Colombians are looking forward to the end of internal war conflict, we hope that Cuba meetings come with proper ending, the Peace signature. The cost of this war is high: direct deaths (fighters from all sides and civil into the conflict) are 50.110 since 1970 and indirect deaths are 708,917 since 1970 (it can be called violence virus), they come from annual homicide rate. Moreover, pure cocaine production increased to reach 345 tonnes in 2011 and its profits goes to terrorism. There are other social cost such as lack of fair democratic participation (where all sector must be included) to get a proper society, without this scenario government institutions and private sector can abuse of citizens through lack of fair income distribution, lack of eduction and discrimination due to points of view as one can see today. Many people ask for the economic benefits from ending this conflict, this values are calculated through econometric time series model VEC and they are an additional increase of 0.8% in GDP growth rate after a year of ending conflict, an additional decline of unemployment rate in 3.5% after two years of ending conflict and declining trend in cocaine production. However, unemployment and cocaine production are issues that require hard work to get a success ending of conflict, if there are proper programs to avoid demobilized guerrillas unemployment, process can be called as successful. Cocaine production can be taken as illegal work place for demobilized guerrillas, this commodity must be dealt through United Nation department Legal Monopoly Production Around the World and Controlled Consumption (UN-LMPCOCA), it can not be management by local governments due to corruption, international organizations must manage cocaine production.
Author: Humberto Bernal,
Economist,
e-mail: zhumber@gmail.com
Twitter: Humberto_Bernal
The internal armed conflict in Colombia has a long history, it can be said this political conflict started since her independence in 1811-1819 and it has taken power through international issues such as IWW, IIWW, Could War and local issues such as many politician deaths and cocaine production. One can say that the internal conflict has deep political issues concerned with unfair income distribution and discrimination. This problem could has be solved many year ago but cocaine production was taken by guerrillas and other illegal armed groups to support their terrorist attacks. In guerrillas FARC case the number of fighters rose from 900 in 1970 to 21,995 in 2002 and 8,500 in 2012 as figure 1 shows. The number of guerrillas FARC come down after 2002 when Colombia got support from international community due to Human Rights violations concerned with many deaths.
Figure 1. Guerrillas FARC 1970-2012
(number of fighters)
Source: Otero, Diego. 2007, 2010, Department of Defense Colombia 2013.
This note shows the cost of Colombian internal war and the potential benefits due to successful pace process, the period taken into account starts in 1970 when guerrilla began to take power to face legal Colombian Armer Forces, the maximum armed conflict came at the beginning of XXI century when guerrillas got lot of money resources from cocaine trade but it came down through high local defense resources and international support but the cost was many deaths of people with low education.
Cost of the internal war
Colombia has been one of most violent countries in the World, her homicide rate came from 10.9 per hundred thousand of inhabitants to 89.0 in 1994 and 35.9 in 2011. Total deaths since 1970 rose to 708,917 cases where those from the war conflict were 50,110 as figure 2 shows, this deaths means 7.1% of total deaths since 1970. However, deaths due to no direct intervention in conflict can be taken as indirect deaths due to society grew up watching violet pictures and bloody news, moreover the unfair income distribution and poor education bring violent scenarios, there is low cover in secondary education and it is discriminatory in tertiary education, in the last case students can be taken out from programs due to their points of view. There are tertiary education programs that work on how to pull out student instead to how to keep all student to reach a better society. From my point of view, Colombia must work in tertiary education reform where any type student (high grade student and low grade students) must be the target as an input to fair society.
Figure 2. Conflict deaths 1970-2012
(annual number of cops, militaries, guerrillas, paramilitaries and civil in the conflict)
Source: Otero, Diego. 2007, 2010, Department of Defense Colombia 2013.
Kidnappings and boom attacks are costs of this irrational war, in the first case people kidnapped rose from 49 annual cases in 1970 to 3,706 annual cases in 2000 and 305 anual cases in 2012, the total number of people kidnapped are 50,345 since 1970 (some of them are dead, other were released due to payment, political agreements or Armed Forces intervention). The booms attack are long listed, in crude pipeline attacks cases come from 11 per year in 1987 to 151 per year in 2012.
The cocaine production is a source to guerrillas economic support as one can see in figure 2 and 3, as cocaine production increases, then the number of guerrillas FARC rises also. The volume of pure cocaine rose from 1 annual metric tonne in 1970 to 695 annual tonnes in 2000 and 345 annual tonnes in 2011.
Figure 3. Pure cocaine annual production in Colombia
1970-2011
(annual tonnes)
Benefits from the end of Colombian Conflict
These days many people ask what economic benefits come from the end of conflict, of course we know that the first benefit is the stop of too many deaths. The benefits are evaluated taking into account the Gross Domestic Product (GDP) real growth, unemployment rate and cocaine production decline.
Colombia shows a long run GDP growth of 4.0%, she is a developing country that grows due to primary products production. According to time series model called VEC, the end of the conflict brings an additional increasing GDP growth rate in 0.8% in the next five years after conflict finishes and 0.6% after this five years as figure 4 shows. Therefore, if the forecast of economic growth in 2014 is 4.0%, one can expect that this growth will face an increase to reach 4.8% due to the end of the conflict. The end of the conflict brings a permanent positive effect in GDP growth, it means this additional growth does not disappears as time goes.
Figure 4. increasing in GDP growth due to end of conflict 2014-2042
(annual variation %)
Source: Own calculations Stata 12.1.
However this increase in economic growth is subject to real labor opportunities to demobilized guerrillas. The real opportunities must come with fair salary. According to this econometric model, the unemployment rate can increase in 1.9% after the end of the conflict but through proper government and private sector programs, the unemployment rate can come down in 3.5% after the end as figure 5 shows, it means a unemployment rate of 7.0% due to ending conflict. If the conflict comes to her end at the end of 2013, unemployment can goes down in 2016 and after 2022 the unemployment rate variation due to end of conflict starts to disappears. Figure 5 shows unemployment rate variation due to the end of conflict, the movement highlights the hard work of colombia society must do in labor market to get success post ending conflict.
Figure 5. decreasing in unemployment rate due to end of conflict 2014-2042
(annual variation %)
Source: Own calculations Stata 12.1.
The last benefit is the reduction of cocaine production. This econometric model, after proper statistical proves, shows that cocaine production can decline in about 1.4% the year after ending conflict and a declined trend for years after as figure 6 shows. Cocaine production will be difficult to eradicate, and it can bring a new issue concerned to new cocaine cartels and violence again. From my point of view a proper legalization of cocaine production through monopoly management according to international agency linked with United Nations (UN) can solve this costly problem to colombians.
Figure 6. Decreasing in cocaine production due to end of conflict 2014-2042
(annual variation %)
Source: Own calculations Stata 12.1.
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