New estimates that the FARC guerrilla organization is worth billions of dollars draw attention to a highly contested issue that is critical to the peace talks between Colombia and its largest rebel group.
The Economist recently published estimates that the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC) had assets worth 33 trillion Colombian pesos in 2012, even after paying to maintain its guerrilla army. That is $11.4 billion at the current exchange rate. The value was reportedly based on an “unpublished study by government analysts.”
According to the publication, the FARC’s annual earnings were believed to be between $200 million and $3.5 billion at the turn of the millennium, when the group was at its strongest with 18,000 rebel fighters. The FARC’s finances have reportedly decreased since then.
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A large amount of the guerrilla group’s riches are invested inside Colombia in transport companies, properties and the stockmarket, the report suggests, while some money may also be hidden in countries that include Costa Rica, Venezuela, Ecuador and Panama.
In addition, El Colombiano has published figures evaluating the total weapons inventory of the FARC. The newspaper cross referenced government figures that put the FARC’s troop strength at 6,230 combatants and twice that many support personnel with demobilized guerrilla testimony on personal weapons allowances. It calculated that the group has at least 24,920 light firearms and around 4,392 heavier “support weapons” such as rocket launchers and machine guns. El Colombiano used The Economist’s annual earnings figure, as well as other studies, to calculate the FARC’s budget for war material at between $1.3 billion to $5.25 billion per year.
According to one former guerrilla, each rural fighter is equipped with a rifle, a pistol, eight grenades, a knife or a machete, a hammock, two pairs of boots, a flashlight, a watch and civilian clothing.
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Although there is little doubt that the FARC has a significant amount of money stashed away following decades of criminal activity, there has always been an undeniable lack of clarity surrounding the rebels’ wealth. Guerrilla commanders consistently deny that these riches exist.
Some analysts maintain that it is simply impossible to know what the FARC’s real fortune is. When questioned by InSight Crime on The Economists’ figures, Juan Fernando Vargas, an economics professor at the Universidad del Rosario, said that “no one knows what the finances of armed groups are and all estimates are based on frivolous calculations.”
The Defense Ministry’s reaction to the report was equally elusive: “I doubt that it’s possible to carry out a study, such as the one cited by The Economist, that clearly states [how much money] the guerrilla receives,” Minister Luis Carlos Villegas told LA F.m. Radio. “I don’t think this study exists.”
Endless guesswork has been devoted over the years to pinpointing the FARC’s wealth, but the estimates have been largely disparate, focusing on different elements of the FARC’s economy. El Colombiano’s recent estimate regarding the FARC’s yearly weapons budget, for example, cobbles together obliquely related statistics from 2006, 2013 and 2016 to produce a very broad estimate.
SEE ALSO: Colombia News and Profiles
In 2013, Colombian economist Salomón Kalmanovitz calculated that the FARC’s annual income from drug trafficking was around $1.7 billion, while that same year conservative estimates from InSight Crime’s own investigations suggested the guerrilla group made over $200 million from drug trafficking.
The following year, Forbes Israel provided estimates that the FARC had a total annual income of $600 million derived from the drug trade, kidnapping, mining and extortion, allegedly making it the third richest “terrorist” organization in the world.
In truth, it is likely that the leadership of the FARC itself does not know how much money the guerrilla group makes, as not all earnings are declared to rebel commanders. And while the drug trade may still be the rebels’ main source of income, a large slice of FARC profits continues to come from alternative economies, especially extortion and illegal mining. These earnings are at least as difficult to assess.
Given the FARC’s variety of lucrative criminal economies, The Economist’s numbers may not be too far from the truth, international security consultant John Marulanda told InSight Crime.
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However big the FARC’s reserves are, what is certain is that these finances are a crucial concern in the rebel group’s ongoing peace talks with the Colombian government. Money and power can not only give an armed group increased leverage at the negotiating table, they also increase the risk that dissident factions will choose to maintain their criminal activities rather than demobilize.
That said, both the government and the FARC may benefit from the secrecy surrounding the guerrilla group’s true wealth. A façade of poverty helps the FARC evade demands that the insurgency pay compensation to conflict victims. Head peace negotiator for the FARC Iván Márquez said in a recent BBC Mundo interview that: “The FARC has no money … all the FARC’s bank accounts in these tax havens, they can take them and put them towards reparation … but the problem is that we don’t have any.”
The government would prefer not to draw further attention to such a touchy subject because it could hamper the peace process, several analysts argue.
“The current government has wanted to give a low profile to the issue of the FARC’s ties to drug trafficking,” security analyst Marulanda suggested, pointing out that the state has already conceded various highly controversial benefits to the FARC related to the subject. This includes the announcement that guerrillas may become immune to prosecution for drug trafficking, and the suspension of aerial fumigation of coca crops, which Marulanda said was requested by FARC negotiators.
While pressure mounts in Havana to address any concealed rebel assets, it is unclear whether this wealth will ever come to light. The FARC has been able to effectively hide its earnings for decades, either by burying millions in cash in the jungle, or through sophisticated money laundering techniques that include the use of tax havens and, Marulanda affirms, North American banks.
According to The Economist, there are fears among anti-money laundering officials that money stashed abroad will make its way back into Colombia after a deal is reached, without there being sufficient resources to hinder this flow.
Ultimately, coming up with a haphazard estimate of rebel wealth is not as important as assessing what this might mean for future peace. These concerns are also evident in the case of the country’s second largest guerrilla group the National Liberation Army (Ejército de Liberación Nacional – ELN), whose richest but most belligerent war front could be a deal breaker in its own peace talks with the government.