Recently, a global transition to a more diffuse distribution of economic power is broadly recognized, pointing to a shift in the balance of global growth from rich to low- and middle- income economies. Colombia may be a prime example as its recent rapid per capita income growth of 8.8% per year points to the potential for Colombia's convergence to the ranks of rich countries. However, Colombia's economic growth has been constrained by 40 years of a costly and ineffective drug war policy that has failed. The illicit activity of the drug cartel grosses approximately $10-$20 billion a year; it does not enter into the GDP accounting. In addition, the FARC (Revolutionary Armed Forces of Colombia) has stifled Colombia's drive towards economic prosperity. Baring the impasse which is largely social and political the economy would flourish.
Colombia's drug production conforms to the theory of a French classical economist -- Jean Baptiste Say (1803), who coined Say's law -- that supply creates its own demand. It follows that production of illicit drugs creates demand which is injurious for the user. And the drug users' (consumers) demand along with supply has created a black market internationally. Drug war has not suppressed production on the supply side. And on the demand side policies such as criminalization, incarceration and stigmatization has not suppressed the use of illicit drugs. It is time to modify both supply and demand policies and shift to providing farmers' subsidy on the supply side for not producing illicit drugs and employing medical treatment of drug users instead of criminal sanctions. Such shift in policies would disarm drug cartel as a way to deny profit of drug dealers.
Colombia is nestled in the northern part of South America, with 46 million people and a GDP of $235 billion, is the fourth largest economy in the continent. Although Colombia's per capita GDP is well below the United States', a rapid increase can be seen starting around the year 1999, which was the same year Plan Colombia was formulated, an agreement that provides Colombia with military and monetary aid by the United States to combat drug trafficking.
Considering recent increases in Colombia's GDP per capita at 8.8% per annum there is great potential for economic convergence, and in fact, the estimates of the convergence theory point to a possible Colombia's per capita income convergence in roughly 42 years, i.e., by the year 2051. However, this forecast is highly optimistic at this time considering Colombia's political impasse. Drug trafficking undoubtedly plays a large role in the Colombian black market economy; cocaine is produced at $1,500/kilo and is sold in the U.S. for as much as $50,000/kilo. There is so much profit to be made with the trafficking of drugs that even many Colombian government officials fall victim to temptation.
Moreover, the aid funds from Plan Colombia are being used to fight the FARC (Revolutionary Armed Forces of Colombia) (CRS). This Marxist-Leninist guerrilla organization has been playing Robin Hood (taking from the rich and giving it to the poor) and has been at war with the Colombian government since 1966. This time period has been known as La Violence. The FARC raises its funds through ransom, kidnappings and taxing drug trade out of its South Colombian region. Plenty of Colombia's resources have been used to fight this brutal civil war that has lasted about half a century, with no end in sight. In fact, as mentioned earlier, Plan Colombia has further instigated the FARC because of the pesticides being spread all over the countryside to kill the coca plants that cocaine comes from. However, the pesticides are also killing the legal crops of the small Colombian farmers. Moreover, the pesticides are also damaging the farmers' health making it even harder for them to provide for their families.
The key to forging ahead is for the Colombian government, with the help of international assistance, makes it economically unappealing for the FARC's guerrilla fighters to continue fighting in support of the FARC's leaders and their ideology. Economic incentives must be offered to these fighters exceeding the benefits that they receive for fighting. With a lack of support and a strong central government the 14 leaders of the FARC will have no way of continuing their fight.
No doubt FARC's mission will become superfluous when Colombia's per capita income rise to a high level. Indeed, the end of the FARC conflict would also free many of Colombia's resources that would be put to better uses instead of being wasted on the exhausting civil war. Also, currently FARC provides great armed protection to the Colombian drug cartels that operate out of the land that the FARC controls. Without this strong source of protection, the drug cartel would be automatically weakened. Once the area is rid of the coca plants, the land can be used for the production of legal crops. In fact, Colombia is rich in natural resources such as minerals and fuel oils, so there is no reason why Colombia cannot prosper once these issues are resolved.
Nake M. Kamrany is professor of economics and director of program in law and economics at the University of Southern California. Danielle Nicole Ramirez is an Associate at the Research Group for Global Conversion of Per Capita Income in Los Angeles.
you're doing great work please continue we need global prosperity and the research group is leading the way
I'm all for global prosperity - I think that these proposed economic incentives will definitely change the route for Colombia. They have the potential.
Great article thank you !
i think that Colombia's problems will vanish once farmers are paid higher salaries from the govt rather vs the cartel.
The Convergence Theory (accredited to the Research Group for Global ConvergencÂe of Per Capita Income in Los Angeles) states that over time the Columbian per capita income will increase as it is currently doing so. Having less and less poor people (as Columbian PCI will increase) in Columbia will undermine the very EXISTENCE of FARC. It's always better to use economic insentives vs. millitary power.
This way you get rid of the drugs and FARC all together.
It's better than clockwork!
Definitely a feasable solution.
a very good solution but where will the government get that money to fund the farmers?
Users of illicit drugs must be given a choice of out patient clinic until they quit using illicit drugs. When the demand for illicit drugs fall, dug cartgels will disappear. Use of economic incentives on the supply and demand sides present themost economicand humane approachto fightng the drfug war..
And our military in a place like Colombia is like that old line about folks good with a hammer. They tend to see all problems as nails, and bash away accordingly. And even our military doings in the region would not have reached the scale they now have were we not interested in having a place from which we might harass Chavez, should we wish to, our eternal war on drugs notwithstanding.
We will spray indiscriminately, but we will not take time or effort to avoid legal crops; we will bolster the Colombian military through military cooperation, arms deals, contractors and training ,as these activities are profitable to politically-wired corporations here, but we are not likely to pay off FARC or farmers, and even if we chose to, we would not oversee these payoffs sufficiently, nor monitor the doings of the payees after payment.
Thoughtful Colombians should understand the limits of our interests there. Our interests are our own, not theirs, and without much warning, can shift elsewhere, and will.
Further, our aims may even be counter-productive to that nation and contribute to political instability in the region.
Presently, we are constrained in our doings in all matters by the necessities of corporatism. The US will fund mercenaries and training and technology and military equipment for Colombia because there is in that funding profits for corporations here. We will not fund payoffs to FARC and farmers, because there is no profit to our corporations involved.
How well can the Colombian economy stand on its own today, sans any American foreign aid? Were the authors' wishes for the region acted upon entirely, how much more aid would flow into the nation? And if the economy would thereby be dependent on it to a significant degree, how independent would Colombia be?
It is easy to get congress to keep drugs illegal but it would be hard to get Congress to out rightly appropriate billions of dollars to support the Taliban. Same result different means.
What's this idiocy that we do not attack the Taliban while they are harvesting their drugs??? Wouldn't that be the BEST time to attack --- unless the US government wants to keep the drug trade going.
if we were truly concerned with global prosperity to the extent of the Research Group for Global ConvergencÂÂÂe of Per Capita Income in Los Angeles, redistributing our funds to simple yet effective strategies of subsidizing farmers attacks the source (production) of the drug problem