5. Conclusion

The national accounts include estimates of three illegal activities: the illegal production and sale of drugs; prostitution; and the illegal trade in tobacco. In 2021, according to new estimates produced for the revised national accounts, these activities contributed €4.5 billion to the Dutch economy (the GDP of the Netherlands). This works out at 0.5% of the total economy. The previous estimate of the extent of the illegal economy for the 2015 reporting year was 0.6% of GDP. However, that estimate still included specific illegal activities that were not mandatory parts of the national accounts in Europe.

Generating estimates for the illegal economy involves greater uncertainty than estimating parts of the economy for which plenty of direct information is available from registers and surveys, and the assumptions made when estimating the illegal economy can also significantly influence the outcomes. The fact that these economic activities are conducted in the shadows means that we do not have very reliable sources. The assumptions around the trade in cocaine, primarily the confiscation percentage and the prices, heavily influence the outcome, and similar caveats should be understood to apply to the other illegal activities.

The location of the ultimate owner of the illegal process also has a significant effect on the extent of the estimate of illegal activities in the Dutch economy. Where owners are non-resident, a large part of the value is allocated to their overseas location. For example, cocaine generated €10.7 billion in earnings within Dutch national borders, but most of these profits are enjoyed outside the Netherlands. Just €1.2 billion in value was added to the Dutch economy. This is also true, to a lesser extent, for other illegal activities (primarily related to synthetic drugs).