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Colombia to Include Drugs in Its GDP Calculation


Summer 1999

Colombia will begin the controversial practice of including income earned from the production of coca, opium poppies, and marijuana in its calculations of the size of the nation's economy. By including such revenues in the gross domestic product (GDP), economists believe they can derive a more accurate assessment of all economic activity in the country and eliminate distortions in economic figures which serve to hamper their ability to effectively curtail production and trafficking of drugs (Larry Rochter, "Colombia Adjusts Economic Figures to Include Its Drug Crops," NewYork Times, June 27, 1999, p. A3; "Columbia to Include Illegal Drugs in GDP," Memphis (TN) Commercial Appeal, June 10, 1999).

Defending the move, Tomas Gonzalez Estrada, the chief economic adviser to Colombian President Andres Pastrana, said, "This is a purely technical exercise, not a political measure." Colombian officials said that they are simply complying with standard International Monetary Fund (IMF) and World Bank guidelines for potential borrowers which state "transactions involving the sale or purchase of illegal goods and services must be recorded." In early June, General Barry McCaffrey, director of the Office of National Drug Control Policy (ONDCP), touted the decision as "a political error" and ONDCP spokesman Robert Weiner said, "They say it in no way means an acceptance of or the legalization of drugs, but they have not fully explained that position or gotten that message out."

The recalculation could increase the size of the deteriorating economy by 1%, according to Colombia's National Statistical Administrative Department. However, Gonzalez emphasized that "we are not doing this to improve the performance of the Colombian economy," but instead to "have more effective tools" to design useful strategies, such as crop substitution. Colombian officials say that the current GDP is nearly $80 billion and the new assessment will likely show that illicit drugs amount to between one-quarter and one-third of Colombia's legal exports, or possibly an amount totaling $4 billion a year ("Colombia Counts Drug Income in Official Data," Orange County Register, June 27, 1999).

Dr. Tomas Gonzalez - Consejo Economico, Presidencia de la Republica, Casa de Narino, Carrera 8A. No. 7-26, Santafe de Bogota, Colombia, Tel: (011) (571) 334-2607 or 562-9300, Fax: (011) (571) 336-1128.

Gen. Barry McCaffrey - Office of National Drug Control Policy, 750 17th Street, N.W., 8th Floor, Washington, D.C. 20006, Tel: (202) 395-6618, Web: <>.

Robert Weiner - ONDCP, Office of Public Affairs, 750 17th Street, N.W., 8th Floor, Washington, D.C. 20006, Tel: (202) 395-6626, Web:<>.