Drugs Cloud Colombia's Economy

June 22, 1991

Most people know that cocaine retards the brain. What scholars at Colombia's Fedesarollo economic research organization say is that it also badly retards the economy in the country where cocaine is thought to be king. That's something to remember as it sinks in that Pablo Escobar, head of the Medellin cocaine cartel and one of the world's most brutal drug runners, is ensconced in a specially built prison from which he will continue to operate his drug ring.

Here's what the economic researchers mean:

Drug profits, which have made thugs like Escobar rich, are regularly repatriated as contraband consumer goods. Large shopping centers in Medellin and Bogota handle $1 billion worth of this contraband each year. Local industries, forced to compete with these illegally imported goods, face reduced sales and thinner profits. That forces many legitimate business out of the market.

This, in turn, has another bad effect. Drug lords, flush with local currency from the contraband sales, spend it on imported goods: sports cars, luxury limousines, motorcycles, exotic animals and art works. That does little for the Colombian economy. So non-drug-trade employment goes down, further hurting local marketeers.

Then there is the cost of law enforcement, a whopping $1 billion a year in Colombia for police and military operations to quell drug trafficking.

When legitimate Colombian businesses seek to export goods, the image of drug kingpins dogs their heels. In a 1988 study, Bogota researcher Patricia Correa found that exporters had trouble getting transportation for their wares and in overcoming fear of entanglement with drugs. And when Colombia opened its doors to foreign investment two years ago, Ms. Correa said, not one dollar came in.

Meanwhile, there sits Pablo Escobar, comfortably living in a prison whose security he controls, protected from the long reach of the U.S. law his henchmen flout by a specially enacted Colombian law which ensures that he will never be extradited. The crimes which got him named Colombia's Public Enemy No. 1 include terror bombings against his country's government, the slaughter of hundreds in assassinations and violation of international smuggling laws. His biggest crime, however, is the subversion of the economy on which law-abiding Colombians depend and the sabotaging of their dreams of building a legitimate, industrial economy.

When you get past the glitter of the traffickers' clothes, cars and fancy mansions, it is clear that drugs foul everything they touch. Sufferers of addiction knew that all along, as did their families, suffering with them.

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