What do Colombia and Alberta have in common, apart from being major oil producers subject to volatile commodity markets?.The need for economic diversification away from one dominant product surely ranks high..That’s because the Andean nation is facing a growing humanitarian crisis after a precipitous drop in its main source of export revenues — cocaine — amid surging supply and falling demand in countries such as the US and Canada suffering from the opioid crisis..According to Elizabeth Dickinson, a senior analyst at the International Crisis Group (ICG) in Colombia, rural areas are suffering “complete economic collapse.”.According to the World Bank, cocaine production accounts for about 8% of the country’s agricultural output and as much as 5% of its gross domestic product. At one point in the 1980s, cocaine accounted for an estimated 75% of its export revenues compared to oil’s official tally of 35%.. Drug deaths by type USDrug deaths by type In the US. ."This has created not only an economic crisis but frankly a humanitarian crisis," she said in a presentation to the United Nations World Food Programme, as per Reuters..A glut of coca leaf, the main ingredient in producing the narcotic drug, combined with rampant inflation is having negative ripple effects through the entire economy, fuelling a wave of economic uncertainty, corruption and spiralling violence..According to Spanish-language El Espectador newspaper, based in Bogotá, almost 400,000 coca-growing families in rural areas are facing “collective impoverishment” and in some cases starvation as they flock to the cities in search of work..Accurate statistics are hard to come by but the newspaper reports a kilo of coca paste — which is processed into cocaine — has fallen to about US$240 from $947 two years ago as per ICG..It also comes as the last report from the United Nations Office of Drugs and Crime (UNODC) reported record coca cultivation all through Latin America, including a 50% surge in Colombia. This has in turn led to record cocaine production and price wars among cartels and neighbouring countries such as Bolivia and Peru..It comes after Colombia outlawed the use of the herbicide Roundup in 2021, effectively curtailing eradication programs. Also, farmers in countries not known for coca production, such as Mexico, Guatemala and Honduras are also harvesting the plant for the first time..The result is that a kilo of pure coke in New York City has fallen about 50%, to $17,000 from $35,000 less than five years ago, according the US Drug Enforcement Agency..At least part of the price drop is due to increased supply, but lower US demand also plays into the equation, even as it surges in Europe and Australia. Unlike other countries such as Bolivia or Peru, 90% of the cocaine in the US traces its origins to Colombia.. Opioid deathsOpioid deaths in the US 199-2020 .That’s where demand for both powdered cocaine and its cousin, crack, are at decade lows in the US as producers — and consumers — switch to more easily manufactured fentanyl and methamphetamine..The number of first-time users in the US is the lowest since 2002 and the average age is higher, at 22 years of age.
