How Does Globalization Affect Colombia's Economy

Effect on Colombia’s Economy

During the 1900s, Colombia had a relatively unstable economy, the major contributing factor to this instability being illegal trade. This economic instability affected Colombia and its progress as a country. Many share the belief that Colombia has a declining economy because of the major illegal trafficking that occurs in the country, but other variables are also present, which add to the cause. It is common information that Colombian President Andrés Pastrana believed that certain factors instigated illegal trade, namely globalization. Illegal trade is believed to be Colombia’s fault, but there is also the fact that it is a global industry and would not be spreading as rapidly as it is without globalization. Pastrana believed that globalization can be beneficial, but can also be restricting in as many ways. Drug trafficking, although spurred on by globalization, is still a major dilemma that continued to hurt Colombia’s

economy during the 1900s. Illegal trade negatively affected the Colombian economy during this time period. Through illegal trade, violence, losses of profit and unemployment have become prominent throughout Colombia.
Drug trafficking and illegal trading of arms has lead to major conflicts in Colombia. Due to the rivalries, the profit, and the possible power of drug trafficking, conflicts are not unusual occurrences. Unnecessary bloodshed and conflicts are caused because of the rivalries between the cartels, such as when the Medellin Cartel was finally demolished because of their rival, the Cali Cartel. The Cali cartel was subtler in how they dealt with things, but as interactions with the Medellin cartel grew more violent, it forced the Cali cartel to begin attacking them, and even go as far as to create the PEPES, or People Against Pablo Escobar (PBS 1). The Cali cartel destroyed the Medellin cartel with the way that they supplied information to the Colombian police, and attacked them directly, using violence against violence. Although it may have ended in a positive note for most people, the cartel did not fall without causing damage. Along with drug trafficking, there has been illegal trading of weapons. The protection and security of the narcotics that people would be smuggling would be the main uses of the weapons, but it would not be uncommon for the weapons to be used in other ways. Conflicts would start within and outside of Colombia. The smuggling across countries and borders would lead to conflicts as well, if caught, and even prejudiced confrontations on the basis that Colombians are likely to smuggle an illicit crop. “There is a war going on in Colombia, and it is related to drugs. But drugs are not the driving force behind the conflict, though they do provide a justification for the huge profits earned by U.S. corporations involved in Washington’s drug war” (Morris 1). Conflicts began in many ways. Arguments over what the driving force of the war in Colombia formed, and many could not argue over the logic presented. Conflicts involved in drug trafficking may also relate to losses of profit in Colombia. Colombia has lost much money in the prevention of the drug trade and reparations, or preventions, of conflicts that would spur from that.
Colombia has lost much money for the prevention of illegal trading. Not only has money been lost to prevent the drug trade, but it has also been lost due to products not selling. Seven billion pesos, or $2,592,340 United States dollars, in 2004 were used to attempt to destroy illicit drugs and to prevent their cultivation, or distribution. The restriction of exports in Colombia has also severely hindered the country, along with the popular belief that Colombians may only sell drugs, and are likely to be untrustworthy. "Drug trafficking has carried a tremendous cost for our economy, not only in direct costs, but that of lost opportunities," said Patricia Correa, a private Bogota economic researcher. "We opened our doors to investment two years ago and not one dollar came in” (Cocaine 1). Without exporting necessary goods, unemployment will not decline. Barriers exist in Colombia in trying to expand businesses overseas, but fear of Colombian products proves challenging to whatever industry wishes to expand, not even including transportation. "We spend so much time and money proving to the world that we aren't all drug traffickers that we can't attend to our own economic development," Gustavo Gaviria, a manager of the Gavicafe group of coffee-exporting companies, said in an interview. His company alone shows how much money is wasted because of drug trafficking. To prove that there were not any concealed drugs, they had to change their containers to individual bags, costing a hefty amount. There were also the payments for the security measures against drug smuggling, which proved to cost another $27.4 million (Cocaine 1).
Exporting goods would also help make alternatives to illicit drug trading with the possibilities it would form, if only people could get employment in this field more. The mass amount of money needed for security measures, and proving that there are no concealed drugs, does not allow for as much employment as there possibly could be. Not only are people scared of the consequences of drugs, they are also scared of the possible conflicts that may occur with being involved with the Colombian cartel in any way. “There is no sign that Colombia's reputation as a cocaine center will be changing anytime soon. In January, cartel members threatened to restart the drug war and killed a 65-year-old woman they had held hostage” (Cocaine 1). Although said in 2000, it is an example of how people may be afraid to take part in Colombian products. Investments in Colombia seem to be highly unlikely, due to this very fact and act of violence.
Agriculture in Colombia has damaged its economy, as well.

Legal agriculture fell because globalization taught farmers to grow the best-selling crops, which would continue to be illicit drugs until removals on restrictions of exports occur and a wider variety of crops could be cultivated. “Since the mid-1970s, declines in agriculture and manufacturing have been picked up by services and mining. Mining had not really been important until the late 1980s (Thoumi, “Political Economy” 27). This shows how legal agriculture had been declining for an extended time and how other, less important ways had to rise up to make up for that loss of profit. If legal agriculture could rise up again, then it would massively improve the economy because it would overly make up for the other businesses, including services and mining. Loss in profits, due to agriculture and other businesses, also relates to unemployment, and how less money and the restriction on exports have increased the unemployment rate because of the possible jobs

lost.
Unemployment has steadily increased in Colombia due to the drug trade. During the 1990s, unemployment rose even more, which would be extremely worrying, due to the fact that the 1990s were a decade of strong growth throughout the world. Illegal trade has forced unemployment in Colombia. Exportations in Colombia have been restricted, due to the fear of narcotics being included somewhere in the export. Not only has illegal trade found restrictions in exportations, but it has also caused companies to be afraid of who they are hiring into their businesses, which may lead to a decrease in jobs, due to a lack of trust. Companies, while also being fearful of who they trust, are also run out of business because of the increasing influence of narcotics and the illegal trade.
Expanding business outside of the country is also fairly difficult with the fear of Colombian drugs being involved. Many do not take the chance of investing in Colombian products for the fear of drugs being involved, and of fear of being attacked for supporting said industries. “According to Lee’s research, the differences in the guerrilla groups’ funding sources were due to the ELN’s policy of attacking foreign investment in primary-product extractive industries, which according to its economic development theories represent the root cause of Colombia’s poverty and the reason for the nation’s underdevelopment (Thoumi, “Illegal Drugs” 105).” Not only do these guerrilla groups waste a huge amount of Colombia’s money, but they also attack foreign investors, leading to a further decrease in investment of Colombia. This is a very important fact, due to it having a massive consequence, that being further unemployment in Colombia. This also causes the country itself to develop slowly, if at all. Delving deeper, this shows that guerrilla groups, and drug trafficking itself, present definite problems to the economy with the way that they prevent money from being made from investors and their own costly operations. Narcotics have not only caused massive unemployment in Colombia, but it has also ruined profits and whole companies by inadvertently and directly competing with said companies and running them out of business. Unemployment rates continue to grow higher with more companies forced out of business.
Unemployment, loss of money and profits, and violence are a few of the many factors that plague Colombia, but they are vividly shown and are major contributions to the plague of Colombia. During the 1900s, Colombia was being afflicted with the consequences of illegal trade, which continue to be shown prominently today. Progress in Colombia has been slow and unnoticeable due to the great disadvantages of illegal trade. Inability to spread industry, constant conflicts caused by drug trafficking, by either users or cartels, and inability to stop the increase in unemployment are steadily rising in number. Illegal trade in Colombia has devastated the country and its ability to progress. Colombia has been unable to progress because of all of the aftereffects caused by illegal trade and will continue to stay at a plateau, until illegal trade is lessened, or exterminated.