Pubdate: Sun, June 27, 1999 Source: New York Times (NY) Copyright: 1999 The New York Times Company Contact: http://www.nytimes.com/ Forum: http://www10.nytimes.com/comment/ Author: Larry Rohter COLOMBIA ADJUSTS ECONOMIC FIGURES TO INCLUDE ITS DRUG CROPS BOGOTA, Colombia -- Taking a step that is generating heated criticism in Washington, the Colombian government has begun to include income earned from growing illegal drugs in the way it calculates the size of the nation's economy. The move is controversial but necessary, Colombian officials say, to take account of the increasingly uncontrollable reality of the drug trade, which by obviously imprecise assessments could amount to between one one-quarter and one-third of Colombia's legal exports, or as much as $4 billion a year. By including revenues from narcotics in gross domestic product, Colombian government economists say they hope to obtain a more accurate measure of all economic activity in the country. Excluding drug crops, they maintain, leads to distortions that hamper the government's ability to effectively combat drug production and trafficking. "This is a purely technical exercise, not a political measure," said Tomas Gonzalez Estrada, the chief economic adviser to President Andres Pastrana, who has stepped up the war against drugs here since taking office last August. But some in Washington, particularly congressional Republicans who have criticized other Pastrana policies, have attacked the decision as a capitulation to drug dealers. Gen. Barry McCaffrey, President Clinton's antidrug chief, earlier this month called the move "a political error." In a telephone interview from Washington, Robert Weiner, a spokesman for the National Office of Drug Control Policy, said, "They say it in no way means an acceptance of or the legalization of drugs, but they have not fully explained that position or gotten that message out." Officials here, though, respond that they are merely complying with guidelines set by the International Monetary Fund and World Bank for potential borrowers, and that other countries, such as Bolivia, use the same system. Instructions prepared by the IMF, World Bank and other international lenders clearly state that "transactions involving the sale or purchase of illegal goods and services must be recorded." The Colombian economy is suffering its worst recession in decades, and the government is in talks with the IMF, without whose bill of good health it would be difficult for Colombia to borrow money from international capital markets. The official recalculation could add as much as 1 percent to the value of the deteriorating Colombian economy, which has gross national product of nearly $80 billion a year. But Gonzalez emphasized that "we are not doing this to improve the performance of the Colombian economy," but rather to "have more effective tools" to design strategies such as crop substitution. For the moment, the new accounting system does not include the much larger sums of money earned from the processing or trafficking of cocaine, marijuana and heroin, only the growing of the raw materials. Rene Verswyvel Villamizar, director of the National Statistical Administrative Department, said that cultivation "is as far as we can go with certainty." According to the new statistics, drug crops added about 854 billion pesos to the Colombian economy in 1994, or just over $1 billion, calculated at the average exchange rate for that year. In 1995, the only other year for which figures are available, the estimate slipped because of market conditions in the United States to $762 million at the time. Recalculated figures for later years, which officials said may be ready by the end of 1999, are likely to be significantly higher. Official U.S. estimates indicate that the amount of land devoted to cultivation of drug crops rose by more than one-quarter percent last year, despite eradication efforts. The United Nations estimates that Colombia exports about 772 tons of cocaine a year, growing and processing roughly half the world supply. "We are realists," Verswyvel said. "We have to recognize that narcotics and guerrillas exist, because they are a reality that we cannot hide. We have to measure these things as they are, not as we would like them to be." - --- MAP posted-by: Jo-D