Colombia's 'Gold' Proves Both Blessing and Curse

Publish date: 2024-08-06

CARTAGENA, Colombia, Feb. 24, 1980 -- Six years after "Santa Marta Gold" became the world's most widely smoked marijuana and Colombia the main U.S. source of pure cocaine, the "Colombian connection" has had a profound impact on this country's social, economic and political life.

Colombians, who largely viewed the drug trade as a foreign problem until about two years ago, have come to see that its multibillion-dollar impact on their country has been, at the least, a mixed blessing.

Marijuana and cocaine exports have earned an estimated $1.5 to $1.6 billion a year, provided work for thousands of small farmers and created a "new class" of millionaires whose families are being integrated into the country's elite.

On the other hand, the drug trade has spawned violence, corrupted Colombia's political institutions and contributed to inflation. It has forced the government to take economic and political decisions that threaten legitimate businesses and even Colombia's democratic form of government because of increasing militarization in the drug-producing Guarjira Peninsula.

Alvaro Gomez, a Conservative Party senator and editor of El Siglo, a leading Bogota newspaper, said in a recent interview that the drug trade has been both "good and bad" for Colombia, a view shared by many in his country.

Economically, Gomez says, it has been positive, "but our whole society is being corrupted."

Nowhere has the impact of Colombia's booming drug trade been more evident than in the tawdry Caribbean port cities of Barranquilla, Riohacha and Santa Marta, located on the Guajira Peninsula along what was once the fabled Spanish Main. It is here that the marijuana deals are made and where 70 percent of the marijuana reaching the United States comes from, according to the U.S. Drug Enforcement Administration.

The trade has been an important source of new wealth for the remote, impoverished region, providing residents of the Guajira with comforts, economic stability and social mobility that would have been unimaginable a decade ago.

As many as 30,000 small farmers are engaged in growing marijuana in the Guajira, dependent for their livelihoods on what economist Victor Pacheco Laborde calls "blessed grass." The peninsula's new-found prosperity is evident outside of Riohacha's banks, where long lines of once dirt-poor Indian peasants wait in the hot tropical sun to deposit their illicit earnings.

Super-rich Mafiosos and traficantes meanwhile, have built mansions near Barranquilla's once exclusive country club, drive imported Mercedes automobiles, buy protection from local judges, politicians and customs agents and have seen their sons and daughters begin to marry into prominent,, even aristocratic, Colombian families.

But the Guajira, which has always been a center for contraband smuggling, has also experienced an upsurge in drug-related violence and a decrease in police protection that has turned the area into a no man's land. In 1978, at the urging of the United States, President Julio Cesar Turbay ordered 3,500 extra troops into the Guajira as part of an effort to end the marijuana trade and restore a minimum of law and order.

Still, gunfights and bribes are as common today along the coast as are the small tramp freighters, luxury yachts and private airplanes that carry an estimated 20,000 tons of Santa Maria Gold to the United States.

One American who recently visited Riochacha, where the U.S. Embassy in Bogota advises visiting foreigners not to go unescorted, described the town as "Dodge City after sundown."

The peninsula is so violent that guajiro has become synonymous for bandit throughout Colombia. Armed and impetuous, willing to buy or kill for what they want, guajiros are feared even in relatively peaceful Cartagena, a resort where many honest businessmen from the Guajira are moving their families to escape the violence. Last year, there were more than 150 murders in Barranquilla alone.

Meanwhile, Bogota, Medellin and Cali, Colombia's largest cities, are dotted with hundreds of clandestine laboratories that refine coca paste smuggled from Peru and Bolivia into pure cocaine, which is then exported to the United States. Fabulous sums earned by those involved in the processing and selling of coke are used to buy legitimate businesses, reportedly including banks, airlines, and soccer clubs, as well as houses, farms, cars and even works of art.

It is no accident, art dealers here say, that paintings by Botero, Colombia's most famous artist, cost more in Bogota than in New York, largely because newly rich Colombians involved in the drug trade are willing to pay well to acquire status -- and launder their illicit money.

A more common and traditional way of cleansing "black" or "hot" money is buying real estate, generally mansions or luxury apartments. Jorge Miguel Camacho Latorre, one of Bogota's most important builders, said drug money has been a major factor in the capital's building boom and in pushing up real estate prices by 400 to 500 percent since 1975.

"It's very dangerous for economic stability," Camacho Latorre said. "It's also very dangerous because it is creating an immoral climate. People see their friend becoming rich overnight and decide that drugs are a far better way of making money than legitimate work."

Between 1974 and 1978, during the administration of President Alfonso Lopez Michelsen, the government here tended to ignore the drug trade and increasing pressure from the United States to try to stop it. Turbay, on the other hand, took office after a campaign in which he promised to wipe out the country's leftist political guerrillas, Bogota's common criminals and the Guajira's traficantes.

Colombians could no longer ignore the impact of their so-called "under ground economy," both because Turbay had made an issue of it and because it had grown too visible and too important.

Colombia was, and remains, probably the only country in the world where the black market rate for dollars is about 10 percent less than the official rate offered by banks. This is because drug dealers do not want to have to explain where their dollars come from so they prefer to sell them at a cheaper rate on the black market to persons who have legitimate businesses or sources of foreign exchange.

The vast inflow of hard currency from the drug trade has helped boost Colombia's official reserves to a record $4 billion, enough for a whole year's imports. But, because the government must print pesos to purchase the dollars, Colombia last year experienced an inflation rate of 30 percent. Nearly a fifth of that inflation was directly attributable to money earned from cocaine and marijuana exports, according to economists here.

Enrique Santos Calderon, publisher of Bogota's leftist Alternativa magazine and a member of one of Colombia's most socially prominent families, argues that the new drug millionaries have, because of their conspicuous consumption, accentuated the differences between rich and poor in a country where there is already a very inequitable distribution of income, according to a recent World Bank study.

Perhaps the most alarming impact of the new drug money, however, has been on Colombia's politicians and other government bureaucrats. They have been bribed, threatened with violence and even killed by the new drug Mafia, especially in the Guajira where the traficantes are especially strong.

In September, according to U.S. Ambassador Diego C. Asencio, 21 Colombian police agents were offered more than $500,000 dollars each not to carry out one of the largest cocaine raids in Colombian history.

But Asencio and U.S. officials assigned to the Drug Enforcement Administration office in Bogota recognize that as long as drugs such as marijuana and cocaine are socially acceptable and not viewed as a hazard by many Americans, Colombia or some other country will provide them and organized crime interests in the United States will insure that they reach their lucrative market.

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Colombia's 'Gold' Proves Both Blessing and Curse