September 20, 2000

Globalization: Free Trade and the Drug Trade

A speech by Colombian President Andrés Pastrana at the State of the World Forum in New York on September 6, 2000.

Frequently we hear from both the corporate world and academia that globalization is good and that it's irreversible. But things are not as simple as that. We must acknowledge that today in the developing world, globalization is confronted by many political challenges. And I think globalization is confronted by challenges precisely because it has also posed many challenges in our nations.

Just look at the newspapers and you will find protests, not only during the world summits, like Seattle and the meetings of the IMF and the World Bank this past spring, but also in the streets of our cities (see, Colombians Protest IMF-imposed Austerity Measures). In our own Latin American context, we must pay special attention to the implications of globalization for our workers, our environment and our democratic institutions.

Much has been said and written about globalization. I believe countries that have opened their borders to trade and capital flows from abroad are growing faster, and that more access to information from the rest of the world has reinforced democratic principles in our nations. But it is also true to state that globalization has not benefited everyone. That not all groups in our societies are taking advantage of the opportunities brought about by globalization and this is an area where we need to work hard.

We need to assure that the benefits of global integration are well distributed. If they just go to the few who have access to higher education or to those who have access to capital then globalization is threatened and no matter what its long-term benefits are, it will face serious political obstacles.

Rather than praising globalization rhetorically, we must help shape globalization in a way that touches everyone. We must make each and every citizen a part of it. We must make sure that the poor are not hurt by globalization, but on the contrary, enjoy the benefits that can be derived from a more integrated world. And this is not an easy task, because it implies that while we discuss free trade and economic integration in world summits, we must at the same time generate the conditions in order to improve access to education, nutrition and the health of our people. If we fail to do this, then globalization alone will not solve our problems.

Colombia offers the best example of how uncontrolled globalization becomes a curse rather than a blessing. Think for a minute about the nature of narcotrafficking. The illicit drug business is by definition a global activity. Colombia stands at one end of a complex chain, which involves cultivation, processing, trade of precursor chemicals, distribution, money laundering, and of course consumption.

Drug trafficking is a part of globalization, but clearly not the type of globalization that we want. Drug trafficking destroys the lives of consumers, destroys the social fabric, destroys the natural resources in the producing countries, and destroys the institutions upon which democracies and democratic principles are edified. Each year in the United States alone, drug abuse is linked to 52,000 deaths and costs nearly $110 billion in healthcare, accidents and loss of productivity.

I understand that this is an extreme example that illustrates why we need to shape globalization, but there are good reasons for shaping globalization in less extreme situations. After a decade of reforms in Latin America, many of them involving free trade and capital flows, economic growth is still below the postwar average and income inequality is the highest in the world. For me, this means that we need to assure universal access to secondary education, generate employment opportunities--especially for the poor--and provide access to information for individuals and businesses. If we fail to do this, globalization will not deliver better living conditions for our people and will become a threat to many.

Let me share with you my own personal approach to globalization. I have focused my attention on solving the problems caused by the type of globalization that we do not want, namely drug trafficking, while promoting the globalization that improves our living conditions by providing stable jobs. For this I have invoked the principle of co-responsibility between producer and consumer nations, asking for their support in a comprehensive and integral strategy, which addresses not only the drug trafficking problem, but also the broader rule of law and socio-economic challenges Colombia faces. These strategies are embodied in what we have called Plan Colombia (see, Plan Colombia: A Closer Look).

The main goal of my administration is to get Colombia back on the track of prosperity, growth and social development. It is essential to deactivate the structural causes of violence by moving forward in several areas without delay. These include the political negotiations with the insurgents in order to find a solution to the armed conflict, a social and economic recovery package aimed at generating education and employment opportunities for the poor, a strengthening of the fight against drug trafficking activities, and the development of social institutions. This plan has already received ample international support, both economically and politically.

The Plan places special emphasis on the policies that are necessary to recover the investment climate in order to generate employment opportunities and improved living conditions in my country. We're putting the economy back on track by implementing a serious and determined fiscal adjustment that will bring down the deficit to manageable and sustainable levels.

This has meant tough and unpopular decisions that certainly have a negative short-run impact in the polls, but they are beginning to pay off. In fact, the Colombian economy is growing again as a result of the stabilization program that was implemented during the first two years of my administration. The manufacturing sector grew by more than nine percent during the first semester of this year, while the value of non-traditional exports increased by over 12 percent.

I am firmly convinced that without macro-economic stability, globalization becomes a nightmare. When globalization takes place in countries that experience large fiscal and external deficits, where the exchange rates are over-valued and interest rates skyrocket, clearly the end result is a surge in cheap imports and a loss of local jobs. But if globalization takes place in a balanced economy, with a competitive exchange rate and low interest rates, the end result is investment opportunities, export growth and job creation.

I am a pragmatist. I do not think endless discussions on whether globalization is good or bad are going to take us very far. The thing we ought to discuss is, under what conditions globalization yields positive results, and we as policy makers have to generate those conditions. Let me also say that macro-economic stability alone is not sufficient. We have to meet other criteria if we want to achieve higher economic growth.

I think that our products still face many tariff and non-tariff barriers in the developed world, in fact, I often say to fellow heads of state all over the world that the best way to help Colombia is by removing trade barriers that restrict our exports. By facilitating our exports we will succeed in developing alternatives to illicit crops. More exports also mean less unemployment, which will help in finding a solution to the internal conflict.

This brings me to the political negotiations of the internal conflict, which is another building block of our plan. I have personally led this process--which has involved risks and costs with the FARC, the largest insurgent group--to establish a demilitarized zone to facilitate the negotiations (see, An Interview with the FARC). We have agreed to a 12 point agenda and a timetable for the negotiations. We have established mechanisms that make possible the participation of all Colombians with complete proposals. But Colombians now expect something more from the FARC than gestures: we want deeds, especially a cease-fire and cessation of hostilities.

With the ELN, we have proposed a peace-zone, a space to initiate dialogue and negotiations for nine months. The ELN has agreed to international and national monitoring. A five nation commission--Norway, Switzerland, Spain, Cuba and France--will talk to the people in their area of influence that are against this peace-zone. I hope that we can find a solution and start negotiations with them soon (see, An Interview with the ELN).We must not forget that the goal is to find a peace agreement that will demobilize and re-incorporate into society the armed actors. This requires the will to reform and change based on a wide social consensus.

It is no secret that narcotrafficking has intensified violence in my country. If we want to edify peace, we have to fight these illegal activities. But we cannot do that alone. I have proposed an alliance between producer and consumer nations based on the principles of co-responsibility and equity. This means that consumer countries have to do more to control their citizens' appetite for drugs, to control money laundering, to control the sale of chemical precursors, and of course to halt the illegal arms trade. This is a global problem that demands a global solution. Drug trafficking is not an isolated phenomenon.

Colombia, as a producing country, requires help in order to stop the growing of illicit crops that are destroying our biodiversity. The world has to understand that drug trafficking is not independent from all the other problems that Colombia faces. But peace and the eradication of narcotrafficking activities will not become a reality unless we strengthen our institutions, especially justice. We must also continue implementing alternative development projects that not only generate employment opportunities away from illicit crops, but also provide health, education and infrastructure to those that will lose their illegal livelihoods (see, The Plight of the Peasant Coca Grower).

In sum, I am convinced that the first step to reaching a successful globalization is the globalization of solidarity. We require programs for alternative development in Colombia's rural areas and more accessibility for our legal businesses so that we can successfully combat the illegal ones. This means that in addition to support for our counter-drug effort, we need trade preferences.

As I have stated repeatedly, Colombia could join the United States, Mexico and Canada in the North American Free Trade Agreement. Or alternatively, Colombia and the U.S. could enter into a special trade relationship. Meanwhile, trade parity with the countries that benefit from the Caribbean Basin Initiative is essential for our exports. You cannot overstate the importance of export incentives for the people of Colombia. I recently told President Clinton, "Don't give us a single dollar, instead give us a chance to sell our own products." I have no doubt that the best way to help Colombia is to ask our trade partners for improved access for all products. When it comes to job creation, there is no substitute for export growth.

And let me conclude by saying that the road ahead is not free of risk and difficulties, but the map is clear and focused. We are confident that the economic program, combined with international support for Plan Colombia, will lay the basis for sustained growth. In that way, together we can create prosperity with justice, paving the way for a lasting peace.

This article originally appeared in Colombia Report, an online journal that was published by the Information Network of the Americas (INOTA).

Back to Top . Comments

Copyright © 2003 Colombia Journal. All rights reserved.