MALTA: Smuggling of Illegal Drugs
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Introduction and scope
- In the Maltese external sector statistics, an estimate for narcotics is included in the goods account. This estimate is computed by the National Accounts Unit.
- The estimate for narcotics is incorporated in national accounts as from 1995 onwards and in balance of payments (BOP) as from 2004 onwards and is equivalent to the margin between the estimate of consumers’ consumption and imports registered in the BOP data.
- Law enforcement officers and various agencies confirmed that no actual production facilities for narcotics exist in Malta, implying that narcotics are imported.
Data sources and compilation practices
- Main data sources:
- Licit and illicit drug use in Malta 2001, Korf and Benshop, University of Amsterdam, Bonger Institute of Criminology, February 2002;
- National Report to the European Monitoring Centre for Narcotics and Drug Addiction, Reitox National Focal Point Malta, National Commission on the Abuse of Narcotics, Alcohol and Other Dependencies, National Focal Point for Narcotics and Drug Addiction (various years);
- Lifestyle Survey 2007, NSO, 2009.
- Where data was not available to the National Statistics Office (NSO), estimates were based on data averages and information obtained from police, non-governmental organisations (NGOs) and associations, and at times arrived at after wide internal discussion within the NSO.
Step-by-step estimation methodology
- Base population:
- The illicit drug estimate initiates from the population figure of residents in the age bracket of 18 to 65 years (available from the Population and Tourism Statistics Unit).
- Prevalence application:
- A ratio of 3.2 percent is extracted from the 2007 NSO Lifestyle Survey representing the last year prevalence rate of residents of Malta aged 18 to 65; this ratio is applied to that population to derive the population of residents who used any kind of drug during a calendar year.
- A breakdown by drug type is calculated according to the 2001 illicit drug survey except for Heroin.
- The 2001 survey was used extensively for 1995 to date to determine users for Cannabis, Cocaine, Amphetamines, Ecstasy and LSD. A new update of this survey became available in 2015.
- Initial results cited from the 2001 survey (Licit and illicit drug use in Malta 2001) reported last year prevalence rates: Heroin 0.1 percent, Cocaine 0.3 percent, Cannabis 0.8 percent, Ecstasy 0.2 percent, LSD 0.1 percent, Amphetamine 0.04 percent.
- The prevalence year for heroin was ignored due to better sources; prevalence rates for Cocaine and Cannabis were extrapolated forward according to trends of treated clients provided by several drug treatment providers (e.g. National Report 2012).
- Reconciling totals and topping up:
- The sum of drug users derived from last year prevalence rates is usually less than the figure derived from the lifestyle survey ratio. Hence, drug users for all narcotics excluding Heroin are topped up.
- Heroin estimate:
- Data on Heroin users is available almost on a yearly basis from the National Report to the European Monitoring Centre for Drugs and Drug Addiction.
- The estimate of total Heroin users is available from the annual report referred to as ‘problem-drug use’ estimated using capture-recapture sampling, based on data from Maltese daily opiate users attending treatment service.
Adjustments to user counts and consumption
- Treatment adjustment:
- Drug users undergoing treatment are deducted as these do not buy narcotics from the market, however, it is assumed that 2 percent of these still buy occasionally from the market.
- The number of treated clients is extracted from the National Overview of the Allowances for Exhaustiveness Report 2012; these clients are generally on substitution treatment (methadone) and are not treated as regular clients.
- One-time users adjustment:
- An adjustment is made to eliminate one-time users:
- Cocaine users are topped down by 15 percent;
- Cannabis users are topped down by 40 percent;
- Ecstasy, LSD and Amphetamines are topped down by 10 percent;
- No adjustment for Heroin.
- This adjustment is based on data obtained from ISTAT (Measuring Illegal Activities – Italy).
- Regular vs occasional user split:
- Distribute ‘net’ drug users between regular users and occasional users by type of narcotics:
- Heroin users were all placed as regular users;
- Other narcotics were distributed 16 percent regular users and 84 percent occasional users.
- This adjustment is based on data obtained from ISTAT (Measuring Illegal Activities – Italy).
- Consumption quantification:
- Consumption trends used: hypothesis by Mazzager for Heroin, a German study for Cocaine, and hypotheses used by ISTAT for the rest; figures were verified by local NGOs.
- The calculation leads to total grams consumed by drug type, multiplied by average street prices by type of drug (prices obtained from editions of the National Report to the European Monitoring Centre for Narcotics and Drug Addiction, including the National Report 2012), yielding total consumption to be included in private household consumption expenditure.
Linkages across statistical domains and national accounts treatment
- Business Register (BR) does not include producers involved in underground or illegal activities; these are catered for in national accounts.
- Exhaustiveness adjustments amount to 3.7 percent of total gross value added (GVA) at basic prices in the production approach.
- Production approach adjustments include:
- N1 - Producer deliberately not registering - underground; in relation to furniture production (Section C - Manufacturing) and domestic help (Section T - Activities of households as employers);
- N2 - Producers deliberately not registering - illegal; reported for illegal gambling, prostitution and narcotics in gambling and betting activities (NACE 92, Section R); Other personal service activities (NACE 96, Section S) and wholesale trade, except of motor vehicles and motorcycles (NACE 46, Section G).
- Accounting treatment:
- Prostitution and narcotics were included in national statistics for the first time in the European system of accounts (ESA) 2010 time series for the period 1995 to date.
- Likely earnings from prostitution are included in other personal services (NACE 96) in the output approach and in household final consumption expenditure in the expenditure approach.
- Margins earned on narcotics were included in the output of wholesale and retail trade (NACE G), total value of narcotics consumed is included in private household consumption expenditure, and imports are valued at the wholesale price.
Current challenges and conclusions
- Malta estimates prostitution from the supply-side; data sources are very limited and do not fit national accounts purposes.
- It was not possible to make separate estimates for different types of prostitution (e.g. street, brothel, apartment, club) or for the share consumed by resident and non-resident prostitutes as requested by the GNIC/230 on illegal activities in national accounts.
- Consequently, no estimate for prostitution is currently recorded in BOP data.