BELGIUM: Cross Border Illegal Drugs in the Balance of Payments
Introduction
International merchandise trade statistics are the main data source of the Belgian BOP goods account. As these do not include drugs, estimations were necessary to improve coverage. These are added to “general merchandise on a balance of payments basis”. In 2017, drugs accounted for 0,06% of total goods imports and 0,26% of total goods exports.
Scope, Methodology, Compilation Practices, and Data Sources
Estimates concerning drugs in Belgium are compiled per type of drug based on a limited range of data available and various assumptions. A distinction is made between the following drug categories: cannabis, ecstasy (XTC), amphetamines, cocaine and heroin. The approach used is demand-based; comparison between supply and demand is made insofar as this is possible.
The available information comes mainly from the European Monitoring Centre for Drugs and Drug Addiction, various charities, the federal police and the Belgian National Report on Drugs (BNRD), a national-level report compiled by the Public Health Institute (Institut scientifique de santé publique).
For Belgium, there is information on the cannabis and XTC users, in the form of a monthly prevalence of drug use, and several sources of information on the prices of the different types of drugs. Then again, there are no data available concerning the number of drug users, the quantity of drugs used per drug taking session and the frequency of these sessions per person and per year. Missing parameters are therefore estimated based on information from abroad, or hypotheses.
Household final consumption expenditure (P.31 S.14) on drugs is calculated using a “price times quantity” method, whereby the street price is estimated based on the range of prices reported in the annual study by the Institut scientifique de santé publique, supplemented and verified with the help of several other sources. As for the quantity consumed, an estimate has been made for the number of users and the average consumption per type of drug.
The number of consumers is deduced from demographic statistics and from an estimated prevalence. Potential drug users are found among the population aged between 15 and 65. This finding is multiplied by a prevalence rate per type of drug, which varies each year in line with the data extracted from the BNRD. This prevalence takes account of both occasional users and regular users. The exception is heroin, for which there is no information on prevalence. An estimate of a hard core of users has been made for this type of drug, producing a figure of 5 000 consumers.
Next, an estimate of average consumption per user needs to be made. The following assumptions, in line with the scientific reports and other information, were used. For cannabis, an average consumption of 250 g per consumer per year is taken into account, the average consumption of XTC is estimated at 104 pills per user per year and that for amphetamines is put at 208 grams per consumer per year. For cocaine, a distinction has been made between occasional users and drug addicts, as the former consume 1 g roughly 40 times a year, while drug addicts, which account for 5 000 consumers, use 0.5 g per drug-taking session on a daily basis. And, finally, the average consumption of heroin per user is thought to be 135 g per year.
Output (P.1) of drugs is assumed to be nil for cocaine and heroin. An estimate in value terms has been made in the case of cannabis. For XTC as well as amphetamines, an estimate has been made based on the price multiplied by the quantity produced. For all categories, profit margins have been estimated on imports and production when output is not nil, based on the difference between the street price and the import price as well as between the street price and the production price.
Regarding intermediate consumption (P.2) of drug traffickers and producers, there is very little information at hand. Since output of heroin and cocaine is nil, it is assumed that for these types of drugs intermediate consumption is also nil. For XTC, there is an estimate of the unit production cost that has fluctuated over the years between € 0.25 and € 0.40 per pill. Finally, for cannabis and amphetamines, an estimate is made on the basis of output, i.e. respectively 40 % and 4 % of P.1. In the case of cannabis, this method is the same as the Dutch method and, for amphetamines; the proportion is taken from the estimate used in the case of XTC.
A limited compensation of employees (D.1) is also estimated for people employed in XTC laboratories. An average wage figure is multiplied by the estimated number of employees. The average conventional wage level is used as there is no specific information available.
As for imports (P.7) of cannabis, an estimate of net imports is used to avoid any transit-related effects. Imports of the other types of drugs are estimated using the "price-times-quantity" method, where the price always varies in relation to the street price and where the quantity is estimated depending on the volume consumed and possibly the quantity produced, if any.
The last aggregate that needs to be estimated is exports (P.6) of drugs. Exports are assumed to be non-existent in the case of cannabis (estimate of net imports), amphetamines, cocaine and heroin. As far as XTC is concerned, a "price-times-quantity" method has been developed.
Linkages Across Statistical Domains
Estimates are introduced in a harmonized way in both balance of payment and national accounts.
Current Challenges and Conclusions
Challenges in estimating the illegal economy are mostly due to the lack of source data and the need to set hypotheses.
Annexes
A detailed description of the methodology used can be found here.