The share of drug trafficking in Kazakhstan’s GDP: methods for evaluation

Abstract

Introduction. In Kazakhstan, no systematic work is carried out to collect data and evaluate illicit activities in the form in which it could be compared with the main macroeconomic indicators. The purpose of the article, therefore, is to examines methods for evaluation of the share of drug trafficking in Kazakhstan's GDP and GRP. The methodology used in the research is based on the principles of the System of National Accounts. Results. Based on international experience and practice of applying the evaluation of illicit activities according to the recommendations of Eurostat, the authors carry out an estimation of the share of illicit traffic in narcotic drugs in the economy of Kazakhstan in 2011-2016 as a whole and by regions. The most common drugs in Kazakhstan are heroin, cannabinoids (marijuana, hashish) and opiates. Thus, the analysis and evaluation were carried out for these types of drugs. Base at the proposed formulas, the calculations were made to evaluate the use of each drug in Kazakhstan, the volume of imports and domestic production, trade margins and gross value added (GVA) by activities related to its spread. Conclusion. The calculations make it possible to estimate the real volumes of drug trafficking in Kazakhstan's GRP and GDP. The evaluation of the share of illicit drug trafficking in Kazakhstan's GDP has shown a declining trend in recent years: the share of GVA regarding GDP in 2016 amounted to KZT 199,306.5 million (USD 596.726 million), which was 0.58%. However, heroin consumption is the largest one, due to its prevalence among consumers. Despite the lack of production of heroin on the territory of Kazakhstan, its transit and distribution remains stable.