TO BEAT COLOMBIA'S GUERRILLAS, LEGALIZE DRUGS IN THE US

Several months ago I went to Bogota to speak on economic issues. I had nice
discussions about the ongoing recession, fiscal imbalances, and the
independent central bank's approach to reducing inflation and allowing the
exchange rate to float.

Yet it was clear then that standard economic issues are sideshows in
Colombia. The country's future is wrapped up in issues of guerrilla
warfare, drug trafficking, the political will to fight terrorism, and the
efficiency of the military. It is remarkable that the democratically
elected president, Andres Pastrana, effectively turned over the southern
part of his country to a guerrilla group, the FARC, to run the region as it
pleases, mostly for the coca business. Pastrana would like to make peace
with the guerrillas, but the FARC has little reason to negotiate with a
weak, compliant government.

In response to the disintegration of legal authority and the expansion of
the drug trade in Colombia, the U.S. Congress is considering a three-year
aid package of $1.6 billion to support Pastrana's ''Plan Colombia.'' One
reason that the Administration is supporting this plan is that Pastrana is
a friend of democracy and human rights. In fact, Colombia has long stood
out in Latin America for its democratic traditions. Unfortunately, however,
Colombia may now have too much democracy, with its constrained central
authority and poorly functioning army, to combat effectively the terrorist
threat. The country would probably be better off with a figure like
Peruvian President Alberto Fujimori who would be willing, temporarily, to
suspend rights and democratic practices to defeat the guerrillas and
reimpose law and order.

NEIGHBORING CRACKDOWNS.

If the aid package is approved, Americans will end up effectively
supporting both sides of Colombia's civil war. U.S. taxpayers will help
finance the Colombian government's fight against the guerrillas. But
American drug consumers will continue to finance the guerrillas' war with
Bogota.

Instead of Washington providing money to the Colombian government, we
should begin thinking of curtailing the cash that American consumers send
to the other side--the guerrillas. This could be accomplished, virtually
overnight, by legalizing drugs in the U.S. People would still use drugs and
pay for them (at lower prices), but at least the industry would no longer
be connected to criminal activity.

To date, the focus of U.S. drug policy has been the curtailment of supply.
Barry McCaffrey, head of the White House drug office, argues that Plan
Colombia should be supported to achieve the antidrug successes of Peru and
Bolivia: ''Without additional U.S. assistance, Colombia is unlikely to
experience the dramatic progress in the drug fight experienced by its
Andean neighbors.'' Although Colombia has long been a major player in
distribution, it became the world's largest grower of coca only recently,
precisely because these activities became more difficult in the neighboring
countries. There is no evidence that the antidrug successes in Peru and
Bolivia curtailed the region's overall supply of drugs.

REGULATE AND TAX.

Colombia has also experienced victories against the drug trade by wiping
out the distribution cartels in Medelln and Cali. But the response was a
shift of the network to other groups and places. If Colombia experiences
more such victories, then the drug business may return to its neighboring
countries, including fresh possibilities in Ecuador, or to other parts of
the world. The fundamental problem would continue to be the high
willingness to pay for drugs by users in the U.S. and other rich countries.
This demand would be serviced at some price, somewhere in the world.

The U.S. does not have schemes like Plan Colombia for countries that
produce tobacco or alcohol. The important differences between
tobacco/alcohol and cocaine/marijuana/heroin are not that one group of
drugs is more dangerous than the other, but rather that the former is legal
and the latter illegal.

We ought to be regulating and taxing the presently illicit drugs as we do
tobacco and alcohol. Doing so would not only raise tax revenues but would
also save enormous resources presently expended on police and prisons. The
freed-up money could be used, in part, to fund health programs for drug
users and education programs designed to diminish the demand for drugs.

Instead, we seem to be moving on an inexorable path toward eventually
managing tobacco the way that we presently treat illegal drugs. Prohibition
should have taught us something. Our drug policy is a mess, seriously in
need of a basic reorientation.