Colombia’s primary export is shifting from oil to cocaine. According to a recent report by Bloomberg Economics, with oil exports declining by 30% in the first half of 2023, cocaine revenues are predicted to surpass oil revenues this year.
As the world’s largest cocaine producer, Colombia reached its highest production level since 1991, generating 1,738 tons of cocaine valued at $193 billion in 2022.
In 2022, cocaine exports generated $18.2 billion, closing in on the $19.1 billion generated by oil exports.
Coca growers have become more efficient, utilizing better yields and investing in irrigation and fertilizers, resulting in higher coca crop yields of 230,028 hectares in 2022.
The average crop yield increased from 4.3 to 7.0 tons of coca leaves per hectare between 2013 and 2020.
According to economist Felpi Hernandez’s estimates, Colombia’s illicit cocaine sector accounted for 5.3% of the country’s GDP in the past year.
Cocaine’s Resilience: Colombia’s Ongoing Battle Amidst the Failed War on Drugs
Despite four decades of U.S.-led efforts to combat drugs in Colombia, the country remains the world’s largest cultivator of coca and producer of cocaine.
Throughout this period, Colombia has mainly focused on disrupting the drug supply chain, often criminalizing farmers at the bottom of this chain.
Even the ambitious $10 billion U.S.-backed Plan Colombia from 2000 to 2015, which aimed to combat drug trafficking and organized crime, ultimately fell short of eradicating the drug industry. Colombia’s coca and cocaine production continues to surge, reaching unprecedented levels.
The White Lifeline: How Coca Fuels Rural Communities
Coca cultivation sites can stretch for miles, providing a vital source of income for rural communities with less than 100 families. The illegal coca economy supports the livelihoods of nearly everyone involved, from farming and harvesting to selling the crop, despite the risks of arrest and imprisonment.
Local infrastructure, including roads, sports facilities, and homes, often owes its existence to the proceeds from coca cultivation, underscoring its central role in the economic survival of these communities.
Colombia’s first leftist president, Gustavo Petro, is taking a novel approach to address the country’s drug issue. Petro openly criticizes the “categorical failure” of the war on drugs and its impact on Latin America, advocating for a shift in drug policies.
Recognizing the need for change, Petro’s administration aims to invest in rural communities.
Unemployment And Land Inequality In Colombia’s Economy
In 2020, Colombia faced its highest recorded level of unemployment in history due to the coronavirus pandemic and the subsequent economic contraction. Nationally, including rural areas, unemployment stood at 15.9%, up from 10.5% the previous year.
In 2020, Colombia had 19.8 million employed, 3.76 million unemployed, and 16.25 million individuals inactive out of its population of 50 million. The country lost 2.44 million jobs, and its economy contracted by about 6.8% due to COVID-19 lockdowns and closures.
Furthermore, the Organization for Economic Co-operation and Development (OECD)’s February 2022 report on Colombia highlighted that 60% of workers are in informal employment, depriving them of access to social security benefits.
Rural inequality in Colombia, where 1% of the population owns 81% of the land, has far-reaching economic consequences.
Fragmentation, Drug Trade, And Livestock Dominance
This skewed distribution of land ownership has pushed peasants to ecologically unsuitable areas, resulting in land fragmentation and limited agricultural productivity.
Additionally, the emergence of the drug trade has made colonized areas profitable, contributing to the erosion of state control and perpetuating land inequality.
The concentration of land ownership has led to extensive livestock farming rather than productive agriculture, impeding economic development.
According to the Geographic Institute of Colombia, land ownership inequality in rural areas, measured by the Gini coefficient, averages 89.7%, confirming that Colombia has a significant concentration of rural land in a few hands.
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Photo by Gabriel Porras on Unsplash.
