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.
Where data was not available to the National Statistics Office (NSO), in particular for certain types of illegal activities, estimates were based on data averages and information obtained from police, non-governmental organisations (NGOs) and associations. At times, data was arrived at after a wide internal discussion within the NSO.
The main data sources for the compilation of illegal substances include:
The illicit drug estimate initiates from the population figure of residents in the age bracket of 18 to 65 years. This figure is available directly from the Population and Tourism Statistics Unit. A ratio of 3.2 percent is extracted from the 2007 NSO Lifestyle Survey which represents the last year prevalence rate of residents of Malta aged 18 to 65. This ratio is applied to this specific population in order to derive the population of residents who made use of any kind of drug during a calendar year. A breakdown of this figure by drug type is calculated according to the 2001 illicit drug survey except for Heroin. The 2001 Licit and illicit drug use was used extensively for the period 1995 to date to determine the amount of drug users with respect to Cannabis, Cocaine, Amphetamines, Ecstasy and LSD. A new update of this survey became available in 2015. The initial results of this particular survey revealed that the last year prevalence rates of Heroin, Cocaine, Cannabis, Ecstasy, LSD and Amphetamine were 0.1 percent, 0.3 percent, 0.8 percent, 0.2 percent, 0.1 percent and 0.04 percent respectively (Licit and illicit drug use in Malta 2001). The prevalence year for heroin was ignored due to better sources while the prevalence year of cocaine and cannabis was extrapolated forward according to the data on trends of treated clients provided by several drug treatment providers over the years (e.g. National Report 2012). These prevalence rates for Cocaine, Cannabis, Ecstasy, LSD and Amphetamines are applied to the population figure of 18-65 years old.
The sum of drug users derived from the last year prevalence rates is usually less than the figure derived from the lifestyle survey ratio. Hence, drug users for all the narcotics excluding Heroin is topped up. 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 the total Heroin users is available directly 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.
The total population by type of drug has been adjusted as follows:
The consumption trends used in this assumption were according to the hypothesis by Mazzager for Heroin, a German study for Cocaine and hypotheses used by ISTAT were applied for the rest. These figures were also verified by local NGOs and considered reasonable. This calculation leads to the total amount of grams and is then multiplied by the average street prices by type of drug. Prices are obtained from the various editions of the National Report to the European Monitoring Centre for Narcotics and Drug Addiction. These street prices are also available in the National Report 2012. Ultimately, this provides the total consumption to be included in the private household consumption expenditure. Law enforcement officers and various agencies confirmed that no actual production facilities for narcotics exist in Malta. This implies that narcotics are imported.
The Business Register (BR) does not include producers involved in underground or illegal activities. However, these are catered for in national accounts. Value of production activities that are not directly observed are, in principle, included within the national accounts production boundary. Exhaustiveness adjustments amount to 3.7 percent of total gross value added (GVA) at basic prices in the production approach. The production approach includes adjustments for:
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. The likely earnings from prostitution are now included in other personal services (NACE 96) in the output approach and in household final consumption expenditure in the expenditure approach. The margins earned on narcotics were included in the output of wholesale and retail trade (NACE G), while total value of narcotics consumed is included in private household consumption expenditure and imports are valued at the wholesale price.
Malta estimates prostitution from the supply-side. In the case of the Maltese context, data sources are very limited and do not fit national accounts purposes. For this reason, it was not possible to make a separate estimate for different types of prostitution (e.g. street, brothel, apartment, club) as requested by the GNIC/230 on illegal activities in national accounts. The same situation applies for the share consumed by resident and non-resident prostitutes. To this end, no estimate for prostitution is currently recorded in BOP data.
