COLOMBIA ADJUSTS ECONOMIC FIGURES TO INCLUDE ITS DRUG CROPS

BOGOTA, Colombia -- Taking a step that is generating heated criticism in
Washington, 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, which by obviously imprecise assessments could amount to between one
one-quarter and one-third of Colombia's legal exports, or as much as $4
billion a year. By including revenues from narcotics in 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.

Gen. Barry McCaffrey, President Clinton's antidrug chief, earlier this month
called the move "a political error." In a telephone interview from
Washington, 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."

Officials here, 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 talks with the IMF, without whose bill of good health it
would be difficult for Colombia to borrow money from international capital
markets. The official recalculation could add as much as 1 percent to the
value of the deteriorating Colombian economy, which has 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. For the moment, the new accounting system does not include the
much larger sums of money earned from the processing or trafficking of
cocaine, marijuana and heroin, only the growing of the raw materials.

Rene Verswyvel Villamizar, director of the National Statistical
Administrative Department, said that cultivation "is as far as we can go
with certainty." 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. The United Nations estimates that Colombia
exports about 772 tons of cocaine a year, growing and processing roughly
half the world supply. "We are realists," Verswyvel said. "We have to
recognize that narcotics and guerrillas exist, because they are a reality
that we cannot hide. We have to measure these things as they are, not as we
would like them to be."