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AEI to Colombia

"Can’t Give You Anything But Guns, Baby"

by JACQUES KINAU

Mark Falcoff’s February 23, 2004 American Enterprise Institute post, "Facing up to the Conflict in Colombia" broaches an important topic. But Falcoff does not face up to reality as promised. Falcoff correctly notes that what started as a civil conflict in Colombia has degraded into a very dirty war replete with kidnappings, terrorism, and paramilitary executions.

However, in crediting the leading rebel group with trafficking financed success, with little popular support, he misses two underlying factors that must be confronted.

The first is that the FARC guerrilla simply couldn’t function without the tacit complicity of the US.

FARC participates in the trafficking a portion of the estimated 580 tons of cocaine sold annually in the United States. This is laundered from US dollars back into Colombian pesos to finance guerilla payrolls, arms and explosives purchases and operations. The FARC, and other Colombian groups, have come to rely almost completely on the extremely lax enforcement climate against money laundering in the US.

The FARC has depended upon companies like General Electric to facilitate financing the bad things in life, such as spectacular attacks against soft civilian targets, by GE’s blind eye toward US manufactures based exporting and refusing to put an end to cash purchases.

For years a key money laundering strategy has been the cash purchase and exportation of manufactured goods from the United States, particularly south Florida, to sell at below market prices in Colombia’s vast black market, known as "San Andresitos". This old and tired trick still brings in an estimated $5 billion a year to Colombia. Few American executives or American law enforcement officials dare confront it.

Second, although Colombia’s population isn’t generally supportive of the guerrilla, government and business leaders enjoy equal, or at times even less, public confidence. Although many officials and businesspeople are honest, the spectacular incidences of graft, nepotism, and white collar robbery, particularly of pension funds, and the general misallocation of tax revenue has sullied reputations and trust. Confidence inspiring infrastructure for effective tax collection and revenue distribution has all but broken down.

Falcoff decries the role of NGOs, the Pastrana "land for peace" effort, and urges more military assistance to put down the guerilla:

"The present situation is also different in its international dimensions. Both figuratively and geographically, Colombia is a crossing point for drugs, terrorism, gun-running, and international criminality."

The most obvious choke point to strangle all of these activities is their key financial juncture: the US. Yet profits from the 13 fold wholesale to retail distribution markup of narcotics in the US market as well as revenue from higher manufactures exports, and increasingly financial services sales (insurance contracts) to launder the proceeds of trafficking are fat, and US resistance is high.

What Colombia needs least is a simplistic AEI inspired solution that demonizes only one guilty party, provides lucrative military aid, and hopes for some sort of defining "win". It hasn’t worked for Israel, isn’t working for Iraq, and won’t work in Colombia. The US has already provided $3 billion in Korean War era ammo that US forces couldn’t legally "lock and load", as well as Vietnam vintage trucks and other useless military aid in the Plan Colombia boondoggle. This helped relatively few Colombian soldiers but padded many US defense contractor pockets by liquidating their worthless stock.

The most effective approach to help Colombia is the most painful for the US: clamp down on money laundering facilitated through the US financial system and underground economy.

Only then will the US be able to claim a productive role in curing what ails Colombia. Other US and even NGO aid should be lent helping Colombian president Uribe in his new, massive project to collect unpaid taxes, an endeavor sure to bring needed revenue to both urban and rural coffers.

Unfortunately, this is yet another area largely outside AEI’s "expertise".

JACQUES KINAU writes for Academics for Justice, and San Francisco IndyMedia.

He can be reached at: JKinau@stinktank.org