Saturday, April 21, 2012

The Economics of Weed

Considerations about legalizing marijuana, and how growing weed in Palestine would benefit health and economy...

Solving the PA's Budget Deficit

The PA government regularly faces fiscal problems, partly because of the Israeli occupation, that deprives them of an estimated 400M$ of tax revenues p.a. due to lacking control over its borders. Partly because the PA hires about 140.000 public servants which are bread winners for about one third of the population on the demand side of the economy. Partly because the supply side of the economy is performing poorly (well explained on a one-pager here), and the moderate taxation is poorly enforced, both of those phenomena can partially be blamed to the occupation.
The potential of Marijuana tax revenues was calculated among several European countries, estimating tax income of between 15 and 40 Eur per capita per year if legalized. Compared to Europe, Palestine has a very young population with higher consumption patterns. The black market prices are estimated 1.5 times higher than in Europe, so regardless of lower purchasing power, I believe it is fair to estimate 40 Eur per capita tax revenues. Palestinian grass would inevitably end up on the Israeli market after being taxed, so you would serve a population of around 11 M people with an averaged 30 Eur per capita per year (due to older population in Israel), that's 330M€ or about 0.5 billion $, that would solve about half of the PA's 2012 budget deficit.

Health and Quality Control

Contrary to popular belief, legalization of Marihuana does not lead to significant raises in consumption patterns. Compare, for example consumption in the Netherlands with its neighbouring countries. Also, legal Marijuana keeps people away from distribution channels of illegal hard drugs (such as Heroine or others). Furthermore, a governmental control of the sector can lead to better quality, less chemical content and less pesticide residues. With a legalized and transparent market, even quality labels such as "organic production" can be established, and the locally produced high quality Marijuana can also be utilized for medical purposes.

Export Market to Israel

Today, over 90% of Marijuana on the Palestinian market is imported from Israel, further worsening the deep trade deficit that Palestine has with Israel. Legalizing Marijuana in the areas under Palestinian sovereignty is likely to cause local grass not only conquer the Palestinian domestic market, but also end up serving the largest part of the Israeli market. Just imagine a small plastic bag with organic label and taxation seal from the Palestinian Authority being sold at affordable prices in Tel Aviv. How thankful those Israeli clients would be to have a well established system of quality control in the neighbouring country.

Attracting Tourists

Besides Iran, Palestine would be the second country in the Middle East to legalize Marijuana. What has proven to attract a lot of tourists in Amsterdam, could likewise bring more visitors to the coffee shops in Nablus, Hebron, Ramallah, Bethlehem and so on.

Knowledge Transfer from Netherlands

Not only with effective legal and regulatory environment, but also technical expertise in seeds, and cultivation indoors and outdoors can be found in the Netherlands. If the PA government decides to take steps towards legalization, I am sure that the Dutch development aid would be in a good position to recruit the needed international expertise to develop the legal and regulatory framework as well as a strong and competitive agricultural and processing industry.

Oslo and Weed

According to the Interim Agreement on the West Bank and the Gaza Strip, also known as Oslo II, in particular chapter 4 refers to drugs:
"cooperate in combating criminal activity which may affect both sides, including offenses related to trafficking in illegal drugs and psychotropic substances, smuggling, and offenses against property..."

Well sounds like Oslo would be kind of infringed by legalizing Marijuana -- or maybe not? It's talking about illegal drugs, but if the PA defines cannabis to be legal, then it is actually no infringement, right? And if some Israeli dealers decide to buy Palestinian weed and smuggle it out to Israel, that's beyond control of the PA -- and the PA doesn't need to pay special attention to it.

Islam and Weed: "And do not kill yourselves" [Al-Nisaa' 4:29]

If sin is present and it is great, then it is forbidden. Undoubtedly this alcohol is harmful to the mind and body, and Allaah has forbidden everything that harms the body and mind, and saps the strength. Everything that is harmful to a person is not permitted, because Allaah says (interpretation of the meaning):
“And do not kill yourselves”
[al-Nisaa’ 4:29] if sin is great, it is forbidden, but what about the small sins like Marijuana? Correct me if I'm wrong, but from Islamic point of view, smoking weed falls into the same category as, for instance, smoking cigarettes, or an unhealthy diet. Six million people die each year from smoking cigarettes, probably a similar figure from heart diseases as a consequence of unhealthy diet, but there was not a single case of death as consequence of smoking weed reported worldwide.
So, isn't' it hypocritical to allow smoking and all kinds of unhealthy food, while banning Marijuana, which, in contrast to cigarettes, or french fries, actually has a proven medical use?
The principle of necessity can be applied on the basis of the Islamic principle; “Necessity legalizes prohibitions”. This principle is taken from Allah’s saying: “He has explained to you in detail what is forbidden to you except under compulsion of necessity.” [Sûrah al-An`âm: 119].

If there is necessity out of medical use, and even recreational use of Marijuana is a smaller sin than other legal things, why not just legalize it all together? If it's ok in Iran, which pretends to be an Islamic theocracy, Palestine shouldn't have an issue with it, right?


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