Cocaine revenue surpasses oil exports in Colombia, report says
June 23 (UPI) -- Colombia's illegal cocaine trade generated more revenue than the country's oil exports in 2024, becoming its largest source of foreign currency, according to a new report.
The report by Valor Público, a research center at EAFIT University in Medellín, found that cocaine production and trafficking brought Colombian criminal organizations about $16.5 billion in 2024, equivalent to 4.4% of the country's gross domestic product.
That amount exceeded Colombia's crude oil exports, which generated about $15 billion in 2024. Oil has long been one of the main pillars of Colombia's formal economy.
The research, led by Santiago Tobón, a security expert and director of Valor Público at EAFIT University, and economist Daniel Mejía said the cocaine economy's weight in Colombia has tripled over the past decade.
The study found that cocaine revenue also surpassed other traditional legal exports, including coal, which generated $7.1 billion, as well as coffee, gold and flowers.
The authors said the shift was not driven by higher domestic cocaine prices, but by an unprecedented increase in production efficiency in coca-growing areas and drug laboratories.
"It is not that cocaine has become more expensive in the domestic market. On the contrary. What we are seeing is a massive increase in the volume of pure production," Tobón said.
The report said technical improvements in the chemical processing of coca leaves and maturation of more productive plants pushed Colombia's potential cocaine output to record highs.
"Cocaine production went from less than 300 tons in 2013 to nearly 3,000 [tons] in 2024, while the price received by Colombian organizations remained relatively stable," the report said.
The surge in supply flooded international routes and more than offset any decline in local prices caused by oversupply, researchers said.
At the same time, Colombia's formal oil industry declined because of lower domestic production and instability in international crude prices, accelerating the point at which cocaine revenue overtook oil exports.
The report also found that cocaine brings Colombia about five times more revenue than illegal gold. But the two illicit economies function differently.
Gold is sold at a single global price, with little added value afterward, and much of the money remains in the country. Cocaine gains most of its value abroad, through transport and street-level distribution, which Colombian groups control only in part.
The report said Colombian criminal organizations also have strengthened their control over transnational logistics. They no longer limit themselves to selling coca paste in rural coca-producing areas. Instead, they coordinate transport, concealment and shipment from Colombian seaports to high-value markets in the United States, Europe, Asia and Australia.
By taking on the risks of export, the groups multiply their profits. A kilogram of cocaine that leaves a Colombian laboratory at about $1,400 can reach a wholesale value of more than $40,000 once it arrives in Europe, according to the report.
The researchers said the shift has produced what they call "criminal governance" and stable oligopolies. Large groups, including dissident factions of the Revolutionary Armed Forces of Colombia and the Clan del Golfo, often prefer to negotiate invisible borders and regulate markets rather than engage in costly wars.
The result, the report said, is a dangerous paradox for the state: regions with stable homicide rates, but under quiet, extensive and highly profitable criminal control.
Brazil freezes $125M in probe of bank controlled by evangelical leader
Banco Digimais is an institution controlled by evangelical bishop Edir Macedo, founder of the Universal Church of the Kingdom of God and regarded as one of the country's most influential evangelical leaders.
More than 50 federal agents executed nine search-and-seizure warrants authorized by a federal court in São Paulo as part of Operation Mirage. The court order also authorized lifting banking and tax secrecy protections for those under investigation.
According to the Federal Police, the investigation is based on reports prepared by the Central Bank of Brazil, the country's main financial regulator, that identified what authorities described as serious irregularities in the management of the institution.
Investigators suspect that bank executives manipulated financial statements and regulatory records to conceal the institution's true financial condition, project an appearance of solvency to supervisory authorities and facilitate allegedly irregular transactions.
According to the Federal Police, the scheme allegedly involved the systematic manipulation of balance sheets and accounting results to conceal losses, inflate assets and generate artificial revenue worth hundreds of millions of Brazilian reais.
Authorities maintain that these practices allowed the bank to present a more favorable financial position than its actual condition to regulators and investors, facilitating fundraising operations that did not reflect the institution's true financial situation.
BBC News Brasil reported that investigators suspect investment funds were used as part of the scheme to conceal the bank's actual financial condition.
According to ICL Notícias, part of the scheme involved transferring assets into funds managed by companies linked to the financial group associated with Digimais.
Investigators contend these transactions may have allowed assets to be systematically overvalued, artificial revenue to be generated and the institution's financial deterioration to be concealed.
ICL Notícias also reported that the investigation is examining an increase in issuance of bank deposit certificates, known as CDBs -- instruments used by Brazilian banks to raise funds from investors. According to investigators, Digimais offered returns above 110% of the Interbank Deposit Certificate, or CDI, one of the main benchmark rates in Brazil's financial market.
The Federal Police also are investigating alleged irregular financial transactions that may have benefited the bank's parent company, as well as the possible insertion of false or manipulated information into official systems used by regulatory agencies.
Those under investigation could face charges including fraudulent management, the insertion of false data into financial statements and the execution of prohibited credit operations, as established under Brazilian legislation governing crimes against the National Financial System.
BBC News Brasil reported that targets of the search warrants included Digimais executives, among them Bishop João Urbaneja and his son, Thiago Urbaneja, as well as people linked to fund management companies associated with the institution.
According to ICL Notícias, Macedo is among those under investigation because of his status as the bank's controlling shareholder. However, news reports did not indicate that he was a target of Tuesday's searches. BBC reported that the religious leader was not included in the warrants because he currently resides outside Brazil.
The investigation comes two months after investment bank BTG Pactual announced the signing of an agreement to acquire Digimais, according to BBC News Brasil.
Banco Digimais was founded in 1981 under the name Banco Renner in the state of Rio Grande do Sul. The institution was restructured as a digital bank in 2020, adopted the Digimais name and became wholly owned by Macedo.
Macedo, 81, is the founder of the Universal Church of the Kingdom of God and owner of the Record media conglomerate, one of Brazil's largest media groups.
