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Economy and Business in Colombia

Like most other Latin American countries, Colombia has since 1989 liberalized its economic policy through free trade agreements with neighboring countries, facilitating foreign capital and a more and more market-oriented domestic policy. Expanding oil recovery and some diversification of business have to some extent limited the social costs of this economic policy.

Business and Economy of Colombia

According to countryaah, agriculture is the main trade route with coffee as the dominant crop, but the industry has expanded greatly since 1940. The country has rich biological, mineral and energy resources that are not fully utilized. Gross domestic product (GDP) grew by 1.6% per year in fixed prices in the period 1994–2002; Growth has stagnated from around 1980, partly as a result of falling coffee prices. At the same time, the "black" economy has grown in scale, especially the illegal trade in marijuana and cocaine. GDP per capita in 2003 was estimated at approx. 6300 USD.

Agriculture

Agriculture, forestry and fishing employ approx. 25% of the working population. About 5% of the land is cultivated land; almost 40% is considered to be pasture. Coffee is the main crop. Colombia is the world's second largest coffee producer, after Brazil. Production shows large annual fluctuations, but in recent years has been around 800,000 tonnes a year. The best coffee is grown in temperate areas between 1300 and 2000 meters above sea level. The most important areas of cultivation are the provinces of Antioquia and Caldas. Other important agricultural crops are sugar cane and cotton grown on large plantations in the Caucadale, coastal bananas and tobacco and cocoa. For their own consumption, corn and potatoes in the highlands, and rice around the lower reaches of Río Magdalena. Marijuana and cocaine are illegally grown in large areas. In the eastern lowlands, near the foot of the mountains, in Colombia's Wild West,

Agricultural productivity is consistently low. The average farmer lacks working capital, machinery and fertilizers. Productivity is further hampered by the very uneven distribution of the soil. Except for the coffee-producing area, where the uses are generally small, most of the land is collected in large goods (latifundios), which are owned by a small number of families. Most of the country's farmers live on small farms (minifundios), which are rarely larger than 20 acres, or are without owners.

Forestry

Forests cover half of the country's area. The rich forest resources have only been used to a limited extent, among other things. because of the difficult transport conditions. However, forestry is under development, both in the country's eastern parts (the Amazon) and along the Pacific coast.

Fishing

The fishing along the coasts is little developed and is run by relatively outdated methods. The fishing resources, especially along the Pacific coast, are likely to be large, and there is some fishing for shellfish and tuna. In catch quantity, however, inland fishing plays the biggest role.

Mining

Colombia has significant mineral resources. Most important are the deposits of petroleum; the most important fields are at Barrancabermeja (De Mares), close to the border with Venezuela (Río Zulia) and to the south of the country (Orito/Puerto Colón). The oil is mainly used for domestic consumption and covers most of the country's needs. Natural gas is extracted in the Río Magdalena delta. Colombia has the largest coal reserves in South America. The country is also the second largest producer of gold in South America (after Brazil), and a significant producer of platinum, silver, emeralds and manganese. Iron ore is mined in the provinces of Cundinamarca and Boyacá; salt extraction takes place under state control at Zipaquirá just north of Bogotá. In addition, there are deposits of lead, zinc, copper, nickel and uranium.

Energy

The country has significant hydropower resources. Hydroelectricity is strongly developed, and in 2014 accounted for 69.5 per cent of the generation of electrical energy, compared with 17 per cent in 1960. Heat power plants accounted for 29.6 per cent of the electricity production. The country is self-sufficient with coal and petroleum. The final consumption of electrical energy in 2016 was estimated at 1444 kWh per inhabitant.

Industry

The industry was developed strongly after the Second World War, and today stands at approx. 20% of employment (incl. Mining) and 30% of gross domestic product (GDP). Production is mainly concentrated in the four largest cities: Bogotá, Medellín, Cali and Barranquilla. The main industrial sectors are the food and beverage industry (Bogotá), the textile industry (Medellín) and the transport industry. The heavy industry is developing. Iron and steel mills can be found in the Paz de Río in the metropolitan area and in Medellín. The chemical industry is extensive; petrochemical plants can be found in Barrancabermeja, Cali, La Dorada, Guamo and Tumaco.

Foreign Trade

Coffee is the absolute dominant export commodity and the country is very vulnerable to world coffee prices. Other export products include bananas, cut flowers, petroleum products, clothing and textiles. Unofficially, the export value of cocaine exceeded the total legal export value. Important import goods are machinery, transport equipment and chemicals. The United States is the most important trading country.

Transport and Communications

The mountains create great difficulties for transport, construction of roads and railways is expensive, and aircraft are important means of transport for longer distances. The railways are narrow-gauge (914 mm) and are state-owned. They have a total length of approx. 3000 km; The most important line is the Bogotá-Buenaventura Pacific Railway. The newest line, which links the interior of the country to the Caribbean port city of Santa Marta via the Magdalena Valley, was completed in 1961.

The road network has a total length of approx. 115 000 km; only a minor part has fixed cover. The main road network consists of three north-south axes, and connects most major cities and towns.

Río Magdalena is an important road wound. It is navigable for a length of approx. 1500 km to Honda. However, river traffic is hindered by low water levels during the drying period. The main port cities are Buenaventura and Tumaco on the Pacific, and Santa Marta, Barranquilla and Cartagena on the Caribbean. An ore harbor for shipping coal from El Cerrejón can be found at Bahía de Portete on the Guajira Peninsula.

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