Master thesis



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MASTER THESIS
An examination of the influence of the FARC-EP on the economic development of Colombia

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Development and International Relations

10th Semester, 2012

Milana Dortangs

Supervisor: Steen Fryba Christensen
Acknowledgement

Hereby I would like to express my gratitude to my supervisor, Steen Fryba Christensen, for making it possible for me to write my master thesis and, thereby, successfully complete my education. His encouragement, support and guidance during the writing process from beginning to end allowed me to learn from this process and gather a full understanding of the subject.

Furthermore, I would like to thank my parents, who supported me during the completion of my thesis as well as in the rest of my life. Without them, I would not have been able to complete this assignment.

Milana Dortangs


Abstract
The purpose of this thesis was to investigate the connection between the influence of the FARC-EP and the economic development of Colombia. Furthermore, the goal of the research was to examine the influence of the international relations between the US and Colombia on the development of Colombia. In order to successfully conduct the research required for this thesis, a theoretical framework based on Marxism, neo-liberalism, international relations theory with a focus on internal conflict, and theories of war was created. This theoretical framework offered the basis for a broad and extensive study of literature related to the problem area. It presented the opportunity to conduct all-encompassing research, resulting in clear findings.

The research for this thesis comprised various significant elements with regards to the problem formulation, including but not limited to the economic and political development of Colombia, the development of the FARC-EP, the insurgency’s influence on the socio-economic development of Colombia, the influence of violence and internal conflict on the economy, and the implementation and effect of Plan Colombia. The results of the research indicated that the influence of the FARC-EP on the economic development of Colombia cannot be entirely disentangled from the influence of other relevant factors affecting the economic development of Colombia. However, in spite of the strong connection between the various elements that are relevant to the situation of internal conflict in Colombia and their influence on the country’s economy, it could be concluded that the influence of the FARC-EP on the economic development of Colombia is undeniable. This influence could be determined clearly as a result of the insurgency’s strong connection to numerous significant elements related to the economic development of Colombia.



Table of Contents

Abbreviation List ………………………………………………………………………………………………. 5

Introduction ………………………………………………………………………………………………. 6

Problem Formulation ………………………………………………………………………………………………. 8

Methodology ………………………………………………………………………………………………. 9

Choice of Topic ………………………………………………………………………………………………. 9

Sources ………………………………………………………………………………………………. 9

Choice of Theory …………………………………………………………………………………………….. 10

Analysis …………………………………………………………………………………………….. 12

Limitations …………………………………………………………………………………………….. 12

Theory …………………………………………………………………………………………….. 14

Marxism …………………………………………………………………………………………….. 14

Historical context of Marx’s critique on capitalism ………………………………………………………………………… 15

Historical materialism …………………………………………………………………………………………….. 17

Neo-liberalism …………………………………………………………………………………………….. 19

IR Theory and internal conflict …………………………………………………………………………………………….. 20

Theory of War …………………………………………………………………………………………….. 20

Bargaining Theory of War …………………………………………………………………………………………….. 22

Background …………………………………………………………………………………………….. 27

Overview of the historical economic development of Colombia …………………………………………………. 27

Recent economic development of Colombia ……………………………………………………............................. 29

Historical overview of the development of the FARC-EP ……………………………………………………………… 31

Recent development of the FARC-EP …………………………………………………………………………………………… 34

Analysis ……………………………………………………………………………………………. 36

The economic development of Colombia …………………………………………………………………………………….. 36

Economic progress and policies .…………………………………………………………………………… ……………… 36

The CFTA ……………………………………………………………………………………………. 38

The political development of Colombia ……………………………………………………………………………………….. 39

President Pastrana …………………………………………………………………………………………….. 39

President Uribe …………………………………………………………………………………………….. 40

President Santos …………………………………………………………………………………………….. 40



Plan Colombia ……………………………………………………………………………………………. 41

Coca cultivation and drug-trafficking ……………………………………………………………………………………………… 42

The influence of drug-trafficking on the economy …………………………………………………………………………. 43

PNDA …………………………………………………………………………………………….. 44

Dislocation of people …………………………………………………………………………………………….. 45

The development of the internal conflict …………………………………………………………………………………….. 46

The FARC-EP and the situation in Colombia …………………………………………………………………………………… 47

An offensive against the FARC-EP ………………………………………………………………………………………………….. 48

The influence of violence on the economy ………………………………………………………………………………….. 49

Attacks on oil companies …………………………………………………………………………………………….. 50

The influence of the internal conflict on the Colombian economy ………………………………………………… 50

Economic development and the internal conflict …………………………………………………………………………. 52

Infrastructure ……………………………………………………………………………………………. 53

The US and Colombia …………………………………………………………………………………………….. 54

The historical involvement of the US and the fight against the FARC-EP ……………………………………….. 55

Terrorism and the fight against drug-trafficking ……………………………………………………………………………. 57

Coca cultivation and US involvement …………………………………………………………………………………………….. 57

USAID …………………………………………………………………………………………….. 58

USAID grants …………………………………………………………………………………………….. 59



Colombia and other Latin American countries ……………………………………………………………………………… 60

The Colombian economy compared to other Latin American countries ……………………………………….. 61



The decrease in the influence of the FARC-EP ………………………………………………………………………………. 62

Conclusion …………………………………………………………………………………………….. 64

Perspective Taking …………………………………………………………………………………………….. 66

Appendix I – Map of Colombia …………………………………………………………………………………………….. 67

Appendix II – GDP of Colombia: 1980-2010 …………………………………………………………………………………… 68

Bibliography …………………………………………………………………………………………….. 69

Abbreviation List

AED Accelerated Economic Development

ATPA Andean Trade Preference Act

AUC Autodefensas Únidas de Colombia [United Self-Defense Forces of Colombia]

BTW Bargaining Theory of War

CFTA US – Colombia Free Trade Agreement

ELN Ejército de Liberación Nacional [National Liberation Army]

FARC-EP Fuerzas Armadas Revolucionarias de Colombia – Ejército del Pueblo [Revolutionary Armed Forces of Colombia – People’s Army]

FDI Foreign Direct Investment

GDP Gross Domestic Product

ICIJ International Consortium of Investigative Journalists

IMF International Monetary Fund

IR International Relations

PC Plan Colombia

PCC Partido Comunista Colombiano [Colombian Communist Party]

PNC Plan Nacional de Consolidación [National Consolidation Plan]

PNDA Plan Nacional de Desarrollo Alternativo [National Plan of Alternative Development]

PPP Purchasing Power Parity

RMA Revolution in Military Affairs

UN United Nations

US United States

USAID US Agency for International Development


Introduction

The history of Colombia shows a complex and interesting profile of a country with great economic potential, which has been dealing with a variety of problems and has developed strongly in the past decade. The country has been dealing with internal strife practically since it became independent in the 1820s, with the only pause in the armed conflict occurring in the period from 1902 to the 1940s (Rochlin, 2010: 715). The development of Colombia is strongly influenced by the dynamical relationship between violence and the economy, which puts a strain on the country’s progress towards a stable society. Due to Colombia’s conflict with various violent actors the country continues to struggle for the power over its territory. This is confirmed by the fact that “[t]he country has enjoyed exceptional regime stability but is racked by internal conflict” (Holmes, Gutiérrez de Piñeres & Curtin, 2009: 3). In addition to the serious problems caused for the people, the Colombian economy has suffered over the past decades from the violence due to the country being an increasingly unattractive place for foreign as well as domestic investment.

Overall, the internal conflict in Colombia has influenced the country in various ways, including its economic development in recent years. In spite of significant improvements over the past decade, Colombia continues to struggle with the lack of a well-functioning system, which is illustrated by the fact that “[i]nternal conflict, authoritarian strains, tensions between modernity and underdevelopment, and the corrupting effect of drug trafficking all remain as troubling domestic issues, and regional disputes and tensions are creating further difficulties for Colombia” (Pardo, 2009: 84). These difficulties are partly a result of the fact that “[a]lthough Colombia is one of Latin America’s oldest democracies, with a history of unusually competent economic governance, it is also home to one of the most entrenched leftist insurgencies in the world and a brutal paramilitary movement” (Holmes, Gutiérrez de Piñeres & Curtin: 73).

The Fuerzas Armadas Revolucionarias de Colombia – Ejército del Pueblo [Revolutionary Armed Forces of Colombia – People’s Army] (FARC-EP) is the largest, most powerful and longest-established guerilla movement in Latin America. Unlike other guerilla movements, it has managed to sustain its revolutionary struggle as a military and political force against capitalism, fighting to achieve social change within Colombia’s capitalist system by means of violence (Brittain & Petras, 2009: xv). In Colombia, “[t]he historical settlement pattern, the distribution of the population, and the physical geography hinder effective central government control and provide opportunities for rebellion” (Holmes, Gutiérrez de Piñeres & Curtin: 12). The conflict between the Colombian government and the guerilla movements, principally the FARC-EP, has been influencing the country for over four decades and reached its peak during the late 1990s and early 2000s. The insurgent groups lack the forces to overthrow the government, and in recent years violence in the country has been decreasing, presenting broad opportunities for further economic development in Colombia. The exact number of guerilla soldiers is unknown, as official figures are often significantly different than estimates from other organizations (Brittain & Petras: 22). In spite of the extensive efforts of the government to reduce the strength of guerilla movements, the influence of the FARC-EP on the socio-economic situation in Colombia continues to exist (CIA World Fact Book).

The influence of the FARC-EP as a guerilla movement on a country with great economic potential will be further examined in this thesis. I will start by presenting an overview of the economic and political situation in Colombia, as well as an explanation of the origins of the FARC-EP. Altogether, this information in combination with the theoretical framework as set out in the theoretical chapter, will provide the context for a subsequent discussion of the influence of the FARC-EP related to the economic development of Colombia. The strong involvement of the United States (US) with Colombian policies results in a logical integration of the US and Colombian international relations (IR) into the topic. The influence of the US on the socio-economic situation in Colombia is mainly visible through the implementation of Plan Colombia (PC). The illicit drug trade, the influence of the FARC-EP on Colombia and the economic situation in the country are strongly interconnected, as will become clear in this thesis.
Problem Formulation

When looking at the history of Colombia, it cannot be denied that the FARC-EP has had a great influence on the development of the country. Colombia has a strong economic potential which is proven by the country’s significant development in the past decade. Combined with the possible decline of the forces of the FARC-EP, this raises the following question:



What is the relation between the influence of the FARC-EP and the economic development of Colombia?

This question is strongly interconnected with the following sub-question:



In which way are the international relations between Colombia and the US related to the development of Colombia?

In order to answer these questions, I will examine the influence of the FARC-EP on Colombia, by studying the historical development of the country in combination with the development and progression of the FARC-EP. In this thesis I will provide a clear idea of the influence of the FARC-EP on the economic development in Colombia. As economic development is influenced by various actors, I will examine in which way, if possible, the FARC-EP influence can be disentangled from other factors that have influenced the economic development of Colombia over the past decades. Furthermore, I will examine the influence of Colombia’s IR with the US related to the economic development of Colombia. Both countries and their policies are strongly interrelated and the US has had a great influence on Colombia’s development in the past years, mainly through PC. The strong connection between both countries allows for further research, which complements the research done in order to answer the main question in this thesis by providing a most complete overview of the situation in Colombia.

The theoretical framework used for my research is based on which theories I believe to be underlining the research conducted for this thesis the most. The theories found to be most useful for the further explanation of the topic resulted to be Marxism, neo-liberalism and theories of war and internal conflict, as will be explained further in the theoretical chapter (cf. Theory). Ultimately, although it is a challenge to distinguish the influence of the FARC-EP from other influencing factors, the impact of the FARC-EP on the economic development in Colombia will be graspable from this thesis.

Methodology

In this chapter I will thoroughly explain the process concerning the choice of topic, data collection and the choice of theory for this master thesis. This explanation is followed by a discussion of the limitations of my research, as well as an overview of the choices I made related to the writing of the analysis. As all choices made in the process of writing this thesis have been made according to my subjective opinion, these choices can always be questioned and critiqued.



Choice of Topic

I have always had a strong interest in Latin America, therefore, I decided to do my internship in South America and, consequently, write my master’s thesis on a subject related to the area. During my internship I learned that Colombia is regarded as one of the Latin American countries with a high economic potential. I knew about the various issues, often related to violence, which the country has been dealing with historically. Furthermore, I regularly came across information about the country’s largest insurgency, the FARC-EP. I believed there had to be a connection between the influence of the FARC-EP and the socio-economic progress of Colombia, and I wanted to know more about the causes for the relatively slow economic progress, in spite of the broad possibilities of the country to generate economic development. I have always had a strong interest in Colombia, therefore, I wanted to focus on the situation in the country and possibly learn about the possibilities for further development in the future. Choosing to focus on Colombia’s relations with the US was a direct consequence of the strongly interrelated policies of both countries, as well as the influence and involvement of the US with regards to the internal conflict in Colombia (cf. Analysis).



Sources

Due to the influence of a large insurgency such as the FARC-EP, and the importance of Colombia as a country with great potential in Latin America, there is plenty of data available on both topics. Finding relevant information that combines the two topics, however, made the research for this thesis more challenging. The data used for this thesis is collected from books, (news) articles and the Internet and was available in English, Spanish and Portuguese. In spite of the plentiful data available about various issues related to Colombia, it resulted to be more difficult to decide which data was most useful for the research for this thesis. Ultimately, I chose to use various books and articles as the basis for my research, carefully selected based on various criteria of which the most important factor, in my opinion, is whether the author provides an all-encompassing view on the situation in Colombia.

An example of a source that I chose to use as the basis for part of my analysis is the work of James J. Brittain. In his book Revolutionary Social Change in Colombia: The Origin and Direction of the FARC-EP he describes his findings, based on the research he conducted while spending several years in Colombian guerilla territory. Therefore, in my opinion, his work represents a realistic examination of the development of the FARC-EP, with findings, such as the estimated number of FARC-EP combatants, that may not always be confirmed by official figures. However, my personal beliefs are reflected in his findings, that I believe to be most accurate and objective. Furthermore, I chose to use the book Guns, Drugs and Development in Colombia as it provides a complete and well-rounded overview of the situation in Colombia, which allows for a deep understanding of the various elements that influence the economic development of Colombia. In order to study the economic development of Colombia I chose to mainly use economic articles from the Internet, as I believe this information allows for a thorough understanding of the current situation as well as the causes for economic development in the past decades. Ultimately, there were specific reasons for the use of each source that I included in the research for this thesis.

Choice of Theory

The process of determining which theories are most suitable to provide a relevant framework in order to examine the economic situation in the developing country of Colombia, which is influenced thoroughly by internal conflict, resulted to be challenging. As there is no single theory combining both aspects of the research for this thesis, namely the economic development of a country in relation with the influence of a guerilla movement on the socio-economic situation in the country, I chose to use both economic theory and theories of war and internal conflict in order to provide a complete theoretical framework. Ultimately, after carefully examining the broad possibilities to choose theories to use in the process of writing this thesis, and in order to write a theoretically based examination that is as well-rounded as possible, different types of theories are used as the basis for the research for this thesis. Together, I believe these theories present the most complete theoretical framework for the topic, which, in my opinion, would not have been equally achieved through the use of a different set of theories.

Firstly, the Marxist economic theory and neo-liberalism theory offer an economic angle to the research, which is important when looking at the economic development of Colombia. Marxist economic theory is valuable with regards to understanding the origins of the FARC-EP insurgency and the economic situation in Colombia at the time of its origin (cf. Background). Furthermore, neo-liberalism provides a useful theoretical basis when looking at the policies of the Colombian government in past years, focused on implementing neo-liberal strategies in an attempt to further develop the Colombian economy. A theoretical framework for the economic perspective of the Colombian government in the past years allows for a further understanding of the economic development of the country during that time. Secondly, due to the internal conflict Colombia is suffering from and the distinctive situation arising from the problems the government is facing, the groundwork to understanding the violence in the country is laid in a theory that discusses the relation between IR theory and internal conflict. As theories do not focus on internal conflicts only, it is common to study theories of political violence and/or interstate violence in situations of internal conflict. However, the bargaining theory of war (BTW), which originated fairly recently, partly focuses on internal conflicts. Therefore, the BTW is most relevant to internal conflict. Furthermore, it helps explain the situation in Colombia through the fact that both the FARC-EP and the government have tried to bargain on their disputes during past years. These bargaining efforts failed and, consequently, the internal conflict in Colombia is on-going, thereby affecting the economic development of the country.

Other theories that presented itself while researching which theories would be most fitting for this thesis were, for example, the International Regime Theory, Balance of Power Theory and theory of Offensive Realism. However, I chose to discard these theories based on the belief that these theories were not as applicable to the situation in Colombia as the ones that were ultimately selected. Both the International Regime Theory and Balance of Power Theory were discarded as they are mainly focused on IR and global structures, which makes it difficult for them to be applied to a situation of internal conflict such as the one in Colombia. Offensive Realism is equally focused on the international system as well as the expansion of the state and, therefore, not fully applicable to the situation in Colombia. Furthermore, there are various economic theories available, of which I believed, for example, capitalism and liberalism to be less applicable to the Colombian case than neo-liberalism and Marxism.

Intertwining economic theories with theories of war and internal conflict ultimately provides the best possible insight into the internal conflict in Colombia and its influence on the economic development, thereby including the influence of the FARC-EP on the economic progress of Colombia. The combination of the theories as they are described in the theoretical chapter is most useful for this thesis, as through the use of all theories mentioned the situation in Colombia can be investigated most thoroughly. The combined use of the theories in this thesis allows for a deep understanding of the situation in Colombia, through the focus of various theories on various but equally relevant elements of the situation in Colombia. As different theories focus on different elements of the Colombian development, the theories supplement each other, thereby providing a most fitting theoretical framework when combined. Therefore, I believe the combination of the applied theories provides the most complete theoretical framework possible as a basis for the research for this thesis.




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