My experience tells me that things were worst some years ago, I remember lots of people were on hard drugs on my home town, sadly most of them died. Also the big drug ghettos in Lisbon almost disappeared. The thing is Portugal as a peripheric country is in a very peculiar situation and the regulation problem should be seen in that context. It is normal for Portugal to lead drug aprehensions every other year because it's one of the main drug gateways from Africa (Marrocos) and from South America and it's close relationship with Brasil.
But the spirit of the law doesn't convince me at all, there are lots of people living from selling drugs and from the stats like 50% arrested were in the 16-20 years range, mostly everybody consumes marijuana. The problem may not be the law, but the environment around the schools doesn't benefit from this law, this should be somehow compensated.
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Well it's not empirical evidence but Eastern Europe is colloquially known for it's vice in general - not specifically a drug problem, perhaps, but other similar issues.
However I would tend to agree with you it's possibly not a major cause. I suspect there was a sex/drugs revolution in a particular area of society - and this is where the gp's experience comes from.
According to your rationale, oppressive regimes lead to increased drug abuse. Well, Spain also had a dictatorship for decades. The entire "Eastern Europe" lived under Soviet oppression for decades, too. The USSR didn't have a sexual revolution in the 1960s. I would love to see data that suggests that oppression causes people to go crazy and indulge themselves with drugs once they are "free". I am not saying it's not a possibility, but there's talk, and then there's data...
Almost all my friends in Portugal smoked Marijuana. They were not all that open about it, but everyone knew. By contrast, none of them ever touched cocaine or heroine. They were not stupid. Everyone had seen heroine junkies dragging themselves around town, their lives destroyed beyond repair.
Personally, I think the ones drawn to hard drugs are the weak people who can't deal with reality. Many of them die, but then... perhaps the purpose of their lives is to serve as warnings to others.