Saturday, June 20, 2015

The Outlaw Economy

San Andresitos workers fill Simon Bolivar plaza in protest against an anti-contraband law.
They're scattered across Bogotá, with names like San Victorino and San Andresitos - the latter named
Protesters wearing shirts charging that the anti-contraband
law would mean monopolies and destroy small businesses. 
after Colombia's Caribbean island of San Andres, which are notorious for smuggling. These stores' cheap imported goods carry a reputation for being contraband and often serving for laundering drug money.

At least, that's what many authorities believe. And perhaps the best evidence that they're right came the other day when thousands of owners and employees of the San Andresitos filled San Victorino and Simon Bolivar plazas with a deafening protest against a law raising penalties and jail terms for buying and selling contraband goods.

Colombia's huge contraband industry might seem innocent enough: It provides cheap imported running shoes, electronics and refrigerators, not to mention all of the gasoline consumed in regions near the Venezuelan border. It also employs many thousands of Colombians.

San Andresitos stores on Calle 13 in Bogota.
However, cheap smuggled goods don't pay taxes, depriving the state of money for schools, roads and police and hurt domestic manufacturing. This is felt particularly in provincial health programs, which are financed by duties and taxes on cigarettes and whiskey - two heavily smuggled items. The cheap, smuggled, untaxed products are also particularly cheap, placing them within the reach of children.

However, contraband's worst impact might be its role in money laundering. Drug cartels find it difficult bringing their illegal millions in profits back into Colombia thru the banking system. So, they convert them into legal goods, which may be either legally imported or smuggled in thru places like the La Guajira peninsula and marketed in the San Andresitos.

For years during the late 1990s and early 2000s, cigarette makers Philip Morris and British
Cigarettes, many of them smuggled, for sale
next to candy in La Candelaria.
Many of the boxes carry warnings in
English instead of he required
Colombian ones.
American Tobacco facilitated cigarette smuggling into Colombian, flooding the country with cheap smokes and helping terrorist groups launder drug money, according to investigators and Colombian government officials.

The San Andresito businesses skirt around the fact that so many of their products lack documentation. But, if those products aren't illegal, why are the San Andresito people so up in arms against it?

That cheap camera, pair of jeans or MP3 player may not be so innocent.

By Mike Ceaser, of Bogotá Bike Tours

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