Economic Impact of Plan Colombia's Alternative Development Program

Abstract

Overall, the investment projects of Plan Colombia in its program Alternative Development as evaluated in this work, which are equivalent to a foreign capital inflow of US$ 1164.5 million (for about 4 years) may increase GDP by about 1.2 percentage points, and lead to an increase in employment of 0.9 percentage points. The effect is reflected in the increase in both rural and urban incomes and a small improvement in income distribution. However, there are appreciation pressures on the exchange change that may affect exports especially those coming from the agricultural and industrial unskilled labor intensive sectors.Plan Colombia, Migration, Computable General Equilibrium Models, Harris-Todaro model