COLOMBIA ADDS ITS DRUG TRADE TO ECONOMIC DATA

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.

By including revenues from narcotics in the 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.

President Clinton's anti-drug chief, Barry McCaffrey, earlier this
month called the move "a political error."

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."

Colombian officials, 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 the midst of talks with the IMF. Without the
IMF's bill of good health, it would be difficult for Colombia to
borrow money from international sources.

The recalculation could add as much as 1 percent to the value of the
deteriorating Colombian economy, which has a 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.

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.