williams that rocked the entertainment world...
Do you think the National Census positively contributes to improved Livelihood in Uganda?
Yes
No
Can't Say
follow us
subscribe to our news letter