Around the World in 80 Hours #6: Is Bogota safe?

[thomas_digiano]

When I told my parents that I was traveling to Colombia, they immediately got concerned. "What about the drug cartels down there?" "What if you get kidnapped for ransom?"

I obviously can't give you the final judgement on safety issues in Bogota, or even that much of an authoritative one given we were only here for 8 hours, but I can give you an impression based on my time here with Eric Chiang​. First off, we did see some rough areas in Bogota (just as any other city about its size has), but overall the really surprising thing is just how nice the areas we traveled in were. There's Audi and Maserati dealerships, even a Cartier store:

But it's not just luxury boutiques that show just how far the city has come, it's scenes like this playground:

Even just 10 years ago this country was essentially ruled by drug cartels and rated one of the most dangerous in the world for travelers. WHAT HAPPENED?? This was the other economic problem we wanted to look at.

This particular problem isn't quite as straightforward as the coffee one; it's complicated and political in nature as well as economic. Here's what is known: Colombia's increased stability has coincided with a 60% reduction in its coca crop (chief ingredient of cocaine), over the past 10 years. We still saw economic clues nonetheless. This guy was out in front of a bank ATM:

Ok, seems obvious; post a bunch of armed soldiers throughout a city and they'll keep the peace, right? What does that have to do with economics? The key is in the organization that ordered him there.

One of the key principles that shows up in almost every, well, principles of economics text is that stable institutions are essential to a functioning economy. Ten years ago, the army wouldn't have ordered the soldier there due to lack of resources, corruption, or another symptom of its instability. If individuals don't feel confident in their own safety or the ability to access their resources, they don't invest these resources, purchase goods, or in sum, grow the economy.

So what brought increased stability to Colombian institutions like the army and government as a whole? Well, that's the complicated part. Some of it is certainly due to the US investing millions of dollars through their "Plan Colombia" as the front line of the war on drugs. Some of it could be due to internal political pressure. Finally, some of it could be due to countries like Peru and Mexico having less stable institutions that offered a more hospitable market place for the drug cartels.

The bottom line is you don't get Cartier and happy playgrounds if you're worried you'll get jumped when withdrawing your paycheck.

Side note: It's not all roses. Like any economics issue, there are externalities that arose from "Plan Colombia". For instance, a spike in numbers of the leftist FARC guerillas in many of the cocaine growing areas of the country. This American Life did a fantastic podcast on propaganda efforts to counter this recruitment surge.