Netherlands adds UKP1 bn illegal earnings to official economy

The illegal earnings of drug dealers, prostitutes and gamblers has been
included in the latest official figures on the Dutch economy.

According to a government report, approximately UKP1 billion is earned
from drug dealing, UKP300 million from prostitution and UKP200 million
from illegal gambling. The sale of stolen goods is believed to have
contributed UKP56 million to the Dutch economy.

In total this represents 1 per cent of the Gross Domestic Product (GDP).
The Netherlands is the first country to officially publish its illegal
earnings. "We were going to keep the figures quiet but somehow they got
onto the Internet, so we decided to go public," a government spokesman
said.

Other European countries are expected to investigate illegal earnings as
a result of a ruling by the Commission of European Communities which
states that in future all member countries must include illegal earning
in their national accounts. Britain is preparing its figures on illegal
earnings, but is likely to have a tougher time producing statistics than
the Netherlands, which tolerates prostitution and soft drugs. Estimates
were partly based on tax paid by prostitutes and the sale of cannabis in
coffee shops.

Information on hard drugs was collected from health and social care
agencies as well as the police. The annual income from the domestic
consumption of the drug ecstasy totalled about UKP60 million. Export
sales are estimated at UKP26 million.

Estimates on prostitution were based on PhD theses and essays. "It's a
very popular theme for academics," said the report's author, Ron van der
Werf. "The estimate did not include lingerie and other objects connected
to the profession because they are registered under household
consumption."

The Dutch government has every reason to feel cheered by other Treasury
figures. The rate of economic growth for the Netherlands in 1996 turned
out to be 3.3 per cent the strongest increase in the Netherlands since
1990. The rate of growth in the Netherlands is almost twice the average
of the European Union as a whole (1.7 per cent) and the public sector
deficit fell to 2.3 per cent.