Coca economy drives regional economic growth but does not improve public finances
In 2023, Colombia registered 253,000 hectares of coca crops and produced 2,600 tons, a 53% increase compared to 2022. Photo: iStock
TL;DR
- Coca cultivation has led to significant increases in municipal GDP, with an estimated $1.17 to $2.30 increase in GDP for every additional dollar in coca leaf value.
- Despite economic growth, municipalities involved in coca cultivation have not seen significant increases in local fiscal revenues.
- The expansion of coca crops is associated with a 104% increase in deforestation rates and a 302% growth in cattle ranching areas in the Amazon.
- The economic benefits of coca cultivation are currently difficult to replace with other agricultural or forestry sectors in the short term.
- Strategies are needed to substitute illicit activities without causing economic voids in regions dependent on coca.