Colombia's Samper blames unemployment on drug war

BOGOTA, April 17 (Reuter) President Ernesto Samper said on Thursday that
Colombia's soaring unemployment, now riding at 12.7 percent in cities, was
one of the unfortunate side effects of its fight against the drug trade.

``The fight we're waging against narcotics trafficking ... is having a
destimulating effect on the creation of jobs,'' Samper said.

``I think the country understands that we have to pay this price and that, if
we temporarily have more unemployment, it's fully justified,'' he added.

The National Statistics Department reported on Wednesday that Colombia's
urban unemployment rate had hit a nineyear high of 12.7 percent in the first
quarter, up 2.5 percent from the same period last year.

Cali and Medellin, the cities that gave their names to two of Colombia's most
notorious drug cartels, had the highest rates of unemployment at 17.4 and
16.4 percent, respectively.

Samper noted, in his remarks to reporters, that one of the biggest losses of
jobs was in Colombia's oncebooming construction sector.

The jailed leaders of the Cali drug cartel, most of them billionaires, are
believed to have laundered vast sums of money through the construction
business before their arrests in 1995.

The embattled Samper, who was nearly ousted last year amid the scandal over
his allegedly drugfinanced election campaign, did not refer to other likely
causes of the growing rate of joblessness in Colombia.

Industrialists say these include Colombia's huge trade in contraband goods,
which has hurt the industrial sector severely since most local manufacturers
are unable to compete with cheap goods smuggled into the country from
overseas.

Western drug experts say most of the trade in contraband merchandise, which
totals anywhere between $5 and $8 billion per year, is carried out by drug
traffickers laundering illicit proceeds from abroad.

Funnelling dollars from drug sales back into Colombia has become an
increasingly difficult and risky proposition, given tighter controls in the
world banking system, the drug experts say.

Instead, cocaine merchants use their drug dollars to fill boats with anything
from television sets and refigerators to cigarettes and Scotch whisky and
sell them at a discount to convert drug dollars into ``clean'' local currency
back home.