ECONOMIC EFFECTS OF WAR IN COLOMBIA
Nelson Vanegas

Many countries have periods of war. Even though developed countries are economically stable, they have wars in order to defend their territories, their economies, and their citizens. Obviously, these countries have the chance to win and achieve their goals. But developing countries do not have enough money to overcome their crises. Colombia is one country that has had guerrilla warfare for the last 58 years, private vigilante groups for the last thirty years, and narcotics trade ever since the 1980s and 1990s. These factors have had a disastrous effect on the economy of the nation. The standard of living, price of commodities, and business are some aspects that have been impacted badly by these circumstances.

The first economic effect that war has had on Colombia is the steep decline in the standard of living. Illegal groups, guerrilla, and paramilitary forces control many rural areas where the army has a weak presence or no presence at all. When rural people were obliged to pay periodically a “security tax” to those illegal groups to avoid being killed, many farmers abandoned their farms, which lost their commercial value. A lot of unemployed farm workers moved to big cities, where they have had many difficulties. Those who could not move had to live under dangerous conditions. Meanwhile in the cities, some industrial and landed farmers sent their money out of the country due to the incapacity of the government to protect them. So workers suffered as the unemployment rate increased and the price of labor decreased considerably. Many people who used to live in a rural area now live in the cities with a lower standard of living. In addition, a lot of those people who felt compelled to work with drug cartels to earn money have been jailed or killed or have fled. Even though those illegal groups cannot operate in the cities, they have very much impacted these cities. City people who travel outside for business or leisure are kidnapped or threatened while traveling the highways. As a result, most urban residents remain confined in their cities.  Briefly, the normal way of life has been affected tremendously and there is not a clear way to overcome this.

The second economic effect that the war has had on Colombia is the rising price of basic necessities. The principal impact of this war was a drastic reduction in agricultural production. Therefore, the price of food rose daily. Many farm products are imported for higher prices. The government established “the family basket,” which consists only of basic indispensable products in order to control the price of those products. As a result, there arose a new social class, the absolute poor who could not get “the family basket.” In addition to that, guerrilla forces continuously bombarded the oil pipelines and the infrastructure for electric energy transmission. The cost of these repairs and the loss of oil and energy affected the basic products of the family basket, too. The current president is doing his best to eradicate this war from Colombia and the government has spent a lot of money in this process, which has led to inflation. In brief, all of these circumstances have contributed to the rising price of vital goods.

This war has not only affected the standard of living and the price of basic goods but has had an adverse impact on business also. The land where guerrilla and paramilitary groups operate is completely devalued. Many companies were closed because the farmers who provided these companies abandoned their farms. Many city people became unemployed and had to get money in different ways. One of the most vital businesses in Colombia many years ago was tourism, but the tourist industry declined because this war created a dangerous atmosphere for foreign tourists. Hotels, motels, beaches, recreational parks, and historic places that are located in areas influenced by illegal groups are almost empty. Vehicles that transport people and cargo by road are continuously assaulted by these groups. Therefore, the number of legally established businesses has decreased and informal unlicensed businesses have increased without control. For example, many people have occupied public areas such as sidewalks in order to put up stands to sell all sorts of objects. In short, the war in Colombia has destroyed a large portion of commerce, industry and tourism.

In summary, the standard of living among Colombian people, the cost of basic goods, and the business community have been enormously affected by the persistent war fueled by the narco-guerrilla and paramilitary groups. Although in the last five years the economy has been slowly growing and cities have partly been resolving their social problems, the war continues to cause economic distress. Every attempt to strengthen a legitimate army to end the reign of lawlessness will be very good for the national economy.