Economy of Colombia

Economy of Colombia

According to businesscarriers, Colombia is an industrial-agrarian country with a steadily developing economy. The volume of GDP is 84.5 billion US dollars (2002), GDP per capita is 1942 dollars. GDP growth in 2002 is 1.5%. The highest growth rates were recorded in construction (5.6%), transport and communications (3.4%), energy (3.0%), and financial sector (2.3%). The growth rate in the manufacturing industry amounted to 1.1%, in the extractive industry – 4.7%, in agriculture – 0.5%. Share in the global economy 0.27%. Economically active population 20.1 million people, incl. employed – 17.1 million people. Unemployment 14.9%, underemployment 34.5%. Inflation 7.0%.

The share of agriculture in GDP is 14.2%, industry – 25.9% (including mining – 4.1%), trade and services, including transport and communications – 59.9%. The share of employment in agriculture is 22.7%, industry – 19.0%, trade and services, including transport and communications – 58.3%.

The mining industry produces mainly exported oil, coal, gold, platinum and emeralds, as well as natural gas. The main branches of the manufacturing industry are chemical and petrochemical, textile, clothing, food, car assembly (64,000 cars were produced in 2001), and the production of transport equipment. Electricity production — 43.3 billion kWh. Hydroelectric power plants provide 73% of electricity. In the oil industry, there is a large state-owned company, Ecopetrol, which independently conducts exploration work, which is engaged in attracting foreign investment and is a monopolist in the field of oil refining. Major foreign investors in the industry include British Petroleum, Repsol, Total, Occidental Petroleum and Shell.

The main branch of agriculture is crop production. Coffee is grown (700 thousand tons per year, 2nd place in the world in terms of production and export after Brazil), bananas (1.75 million tons per year; the main part of plantations oriented for export is located in the Caribbean coast), sugarcane (32.5 million tons), for domestic consumption – corn (1 million tons), rice (2.1 million tons), cotton (120 thousand tons), potatoes (2.8 million tons), legumes, etc. In the suburbs of large cities (Bogota, Medellin) export-oriented floriculture is developed. Animal husbandry of the meat and dairy direction. 24.2 million head of cattle, 2.5 million pigs, 2.4 million sheep, 2.4 million horses. Fishing (mainly in rivers). The area of ​​agricultural land is 4.2 million hectares, arable land 2.0 million hectares, irrigated land 0.9 million hectares.

Illegal proceeds from the drug business, according to various estimates, range from 3-4 to 6-8% of GDP and have a multiplier effect, generating demand that gives up to 10% of GDP.

The length of railways is 3304 km (including narrow-gauge 3154 km), motor roads 110,000 km (including paved 26,000 km). Pipeline transport (km): oil pipelines (3585), product pipelines (1350), gas pipelines (830). 9 maritime (Buenaventura, Tumaco, Santa Marta, Barranquilla, Cartagena, etc.) and 1 river port. 96 airports with paved runways, incl. 10 international. Passenger turnover of airports 8 million passenger-kilometres. The volume of cargo transportation by air is 489 thousand tons per year. 76% of international cargo traffic is at Bogotá Airport. In 2001, there were 198 fixed telephone lines and 76 mobile phones per 1,000 inhabitants. There are 3.5 million mobile phone users in the country, St. 900 thousand Internet users.

The share of trade in GDP is 4.1%. The share of the service sector in GDP is 20.9%. There is an extensive tourism infrastructure. The development of the industry is hampered by the unsafe situation in a number of regions of the country. 1.4 million foreign tourists visit Colombia every year.

Colombia has one of the most dynamically developing economies in the region, which is based on an exceptional wealth of natural resources (the country ranks 1st in the developing world in coal reserves, 3rd in Latin America in oil reserves, 1st in the world in emerald reserves, the world’s leading exporters of coffee, flowers and bananas), significant human potential. It is the only country in the region that did not suspend external debt payments during the economic crisis of the 1980s. The country’s economy was negatively affected by the Asian crisis of 1998, which was superimposed on the unfavorable conjuncture of world markets for the main export commodities – oil and coffee. In 1999, for the first time since the 1940s. negative GDP growth rates were recorded (-4.5%). Signs of recovery in the economy emerged only at the end. 2000.

The government is pursuing a reform program aimed at liberalizing imports, privatizing inefficient public sector enterprises, and attracting foreign capital. The inflow of foreign investments in 2002 amounted to 1.9 billion US dollars. The goals of foreign trade policy are to obtain preferences in trade with the US and the EU, diversify foreign trade, in particular, through new partners in the Asia-Pacific region.

The banking system consists of the central bank – the Bank of the Republic – and 29 commercial and mortgage banks, as well as financial corporations, in some of which foreign capital is involved. The minimum capital of banks is 33 billion pesos. The largest commercial bank is Bankolombia. The average bank rate is 27.5%. Stock exchanges operate in Bogota, Medellin and Cali.

The state budget deficit is 2.28 billion US dollars. Budget revenues are made up of indirect taxes (about 1/2 of revenues), direct taxes and credit resources. The main items of budget expenditures are: education, finance (including the payment of the public debt), defense and public works. The income tax rate is 35%. For most goods, the value added tax is 15%. Payments to the pension fund amount to 13.5% of the base salary, with 75% of this amount paid by the employer, 25% by the employee. The retirement age is 55 for men and 50 for women.

External debt 40 billion US dollars. Gold and foreign exchange reserves of 10.8 billion US dollars.

In 2002, the Colombian peso devalued by 25%. Strong devaluation was associated with the Argentine economic crisis, financial instability in Brazil and Uruguay, and political instability in Venezuela. In 2003, its rate stabilized at the level of 2700-2800 for 1 US dollar.

The official poverty line is set at 148.6 thousand Colombian pesos in 2000 prices. According to a World Bank study, 64% of Colombians are below the poverty line, and poverty is 14%. The poorest 10% of the population account for 1% of income, the richest 10% of Colombians – 44%.

Foreign trade turnover 24.6 billion US dollars (2002), incl. exports – 11.9 billion, imports – 12.7 billion. Main export commodities (% of total export value): oil and oil products (27.5), chemical products (9.0), coal (8.3), coffee (6.5), textiles and clothing (6.2), natural flowers (5.7), engineering products (3.5), bananas (3.4), iron-nickel ore (2.3), sugar (1.8). Imports are dominated by products of mechanical engineering (33.1), chemical (22.0) and light (12.6) industries. Main foreign trade partners: USA (41% of trade), EU countries (15%), Andean Community countries (19%, including Venezuela – 14%). The trade turnover with the Russian Federation in 2002 was 79.8 million US dollars (including exports – 46.0 million dollars).

Economy of Colombia