Kidnapping bad for business? Why the FARC may actually mean what it says.

• A version of this post ran on the author's site, Insightcrime.com. The views expressed are the author's own.

The announcement that Colombia's FARC, the region's oldest and largest insurgency, would halt kidnappings was greeted with mixed emotions. But while the skeptics seem to outnumber the optimists, the new strategic and economic reality of the rebels leaves room for hope.

The·Revolutionary Armed Forces of Colombia (FARC's) declaration, slipped into the fifth paragraph of a communique (in Spanish) about the pending release of 10 longtime hostages from the security forces, was surprising for both its abruptness and introspective nature.

"Much has been said about retentions [FARC's word for kidnappings] of civilians," the group wrote on its website (in Spanish), before stating its intention to eliminate kidnappings as "part of its revolutionary action."

"It's time to clarify who and why one kidnaps today in Colombia," the group added.

[See InSight Crime's FARC profile]

Of course, the FARC did not clarify, and many wonder whether the offer was real. Like the longtime hostage Ingrid Betancourt, who was quoted at length in Spain's El Pais (in Spanish), most Colombians seemed to greet the announcement with relief mixed with a healthy dose of skepticism.

For his part, Colombia's President Juan Manuel Santos Tweeted that the announcement was "important," hardly a call for renewed peace talks (the two sides broke off their last talks in 2002, when the FARC commandeered a commercial aircraft, landed it on a highway and kidnapped several passengers, including a prominent politician).

Colombians have a reason to doubt the FARC. The vague language in the communique, and the FARC's 35-year history of kidnapping civilians leave them with little choice.

Specifically, the FARC said it was rescinding the "retention" portion of the infamous "Law 002," an insurgent "decree" issued in 2000 that called for "taxing" all citizens above a certain income level. But those income thresholds were impossible to accurately establish, and became irrelevant for those tasked with collection duties.

The "law" was quickly applied to the middle and upper class alike. To be sure, the FARC had already expanded its kidnapping practices in the 1990s, targeting middle and lower middle class victims, not the wealthy, who tended to draw more attention from the security forces and political circles. That strategy is what led to the dramatic and devastating rise in kidnapping, made Colombia the "kidnap capital of the world," and went a long way towards isolating the group from its base followers.

The FARC's current statement on this matter is similarly vague, and the ominous call to "clarify who and why one kidnaps" does not sit well. Nor does the fact that kidnapping, in particular by the FARC, showed a slight uptick in 2010 and early 2011.

The FARC also makes no mention of stopping extortion. Extortion and kidnapping are often part of the same circle of crimes. In essence, kidnapping becomes a way to ensure regular extortion payments. Eliminating this threat leaves the FARC with other, less effective means of ensuring payment (beatings or other physical abuse) or the choice of employing very extreme measures (murder), which often have high political costs.

Nonetheless, there are reasons to be hopeful that this offer may be genuine; some of them political, others strategic, but most of them economic.

The last 10 years have left the FARC in a greatly debilitated state, much less present and much less potent than they were when they issued "Law 002." No longer able to coerce large portions of the population, the group has to rebuild its political capital. Ceasing kidnapping is quickest way to jump start that process.

On a strategic level, the guerrillas have had to alter their war against the state. To begin with, there are simply fewer rebels. The FARC have dropped from an estimated 20,000 soldiers to closer to 8,000. The result is that they are no longer in control of vast geographic spaces. They have also been effectively pushed to the edges of the country and operate in less populous areas.

The government's increased presence in the countrysides has also forced them to operate in smaller units who are dedicated to more traditional hit-and-run rebel tactics. This makes it difficult to hold kidnapping victims over long periods of time.

Perhaps most importantly, the FARC's decision may reflect a new economic reality of the group: they simply do not make much money kidnapping anymore, and leaving it will not hurt their bottom line.

The numbers illustrate this. Kidnappings in Colombia have dropped precipitously. As this graphic created by InSight Crime using data from the Colombia government agency that tracks kidnapping (in Spanish) shows, there are currently about 300 reported kidnappings per year, compared to over 3,500 when the practice peaked in 2000.

Equally important is the changing nature of the victim. The Colombian government says that kidnapping hits lower middle and lower class more than any other sector. The ransoms have dropped in kind, reaching an average of $5,000, many times less than estimated sums a decade earlier.

Putting this together yields a bleak financial picture for the FARC's kidnapping rings. Assuming, as Colombia's Defense Ministry does, that the FARC is involved in one-quarter of all kidnappings, their gross income from kidnapping is a paltry $350,000.

Even if the group demands and receives triple the average ransom and the kidnapping rate is three times what is reported, its earnings, after expenses, would still be around one million dollars, hardly worth the time, effort and political costs of the practice.

The FARC is no ordinary organization, so they may earn much more than the average kidnapping crew. But even if we assume they make ten times the estimates above, compare that with the estimated $200 million (in Spanish) (other estimates reach $500 to $600 million) per year the FARC can earn by "taxing" drug producers or drug trafficking organizations who operate in their areas of influence, or selling coca base or processed cocaine to the traffickers, and you can understand why kidnapping has become more of a hassle than an earner.

Colombians' skepticism regarding the FARC's sudden change in tactics is warranted, but it could be that the group is simply employing a cold economic calculus to the issue.

– Steven Dudley is a director at Insight – Organized Crime in the Americas, which provides research, analysis, and investigation of the criminal world throughout the region. Find all of his research here. Additional reporting provided by Andres Ortiz Sedano.