Drug trade isn’t the economic driver many suspected, according to the report.
Colombia may still be the world’s top cocaine producer, but the illicit drug is no longer fueling the country’s economy like it once did, according to a study released Wednesday.
Shifting drug routes, tighter controls and crop eradication have sapped profits from the industry. As a result, coca cultivation and cocaine production represented just 0.3 percent of Colombia’s gross domestic product in 2009. That’s down from about 1.4 percent of GDP in 2001, according to the study released by the United Nations Office on Drugs and Crime.
The report, which is called New Dimensions of the Colombia Drug Trade, belies the notion that Colombia’s economy was ever fueled by cocaine, said Ricardo Rocha García, the study’s author.
There was a time when some argued that drug revenue helped Colombia emerge from the credit crisis of the 1980s and that drug legalization was an economic imperative. But now it’s clear that the economic might of the cocaine trade was a “myth” created by the cartels’ “exhibition of power and riches that overstated its economic impact and distorted our understanding of it,” García wrote.
The study, which is a follow-up to a 2009 report, also found that cocaine revenue flowing into the country has been reduced dramatically amid stepped-up controls on money laundering and Mexican cartels becoming key players.
“The golden age, when the large [Colombian] drug cartels monopolized the wholesale market, is over,” García said. “Now those profits are being appropriated by Central America, Venezuela and Mexico.”
Colombia has made huge strides against the drug trade, reducing coca cultivation by 57 percent over the last decade. That has gone hand-in-hand with a dramatic reduction in crime.
Even so, Colombia produced between 350 million to 400 million metric tons of cocaine in 2010, according to the United Nations. While there is no way to directly compare that production to its neighbors, in 2008 — the last time the UN had regional data — Colombia produced more cocaine than Perú and Bolivia combined.
Despite the billions spent on trying to stem the flow of cocaine, demand has been relatively steady, García said. While U.S. consumption dropped almost 70 percent from 1989 to 2010, Europe has seen cocaine use spike. And there are clear signs that cocaine use in Latin America — particularly among wealthier nations and Central American drug routes — is on the rise
“There’s a strong correlation between increasing living standards and cocaine use,” said García, an economist at Rosario University in Bogotá. And as Latin America is seeing economic growth of 5 percent, “we are going to see new markets for cocaine,” he added. “It’s the dark side of globalization.”
Where Colombia has seen most of its success is in reducing coca crops. The UN estimates this fertile nation had 62,000 hectares under coca cultivation in 2010. That puts it ahead of Perú, with about 61,200 hectares, and Bolivia, with about 30,900 hectares. But Colombian Police Chief Gen. Oscar Naranjo said Perú had recently surpassed Colombia.
BY JIM WYSS
Posted on Wednesday, 12.14.11
NOTE: I couldn't find a copy of the report on the UNODC website or via a websearch yet...
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Study shows shrinking power of Colombian cocaine trade