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Colombia: Illegal Drugs
Country Study > Chapter 3 > The Economy > Illegal Drugs


The illegal drug problem appeared in the 1970s, intensified in the 1980s, and has continued unabated since then. The Colombian government has tried many different policies since 1990 to fight the illegal drug trade. Gaviria put his administration’s policy emphasis on countering narco-terrorism—the combination of illegal drug businesses and terrorism. After the 1991 constitution banned extradition, the government adopted a program allowing major traffickers to do jail time in Colombia in return for lenient sentences, and eventually a group of drug lords headed by Pablo Escobar Gaviria took part in it. As there was clear evidence that justice was neither thorough nor impartial, the government attempted to transfer Escobar away from the comfortable so-called prison that he had built for himself near Medellín; Escobar and several of his associates escaped. This situation forced the Colombian government to make major efforts to capture, dead or alive, key figures of the Medellín Cartel. Eventually, several of those drug lords were put back into prison, or, like Escobar, were killed. After serious allegations that the Cali Cartel had financed his presidential campaign, Ernesto Samper’s administration captured the heads of the cartel, reestablished extradition in 1997, and introduced court powers in order to allow the state to take possession of properties obtained with funds from illegal activities.

The 1990s were years of significant increase in the area of coca-crop cultivation, from 40,100 hectares in 1990 to 163,300 hectares in 2000. The 1990s also saw the start of opium-poppy cultivation, with a production area in 1994 of 15,000 hectares. Besides, the Cali and Medellín cartels were gradually replaced by the Revolutionary Armed Forces of Colombia (FARC) and the United Self-Defense Forces of Colombia (AUC) as major players.

To confront these issues, the administration of Andrés Pastrana Arango (president, 1998–2002) designed a largely U.S.-financed program called Plan Colombia, which has been in operation since then. Plan Colombia strengthens the state presence in drug-producing regions and is combined with a range of social and environmental measures. Given that a significant amount of illegal drugs leaves Colombia by sea, in 1997 Colombia and the United States signed a maritime agreement to strengthen procedures and cooperation in coordinating maritime interdiction. In 1999 the two countries also signed a bilateral air interdiction agreement with resources from the Air Bridge Denial program. According to local authorities, both of these interdiction programs have contributed significantly to restriction of the flows of illegal drugs out of the country.

Recent policies and eradication programs have contributed to reducing the production areas of drug crops. For example, in 2006 the production area of coca crops fell to 78,000 hectares; the opium-poppy production area fell to 1,023 hectares; and the number of illegal processing labs destroyed rose from 317 in 1999 to 2,217. Furthermore, the government of President Álvaro Uribe initiated procedures for bringing to justice the main leaders of the AUC and in 2008, when several of them would not cooperate with the program, for extraditing them to the United States. The FARC also lost in 2008 three members of its seven-member Secretariat, including FARC founder Pedro Antonio Marín (also known as Manuel Marulanda Vélez, or “Tiro Fijo”—Sure Shot). Many of the other members of the AUC and the FARC have been killed, captured, or have demobilized through specially designed programs.

Despite many efforts, reductions in production areas have been accompanied by increases in productivity. As such, the United Nations Office on Drugs and Crime (UNODC) estimated that in 2006 the potential coca production of Colombia passed from 463 metric tons in 2001 to 610 metric tons in 2006. Even allowing for changes in measurement methodologies, these numbers are a sign of concern about the effectiveness of the policies adopted so far. According to UNODC, in 2006 Colombia supplied 62 percent of the world’s cocaine; an estimated 67,000 households were involved in coca farming; and 83 percent of cultivation took place in the departments of Putumayo, Caquetá, Meta, Guaviare, Nariño, Antioquia, and Vichada.

Colombia has been the main supplier of cocaine and an important supplier of heroin to the U.S. market, and a major supplier of these drugs to the EU. The importance of Colombia as a supplier of illegal drugs, however, does not necessarily mean that Colombia as a whole has profited from such trade. Data gathered by U.S. authorities show that a significant share of the revenues generated by this illegal trade accrues mainly at the retail level and remains in developed countries because the price of cocaine increases dramatically during the commercialization process. It has been estimated that the retail price in the United States is 200 times the price paid for the equivalent product at the farm level in Colombia and eight times the price received by whoever makes the wholesale export into the U.S. market. Inasmuch as retail sales in the United States are undertaken mainly by persons who are not Colombian nationals, most of the profits from the drug trade go to foreigners. Furthermore, the profits generated in consumer countries that do end up in the hands of Colombian nationals are not necessarily transferred back to Colombia, at least not entirely. Although the annual value of processed cocaine and other exported illicit drugs is believed to exceed US$5 billion, only about one-half of this amount actually returns to Colombia. Despite counternarcotics efforts since the mid-1980s, drugs are currently as available as ever, of better quality, and at lower prices.

The economic effect of the illegal drug trade also includes the distortional effects that foreign-exchange revenues from such activities have on legal production of goods and services. Furthermore, drug proceeds foster corruption, fund contraband and money laundering, jeopardize political stability, and weaken institutions. They have also stoked Colombia’s internal conflict. Recent estimates indicate that Colombia’s GDP growth rate has been diminished by about 2 percent per year because of the deleterious effect that the drug-fueled internal conflict has had on investment and productivity. The overall effect of drug trafficking on the Colombian economy remains negative even though certain sectors, particularly the housing industry in certain cities, may have received a boost from this illegal activity. According to the Ministry of Agriculture and Rural Development, between 1995 and 2006 the share of illicit drugs in GDP fell (see The Rise of Drug Trafficking Organizations, ch. 1; Drug Trafficking and the Origins of Paramilitarism, ch. 5).

Data as of 2010

Last Updated: January 2010

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Colombia was first published in 1988. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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