1. —
Early last week I was in a hotel room in Bogotá, Colombia, writing my monthly Econlib column when a buzz came through from a local newsroom.

I had arrived in town a few days before to report on an impending, serious political crisis brought about by a dispute between Colombian president Alvaro Uribe and the Supreme Court.

To put it simply, the Supreme Court’s sentence implied that the 2006 presidential election that resulted in Mr. Uribe’s second term was illegal.

President Uribe adamantly rejected the sentence and called a referendum to ask the people directly if he could stay in power until his second term ends in 2010. The deadlock threatened to plunge the country into political turmoil with unpredictable consequences. I was supposed to produce a “think piece” on the matter by Tuesday, which I did.

Shortly after noon, on Wednesday, I finally sat down to write my monthly column when I received news that 15 hostages, including three U.S. defence contractors, held for years by the Revolutionary Armed Forces of Colombia, or FARC, the infamous drug-trafficking guerrilla, branded a terrorist organization by the United States and European Union, had been rescued by a successful army operation. Most eminent among the hostages was the 46-year-old former presidential candidate Ingrid Betancourt.

Together with another 40 or so high-profile hostages, and more than 700 civilians, soldiers and police officers, Betancourt had been held by insurgents for more than six years years. FARC had sought all along to exchange these hostages for 500 jailed rebels.

In a daring operation, Colombian army double agents had infiltrated the FARC’s unit responsible for guarding the hostages, the guerrillas’ most valuable bargaining chips. The infiltrators gained the trust of a commander known as “César” and duped him into putting the hostages aboard a helicopter.

The apparent reason the infiltrators gave “César” was that the new FARC commander, Alfonso Cano, wanted to have a meeting with the hostages to inform them about the terms he had already agreed with the Colombian government prior to their imminent liberation. They also told “César” that an international mission was coming by helicopter to pick up the hostages and take them to Alfonso Cano. To dissipate his suspicions, they said he and another FARC rebel were expected to accompany them to meet Cano. The whole affair was a meticulously planned ruse.

Only minutes after the helicopter took off with the hostages and two FARC rebels, commandos subdued them without firing a shot.

“What are you doing in that hotel room?”, asked the Colombian colleague who broke the news to me.

“I’m writing an article on guano.”

“What?” he said in total disbelief.

“Peruvian guano, to be exact,” I said.

“A special army unit snatches FARC’s most precious hostages away from their jungle jail and you are writing a piece on bird’s dung?” he abrasively asked again.

“You can’t imagine what a commodity boom can do to bird’s dung,” I said, still in a daze. “You see, guano is chemical-free. The oil prices hike have doubled the price of synthetic fertilizers to more than $600 a ton. Guano in Peru sells for about $250 a ton. When exported to France, Israel and the United States, it fetches $500 a ton”.

“You know what, mi amigo? Guano has been on those Peruvian islands for centuries now. It will be there when we all come back from the press conference the defense minister and Miss Betancourt will offer at the Catam air base. It’s a long a ride, so make up your mind. Guano can wait.”

I thought he was right and so did Econlib’s editor, God bless her. I put apart my unfinished piece on guano and tackled another kind of assignment: commenting on the hardest blow that ever hit FARC in economic terms.

2. —

Ten years ago, FARC had roughly 17,000 heavily armed combatants on war footing. As of today, FARC’s ranks are believed to be as few as 8.000, partly because of huge incentives offered to get rebel fighters to desert.

Over the last year, several top leaders have been killed, captured or surrendered while FARC peaked its highest desertion rates in 40 years. More than 3000 mid-level comandantes have defected during the last six months. This rate is far removed from the seasonal FARC’s ups and downs in recruitment figures.1

Colombian armed forces have in all appearance cracked FARC’s communications system. This has enabled the government’s men to track the guerillas’ movements by monitoring cell phone and satellite phone usage.

To attain their goals, the Colombian army have relied on U.S. intelligence technology funded by the “Plan Colombia”, Uribe’s U.S.-backed security campaign. So far, the United States has given Colombia $5.5 billion in anti-terrorist aid over the last seven years. FARC’s soaring desertion rates are closely correlated with the security campaign’s incentives.

Here is the big paradox: While FARC’s terrorist activity is ostensibly in a steep downturn, their partners—the coca cartels—are living their best times.

Reduced participation in FARC has not resulted in reduced drug trafficking. Many drug traffickers have substituted other related opportunities in Colombia. Thus, it is fair to say that U.S. tax-payers are at present paying for job-training programs that would allow former drug-trafficking guerrillas who are not wanted by criminal prosecutors to “reinsert” themselves into Colombian society. The “reinsertion” programs have proved inconsequential when it comes to arresting cocaine export into the United States.

Not only have drug traffickers reinserted themselves within Columbia, but they have moved into neighboring Venezuela. Let’s look at the economic incentives and recent history.

With an area of more 424.7 square miles and a population of 45.6 million, Colombia is currently the major coca leaf producing country in the world. A recent United Nations Office on Drug and Crime (UNODC) report affirms that in 2006 Colombia produced 62% of the world’s cocaine supply.2 Coffee and other agricultural products crops represent 12 percent of a $122 million GDP. In the early 1990s, cocaine already accounted for 5 to 6 per cent of the Colombian GDP.

FARC first became involved in drug trafficking in the 1980s by selling “protection” to the Colombian cartels—the largest coca growers in the world, roughly representing half of the global coca bush.

Anticipating FARC’s military setbacks in face of “Plan Colombia,” the cartels have been moving their labs to neighboring Venezuela over the last five years and managed to buy protection from the Venezuelan military and a host of corrupt officials.

In so doing, Venezuela, with its large expanses of uninhabited land and soaring corruption levels has gradually morphed from a “transit country” into a full-fledged cocaine exporter.

For more on foreign aid and the incentives facing dictators, listen to Bruce Bueno de Mesquita on Democracies and Dictatorships, an EconTalk podcast.

With a staunch anti-American government in place and its potential as a coca-growing country, there is no “Plan Venezuela” in sight and more than 10 million users are still in the United States and Europe.

As to the political deadlock of unpredictable consequences, public elation at a successful rescue mission sent the imminent serious crisis ignited by the Supreme Court sentence into public oblivion.


For more on FARC’s seasonal recruitement see Ibsen Martínez’s Greed, Grievance and Rainforest. Library of Economics and Liberty, June 2, 2008.

See 2007 World Drug Report. UN Office on Drugs and Crime.


*Ibsen Martinez is a columnist, journalist, and award-winning playwright from Caracas, Venezuela. His writings have appeared in El Nuevo Herald, Miami, Letras Libres, Madrid, and El Pais in Madrid. Since 1995, he has written a weekly column for El Nacional.

For more articles by Ibsen Martinez, see the Archive.