Die Laughing: >Colombia to use drug crops as economic indicator
By Javier Mozzo
BOGOTA, June 8 (Reuters) - Colombia, the world's leading producer of cocaine, has decided to include income from illegal drugs in official calculations of its gross domestic product, authorities said on Tuesday.
Finance Minister Juan Camilo Restrepo said the move is part of a new formula for estimating GDP adopted by the state-run National Statistics Department (DANE).
''What the DANE has done is to incorporate estimates about how much is generated by illicit crops in terms of income or payments,'' Restrepo said.
''It doesn't mean they're being validated or given some kind of blessing,'' he said. However, the fact that they are illegal ''doesn't lessen them in terms of being part of economic activity that is taking place.''
Restrepo said Colombia, currently mired in its worst recession in more than half a century, was likely to see its GDP rise ''a little bit'' going forward, since the exclusion of drug income meant GDP was ''underestimated'' in the past.
Jairo Urdaneta, head of DANE's national accounting office, said reported economic growth could increase by a full percentage point once the new formula is applied.
''The people who live off this were spending money but they had no (official) income,'' Urdaneta said, referring to the many peasants who farm land under drug cultivation. ''These people do, in fact, have an income and if no estimates are made about where it comes from you create a lot of imbalances,'' he said.
Based on the total value of goods and services produced by Colombia in 1994, which DANE uses as its benchmark, Urdaneta said annual income from drug plantations would be valued at about $516 million at the current peso/dollar exchange rate.
He stressed there were no plans to include the value of processed heroin and cocaine -- which private analysts estimate at up to $7 billion a year -- in GDP measurements.
Colombia supplies roughly 80 percent of the world's cocaine and has become a leading source of the high-grade heroin sold on the east coast of the United States.
U.S. intelligence figures show that land under drug cultivation in Colombia rose by 26 percent in 1998, despite an ambitious U.S.-backed drug crop eradication program. The program focuses on aerial spraying of plantations of marijuana, opium poppies and coca leaf -- the raw material for cocaine -- with herbicides.
The surge in drug cultivation was linked by White House drug czar Barry McCaffrey to growing political instability in Colombia as Marxist rebels and right-wing paramilitary gangs, both financed by drug money, kept government forces at bay in heavy production areas.
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