PROJECT REPORT

COUNTRY ANALYSIS:

REPUBLIC OF COLUMBIA

Submitted To:
Sir Nabeel Younas

Submitted By:
JIBRAN KHAN TAREEN 142001
SABTAIN RAZA 142014

BBA BATCH
2014-2018
AIR UNIVERSITY
MULTAN
GEOGRAPHICAL MAP OF COLOMBIA

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CONTENTS

INTRODUCTION: ................................................................................................................................3
GEOGRAPHY: .....................................................................................................................................5
GEOGRAPHICAL STATS: ............................................................................................................................. 5
GEOPOLITICAL IMPORTANCE: ................................................................................................................... 6
POLITICAL INFORMATION: .................................................................................................................6
POLITICAL STRUCTURE: ............................................................................................................................. 6
POLITICAL STABILITY: ................................................................................................................................ 7
INTERNATIONAL RELATIONS: .................................................................................................................... 7
ECONOMIC ANLAYSIS: ........................................................................................................................8
MACROECONOMIC PERFORMANCE INDICATORS: ................................................................................... 8
TRADE PERFORMANCE: ............................................................................................................................ 9
MAIN ECONOMIC SECTOR PERFORMANCE: ........................................................................................... 10
AGRICULTURAL SECTOR: ............................................................................................................ 10
INDUSTRIAL SECTOR: ................................................................................................................... 11
PRODUCTION & RESOURCE STRUCTURE:

INVESTMENT: .......................................................................................................................................... 15
MAJOR RESOURCES: ............................................................................................................................... 16
MAJOR COMPANIES: ............................................................................................................................... 17
HUMAN CAPITAL: ............................................................................................................................ 17
EMERGING BUSINESSES IN COLOMBIA: ............................................................................................ 17
POTENTIAL BUSINESS OPPORTUNITIES .................................................................................................. 18
CONCLUSION: COLOMBIA, AN EMERGING MARKET? ......................................................................... 19

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 REPUBLIC OF COLOMBIA

INTRODUCTION:

The name "Colombia" is derived from the last name of Christopher Columbus. It was conceived by the
Venezuelan revolutionary Francisco de Miranda as a reference to all the New World, but especially to
those portions under Spanish and Portuguese rule.
The name was later adopted by the Republic of Colombia of 1819, formed from the territories of the old
Viceroyalty of New Granada (modern-day Colombia, Panama, Venezuela, Ecuador, and northwest
Brazil).
Colombia was one of the three countries that emerged after the dissolution of Gran Colombia in 1830 (the
others are Ecuador and Venezuela). A decades-long conflict between government forces and anti-
government insurgent groups, principally the Revolutionary Armed Forces of Colombia (FARC) heavily
funded by the drug trade, escalated during the 1990s.
More than 31,000 former paramilitaries demobilized by the end of 2006 and the United Self Defense
Forces of Colombia as a formal organization ceased to operate. In the wake of the paramilitary
demobilization, organized criminal groups arose, whose members include some former paramilitaries.
After four years of formal peace negotiations, the Colombian Government signed a revised final peace
accord with the FARC in November 2016, which was subsequently ratified by the Colombian Congress.
The accord calls for members of the FARC to demobilize, disarm, and reincorporate into society and
politics, and it creates an alternative system for transitional justice that includes a “Special Jurisdiction for
Peace” to address accountability for conflict-related crimes and established truth-telling mechanisms.
The Colombian Government has stepped up efforts to reassert government control throughout the
country, and now has a presence in every one of its administrative departments. Despite decades of
internal conflict and drug related security challenges, Colombia maintains relatively strong democratic
institutions characterized by peaceful, transparent elections and the protection of civil liberties.
Colombia is a sovereign state largely situated in the northwest of South America, with territories in
Central America. Colombia shares a border to the northwest with Panama, to the east with Venezuela and
Brazil and to the south with Ecuador and Peru.
It shares its maritime limits with Costa Rica, Nicaragua, Honduras, Jamaica, Haiti and the Dominican
Republic. It is a unitary, constitutional republic comprising thirty-two departments. The territory of what
is now Colombia was originally inhabited by indigenous peoples, including the Muisca, Quimbaya and
the Tairona.

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ETHNIC GROUPS AND RELIGIONS:
Colombia is in the midst of a demographic transition resulting from steady declines in its fertility,
mortality, and population growth rates. The birth rate has fallen from more than 6 children per woman in
the 1960s to just above replacement level today as a result of increased literacy, family planning services,
and urbanization. However, income inequality is among the worst in the world, and more than a third of
the population lives below the poverty line.
Colombia experiences significant legal and illegal economic emigration and refugee outflows. Large-
scale labor emigration dates to the 1960s; the United States and, until recently, Venezuela have been the
main host countries.
Emigration to Spain picked up in the 1990s because of its economic growth, but this flow has since
diminished because of Spain’s ailing economy and high unemployment. Colombia has been the largest
source of Latin American refugees in Latin America, nearly 400,000 of who live primarily in Venezuela
and Ecuador.
Forced displacement continues to be prevalent because of violence among guerrillas, paramilitary groups,
and Colombian security forces. Afro-Colombian and indigenous populations are disproportionately
affected.
Even with the Colombian Government’s December 2016 ‘peace agreement’ with the Revolutionary
Armed Forces of Colombia (FARC), the risk of displacement remains as other rebel groups fill the void
left by the FARC. Between 1985 and September 2017, nearly 7.6 million persons have been internally
displaced, the highest total in the world. These estimates may undercount actual numbers because many
internally displaced persons are not registered.
Historically, Colombia also has one of the world’s highest levels of forced disappearances. About 30,000
cases have been recorded over the last four decades—although the number is likely to be much higher—
including human rights activists, trade unionists, Afro-Colombians, indigenous people, and farmers in
rural conflict zones.

ETHNIC GROUPS

Mestizo and Whites: 84.2%,

Afro-Colombians: 10.4%

Amerindian: 3.4%

Romani: < 0.01

Unspecified: 2.1% (est. 2016)

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RELIGIONS:

Roman Catholic 79%

Protestant 14%

(Includes Pentecostal 6%, Mainline Protestant 2%, and other 6%),

Other 2%

Unspecified 5% (est. 2016)

GEOGRAPHY:

Location: Northern South America, bordering the Caribbean Sea, between Panama and
Venezuela, and bordering the North Pacific Ocean, between Ecuador and
Panama
Area: Total: 1,138,910 sq. km
Land: 1,038,700 sq. km
Water: 100,210 sq. km

GEOGRAPHICAL STATS:

Land Boundaries: Total: 6,672 km

Border Countries: Brazil 1,790 km,
Ecuador 708 km,
Panama 339 km,
Peru 1,494 km,
Venezuela 2,341 km
Coastline: 3,208 km (Caribbean Sea 1,760 km, North Pacific Ocean 1,448 km)
Elevation: Mean elevation: 593 m
Elevation Extremes: Lowest point: Pacific Ocean 0 m
Highest point: Pico Cristobal Colon 5,730 m
Natural Resources: Petroleum, Natural gas, Coal, Iron Ore, Nickel, Gold, Copper, Emeralds,
Hydropower.

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Land Use: Agricultural land: 37.5% , Arable Land 1.4%, Permanent crops 1.6%,
Permanent Pasture: 34.5%, Forest: 54.4%, Other: 8.1% (2011 EST.)
Irrigated Land: 10,900 sq. km (2012)

GEOPOLITICAL IMPORTANCE:

Colombia offers quite beneficial opportunities in terms of transport methods for commodities to and from
the other passage ways of the world, some of the statistics regarding its geopolitical importance are as
follows:
Waterways: 24,725 km (18,300 km navigable; the most important waterway, the River
Magdalena, of which 1,488 km is navigable, is dredged regularly to ensure safe
passage of cargo vessels and container barges) (2012)
Merchant Marine: Total: 12
(by type): Cargo: 9, Chemical Tanker: 1, Petroleum Tanker: 2
Ports and Terminals: Atlantic Ocean (Caribbean) - Cartagena, Santa Marta, Turbo;
Pacific Ocean - Buenaventura
River Port: Barranquilla (Rio Magdalena)
Oil Terminal: Covenas Offshore Terminal
Dry Bulk Cargo Port: Puerto Bolivar (coal)
Container Port (TEUs): Cartagena (1,853,342)

POLITICAL INFORMATION:

POLITICAL STRUCTURE:

EXECUTIVE BRANCH:
CHIEF OF THE STATE: President Juan Manuel SANTOS Calderon (since 7 August 2010);
Vice President Ret. Gen. Oscar Adolfo NARANJO Trujillo (since 30
March 2017); Vice President German VARGAS Lleras' resignation on 15 March 2017
became effective on 21 March 2017;
The president is both chief of state and head of government.
HEAD OF THE GOVT.: President: Juan Manuel SANTOS Calderon (since 7 August 2010);
Vice President: Ret. Gen. Oscar Adolfo NARANJO Trujillo (since 30
March 2017)
CABINET: Cabinet appointed by the president

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ELECTIONS: President directly elected by absolute majority vote in 2 rounds if needed
for a 4-year term; election last held on 25 May 2014 with a runoff held
on 15 June 2014 (next to be held on 27 May 2018);
Note - Recent political reform eliminated presidential reelection; beginning in 2018, presidents
can only serve one 4-year term

POLITICAL STABILITY:

The government of Colombia takes place within the framework of a presidential participatory democratic
republic as established in the Constitution of 1991. In accordance with the principle of separation of
powers, government is divided into three branches: the executive branch, the legislative branch and the
judicial branch.
As the head of the executive branch, the President of Colombia serves as both head of state and head of
government, followed by the Vice President and the Council of Ministers.
The president is elected by popular vote to serve four-year term (In 2015, Colombia's Congress approved
the repeal of a 2004 constitutional amendment that eliminated the one-term limit for presidents).
At the provincial level executive power is vested in department governors, municipal mayors and local
administrators for smaller administrative subdivisions, such as corregimientos or comunas.
All regional elections are held one year and five months after the presidential election.
The legislative branch of government is represented nationally by the Congress, a bicameral institution
comprising a 166-seat Chamber of Representatives and a 102-seat Senate.
The Senate is elected nationally and the Chamber of Representatives is elected in electoral districts.
Members of both houses are elected to serve four-year terms two months before the president, also by
popular vote

INTERNATIONAL RELATIONS:

The foreign affairs of Colombia are headed by the President, as head of state, and managed by the
Minister of Foreign Affairs. Colombia has diplomatic missions in all continents.
Colombia was one of the 4 founding members of the Pacific Alliance, which is a political, economic and
co-operative integration mechanism that promotes the free circulation of goods, services, capital and
persons between the members, as well as a common stock exchange and joint embassies in several
countries.
Colombia is also a member of the United Nations, the World Trade Organization, the Organization of
American States, the Organization of Ibero-American States, the Union of South American Nations and
the Andean Community of Nations.
Colombia is a global partner of NATO. Colombia is currently in the accession process with the OECD.
Since the early 2010s, the Colombian government has shown interest in exporting modern Colombian pop
culture to the world (which includes video games, music, movies, TV shows, fashion, cosmetics, and
food) as a way of diversifying the economy and entirely changing the image of Colombia; a national
campaign similar to the Korean Wave.

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In the Hispanic world, Colombia is only behind Mexico in cultural exports and is already a regional
leader in cosmetic and beauty exports

ECONOMIC ANLAYSIS:

Colombia’s economy benefits from free trade and sound fiscal policies but it has slowed in 2016 because
of falling global oil prices, a strong dollar, and moderate inflation. Colombia heavily depends on energy
and mining exports, making it vulnerable to a drop in commodity prices.
Colombia is the world's fourth largest coal exporter, the world’s second largest coffee and cut flowers
exporter, and Latin America’s fourth largest oil producer. Economic development is hampered by
inadequate infrastructure, poverty, narcotic trafficking, and an uncertain security situation.

MACROECONOMIC PERFORMANCE INDICATORS:

Real GDP: US$ 863.4 billion

GDP (official exchange rate):
GDP - real growth rate:
GDP - per capita (PPP):
Gross National Saving:
GDP – Composition:
$282.4 billion (2016 est.)
2% (2016 est.)
3.1% (2015 est.)
4.4% (2014 est.)
$14,100 (2016 est.)
$14,000 (2015 est.)
$13,800 (2014 est.)
21% of GDP (2016 est.)
20.3% of GDP (2015 est.)
21.1% of GDP (2014 est.)
Household consumption: 62.8%
Government consumption: 18.4%
Investment in fixed capital: 25.3%
Investment in inventories: 0.2%
Exports of goods and services: 14.1%
Imports of goods and services: -20.6% (2016 est.)

GDP - Composition, by Sector: Agriculture: 7.1%

Industry: 32.6%
Services: 60.3% (2016 est.)

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Industrial Growth Rate: 0.6% (2016 est.)
Labor Force: 24.41 million (2016 est.)
Labor Force - by Occupation: Agriculture: 17%
Industry: 21%
Services: 62% (2011 est.)
Unemployment Rate: 9.2% (2016 est.)
8.9% (2015 est.)
Population below Poverty Line: 27.8% (2015 est.)
Budget: Revenues: $75.9 billion
Expenditures: $82.73 billion (2016 est.)
Tax Revenues: 26.9% of GDP (2016 est.)
Public Debt: 52% of GDP (2016 est.)
50.2% of GDP (2015 est.)

TRADE PERFORMANCE:

Agriculture - products: coffee, cut flowers, bananas, rice, tobacco, corn, sugarcane,
cocoa beans, oilseed, vegetables; shrimp; forest products
Industries: Textiles, food processing, oil, clothing and footwear, beverages,
chemicals, cement; gold, coal, emeralds
Exports: $33.38 billion (2016 est.)
$38.28 billion (2015 est.)
Exports - Commodities: Petroleum, Coal, Emeralds, Coffee, Nickel, Cut Flowers,
Bananas, Apparel.
Exports - Partners: US: 33.5%, Panama: 6.3% (2016)
Imports: $43.24 billion (2016 est.)
$52.05 billion (2015 est.)
Imports - Commodities: Industrial equipment, Transportation equipment, Consumer
goods, Chemicals, Paper products, Fuels, Electricity.
Imports - Partners: US: 26.4%, China: 19.1%, Mexico: 7.5%, Brazil: 4.7% (2016)
Gold Reserve Foreign Exchange: $46.18 billion (31 December 2016 EST.)
$46.22 billion (31 December 2015 EST.)

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MAIN ECONOMIC SECTOR PERFORMANCE:

Historically an agrarian economy, Colombia urbanized rapidly in the 20th century, by the end of which
just 15.8% of the workforce were employed in agriculture, generating just 6.8% of GDP; 19.6% of the
workforce were employed in industry and 64.6% in services, responsible for 34.0% and 59.2% of GDP
respectively.
The country's economic production is dominated by its strong domestic demand. Consumption
expenditure by households is the largest component of GDP.

GDP COMPOSITION BY SECTOR:

Agriculture: 07.1%
Industry: 32.4%
Services: 60.5%
PERCENTAGE OF LABOR FORCE EMPLOYED BY EACH SECTOR:
Agriculture: 17.5%
Industry: 22.6%
Services: 62.9%

AGRICULTURAL SECTOR:
The share of agriculture in GDP has fallen consistently since 1945, as industry and services have
expanded. However, Colombia’s agricultural share of GDP decreased during the 1990s by less than in
many of the world’s countries at a similar level of development, even though the share of coffee in GDP
diminished in a dramatic way.
Agriculture has nevertheless remained an important source of employment, providing a fifth of
Colombia's jobs in 2006.
The most industrially diverse member of the five-nation Andean Community, Colombia has four major
industrial centers—Bogota, Medellin, Cali, and Barranquilla, each located in a distinct geographical
region.
Colombia's industries include textiles and clothing, particularly lingerie, leather products, processed foods
and beverages, paper and paper products, chemicals and petrochemicals, cement, construction, iron and
steel products, and metalworking.
Its diverse climate and topography permit the cultivation of a wide variety of crops. In addition, all
regions yield forest products, ranging from tropical hardwoods in the hot country to pine and eucalyptus
in the colder areas.
Cacao beans, sugarcane, coconuts, bananas, plantains, rice, cotton, tobacco, cassava, and most of the
nation's beef cattle are produced in the hot regions from sea level to 1,000 meters elevation.
The temperate regions—between 1,000 and 2,000 meters—are better suited for coffee; cut flowers; maize
and other vegetables; and fruits such as citrus, pears, pineapples, and tomatoes.

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The cooler elevations—between 2,000 and 3,000 meter—produce wheat, barley, potatoes, cold-climate
vegetables, flowers, dairy cattle, and poultry
Irrigated Land: 10,900 sq km (2012)

Population - Distribution:
The majority of people live in the north and west where agricultural opportunities and natural resources
are found; the vast grasslands of the llanos to the south and east, which make up approximately 60% of
the country, are sparsely populated.
Natural Hazards:
Highlands subject to volcanic eruptions; occasional earthquakes; periodic droughts
AGRICULTURE:
Illicit producer of Coca, Opium Poppy, and Cannabis; world's leading coca cultivator with 159,000
hectares in coca cultivation in 2015, a 42% increase over 2014, producing a potential of 495 Metric Tons
of pure cocaine; the world's largest producer of coca derivatives; supplies cocaine to nearly all of the US
market and the great majority of other international drug markets.
In 2016, the Colombian government reported manual eradication of 17,642 hectares; Colombia suspended
aerial eradication in October 2015 making 2016 the first full year without aerial eradication; a significant
portion of narcotics proceeds are either laundered or invested in Colombia through the black market peso
exchange.
Colombia probably remains the second largest supplier of heroin to the US market; opium poppy
cultivation was estimated to be 1,100 hectares in 2015, sufficient to potentially produce three metric tons
of pure heroin.

INDUSTRIAL SECTOR:
Petroleum is Colombia's main export, making over 45% of Colombia's exports. Manufacturing makes up
nearly 12% of Colombia's exports, and grows at a rate of over 10% a year.
Colombia has the fastest growing information technology industry in the world and has the longest fiber
optic network in Latin America.
Colombia also has one of the largest shipbuilding industries in the world outside Asia.
Colombia over the last decade has experienced a historic economic boom. In 1990, Colombia was Latin
America's 5th Largest economy and had a GDP per capita of only US$1,500, by 2015 it became the 4th
largest in Latin America, and the world's 31st largest.
As of 2015 the GDP (PPP) per capita has increased to over US$14,000, and GDP (PPP) increased from
US$120 billion in 1990 to nearly US$700 billion.
Poverty levels were as high as 65% in 1990, but decreased to fewer than 24% by 2015.

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Modern industries like shipbuilding, electronics, automobile, tourism, construction, and mining, grew
dramatically during the 2000s and 2010s, however, most of Colombia's exports are still commodity-
based.
Colombia is Latin America's 2nd-largest producer of domestically-made electronics and appliances only
behind Mexico. Colombia had the fastest growing major economy in the western world in 2014, behind
only China worldwide.

CONSUMER ELECTRONICS AND HOME APPLIANCES:

Although Colombia has been producing domestic appliances since the 1930s, it wasn't until the late 1990s
that Colombian corporations began exporting to neighboring countries.
One of Colombia's largest producers of domestic appliances, HACEB has been producing refrigeration
since 1940. Some domestic corporations include: Challenger, Kalley, HACEB, Imusa, and Landers. In
2011, Groupe SEB acquired Imusa as a form to expand to the Latin American market.
Colombia also manufacturers for foreign companies as well, such as Whirlpool and GE. LG has also
been interested in building a plant in Colombia. Colombia is also Latin America's 3rd largest producer of
appliances behind Mexico and Brazil and is growing rapidly.

MINING AND ENERGY:

Colombia is well-endowed with minerals and energy resources. It has the largest coal reserves in Latin
America, and is second to Brazil in hydroelectric potential.
Estimates of petroleum reserves in 1995 were 3.1 billion barrels (490,000,000 m3). It also possesses
significant amounts of nickel, gold, silver, platinum, and emeralds.
The discovery of 2 billion barrels (320,000,000 m3) of high-quality oil at the Cusiana and Cupiagua
fields, about 200 kilometers (120 mi) east of Bogotá, has enabled Colombia to become a net oil exporter
since 1986. The Transandino pipeline transports oil from Orito in the Department of Putumayo to the
Pacific port of Tumaco in the Department of Nariño.
Total crude oil production averages 620 thousand barrels per day (99,000 m3/d); about 184 thousand
barrels per day (29,300 m3/d) is exported. The Pastrana government has significantly liberalized its
petroleum investment policies, leading to an increase in exploration activity. Refining capacity cannot
satisfy domestic demand, so some refined products, especially gasoline, must be imported.
The consequences of the drought on electricity-generating capacity caused the government to commission
the construction or upgrading of 10 thermoelectric power plants. Half will be coal-fired, and half will be
fired by natural gas.
The government also has begun awarding bids for the construction of a natural gas pipeline system that
will extend from the country's extensive gas fields to its major population centers. Plans call for this
project to make natural gas available to millions of Colombian households by the middle of the next
decade.

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PETROLEUM INDUSTRY:
The petroleum and natural gas coal mining, chemical, and manufacturing industries attract the greatest
U.S. investment interest. U.S. investment accounted for 37.8% ($4.2 billion) of the total $11.2 billion in
foreign direct investment at the end of 1997, excluding petroleum and portfolio investment.
Worker rights and benefits in the U.S.-dominated sectors are more favorable than general working
conditions. Examples include shorter-than-average working hours, higher wages, and compliance with
health and safety standards above the national average.

TRANSPORT:
Colombia was a pioneer in promoting airlines in an effort to overcome its geographic barriers to
transportation. The Colombian Company of Air Navigation, formed in 1919, was the second commercial
airline in the world. It was not until the 1940s that Colombia's air transportation began growing
significantly in the number of companies, passengers carried, and kilometers covered.
In 1993 the construction, administration, operation, and maintenance of the main airports transferred to
departmental authorities and the private sector, including companies specializing in air transportation.
Within this process, in 2006 the International Airport Operator (Opain), a Swiss-Colombian consortium,
won the concession to manage and develop Bogotá’s El Dorado International Airport.
El Dorado is the largest airport in Latin America in terms of cargo traffic (33rd worldwide), with 622,145
metric tons in 2013, second in terms of traffic movements (45th worldwide) and third in terms of
passengers (50th among the busiest airports in the world).
In addition to El Dorado, Colombia’s international airports are Palo Negro in Bucaramanga, Simón
Bolívar in Santa Marta, Cortissoz in Barranquilla, Rafael Núñez in Cartagena, José María Córdova in
Rionegro near Medellín, Alfonso Bonilla Aragón in Cali, Alfredo Vásquez Cobo in Leticia, Matecaña in
Pereira, Gustavo Rojas Pinilla in San Andrés, and Camilo Daza in Cúcuta.
In 2006 Colombia was generally reported to have a total of 984 airports, of which 103 had paved runways
and 883 were unpaved. The Ministry of Transportation listed 581 airports in 2007, but it may have used a
different methodology for counting them.

COMMUNICATION:
Colombia's geography, with three cordilleras of the Andes running up the country from south to north,
and jungle in the Amazon and Darién regions, represents a major obstacle to the development of national
road networks with international connections.
Thus, the basic nature of the country's transportation infrastructure is not surprising. In the spirit of the
1991 constitution, in 1993 the Ministry of Public Works and Transportation was reorganized and renamed
the Ministry of Transportation. In 2000 the new ministry strengthened its role as the planner and regulator
within the sector.

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Telephones - fixed lines:
Total subscriptions: 7,115,984
Subscriptions per 100 inhabitants: 15 (July 2016 est.)
Telephones - mobile cellular:
Total: 58,684,924
Subscriptions per 100 inhabitants: 124 (July 2016 est.)
Internet users: Total: 27,452,550
Percent of Population: 58.1% (July 2016 est.)

TOURISM SECTOR:
Tourism in Colombia is an important sector in the country's economy. Colombia has major attractions as
a tourist destination, such as Cartagena and its historic surroundings, which are on the UNESCO World
Heritage List; the insular department of San Andrés, Providencia y Santa Catalina; Santa Marta,
Cartagena and the surrounding area.
Fairly recently, Bogotá, the nation's capital, has become Colombia's major tourist destination because of
its improved museums and entertainment facilities and its major urban renovations, including the
rehabilitation of public areas, the development of parks, and the creation of an extensive network of
cycling routes. With its very rich and varied geography, which includes the Amazon and Andean regions,
the llanos, the Caribbean and Pacific coasts, and the deserts of La Guajira, and its unique biodiversity,
Colombia also has major potential for ecotourism.
The direct contribution of Travel & Tourism to GDP in 2013 was COP 11,974.3 bn (1.7% of GDP). This
is forecast to rise by 7.4% to COP 12,863.4 bn in 2014. This primarily reflects the economic activity
generated by industries such as hotels, travel agents, airlines and other passenger transportation services
(excluding commuter services). But it also includes, for example, the activities of the restaurant and
leisure industries directly supported by tourists.
The direct contribution of Travel & Tourism to GDP is expected to grow by 4.1% pa.

FINANCIAL SECTOR:

Budget: Revenues: $75.9 billion

Expenditures: $82.73 billion (2016 est.)
Taxes & other Revenues: 26.9% of GDP (2016 est.)
Budget surplus (+) or deficit (-): -2.4% of GDP (2016 est.)
Public debt: 52% of GDP (2016 est.)

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 50.2% of GDP (2015 est.)
Country comparison to the world: 94
Fiscal year: Calendar year
Inflation rate (consumer prices): 7.5% (2016 est.)
5% (2015 est.)
Central bank discount rate: 7.5% (31 December 2016)
6.5% (31 December 2014)
Commercial bank lending rate: 14.65% (31 December 2016 est.)
11.45% (31 December 2015 est.)
Stock of domestic credit: $153.1 billion (31 December 2016 est.)
$133.8 billion (31 December 2015 est.)
Market value of publicly traded shares: $85.96 billion (31 December 2015 est.)
$146.7 billion (31 December 2014 est.)
$202.7 billion (31 December 2013 est.)
Current account balance: $-12.24 billion (2016 est.)
$-18.64 billion (2015 est.)
Stock of direct foreign investment - at home: $164.3 billion (31 December 2016 est.)
$149.2 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad: $51.82 billion (31 December 2016 est.)
$47.3 billion (31 December 2015 est.)
Exchange rates: Colombian pesos (COP) per US dollar 3,055.3 (2016 est.)
3,055.3 (2015 est.)
2,001 (2014 est.)
2,001.1 (2013 est.)
1,798 (2012 est.)

INVESTMENT:

In 1990, to attract foreign investors and promote trade, an experiment from the International Monetary
Fund known as "La Apertura" was adopted by the government as an open trade strategy. Although the
analyses of the result aren’t clear, the fact is that the agricultural sector was severely impacted by this
policy.

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FOREIGN INVESTMENT:
In 1991 and 1992, the government passed laws to stimulate foreign investment in nearly all sectors of the
economy. The only activities closed to foreign direct investment are defense and national security,
disposal of hazardous wastes, and real estate—the last of these restrictions is intended to hinder money
laundering.
Colombia established a special entity—Converter—to assist foreigners in making investments in the
country. Foreign investment flows for 1999 were $4.4 billion, down from $4.8 billion in 1998.
Major foreign investment projects underway include the $6 billion development of the Cusiana and
Cupiagua oil fields, development of coal fields in the north of the country, and the recently concluded
licensing for establishment of cellular telephone service.
The United States accounted for 26.5% of the total $19.4 billion stock of non-petroleum foreign direct
investment in Colombia at the end of 1998.

PRODUCTION & RESOURCE STRUCTURE:

Colombia is the United States' fifth-largest export market in Latin America—behind Mexico, Brazil,
Venezuela, and Argentina—and the 26th-largest market for U.S. products worldwide.
The United States is Colombia's principal trading partner, with two-way trade from November 1999
through November 2000 exceeding $9.5 billion--$3.5 billion U.S. exports and $6.0 billion U.S. imports.
Colombia benefits from duty-free entry—for a 10-year period, through 2001—for certain of its exports to
the United States under the Andean Trade Preferences Act.
Colombia improved protection of intellectual property rights through the adoption of three Andean Pact
decisions in 1993 and 1994, but the U.S. remains concerned over deficiencies in licensing, patent
regulations, and copyright protection.

MAJOR RESOURCES:

PETROLEUM AND NATURAL GAS:

The petroleum and natural gas coal mining, chemical, and manufacturing industries attract the greatest
U.S. investment interest. U.S. investment accounted for 37.8% ($4.2 billion) of the total $11.2 billion in
foreign direct investment at the end of 1997, excluding petroleum and portfolio investment.
Worker rights and benefits in the U.S.-dominated sectors are more favorable than general working
conditions. Examples include shorter-than-average working hours, higher wages, and compliance with
health and safety standards above the national average
Refined petroleum products - production: 362,100 bbl/day (2014 est.)
Refined petroleum products - consumption: 345,000 bbl/day (2015 est.)
Refined petroleum products - exports: 83,920 bbl/day (2014 est.)

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Refined petroleum products - imports: 95,790 bbl/day (2014 est.)
Natural gas - production: 11.91 billion cu m (2015 est.)
Natural gas - consumption: 18.82 billion cu m (2015 est.)
Natural gas - exports: 400 million cu m (2015 est.)
Natural gas - imports: 0 cu m (2013 est.)
Natural gas - proved reserves: 123.5 billion cu m (1 January 2017)

MINERALS:
Colombia also possesses significant amounts of nickel, gold, silver, platinum, and emeralds.
MAJOR COMPANIES:

HUMAN CAPITAL:

Labor Force: 24.41 million (2016 est.)

Labor Force - by occupation: Agriculture: 17%
Industry: 21%
Services: 62% (2011 est.)
Unemployment rate: 9.2% (2016 est.)
8.9% (2015 est.)
Population Below Poverty Line: 27.8% (2015 est.)

EMERGING BUSINESSES IN COLOMBIA:

Former president Álvaro Uribe (elected 7 August 2002) introduced several economic reforms, including
measures designed to reduce the public-sector deficit below 2.5% of GDP in 2004.
The government's economic policy and democratic security strategy have engendered a growing sense of
confidence in the economy, particularly within the business sector, and GDP growth in 2003 was among
the highest in Latin America, at over 4%.
This growth rate was maintained over the next decade, averaging 4.8% from 2004 to 2014.
The government is supporting the development of ethanol production.
The tourism industry is small but growing rapidly

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POTENTIAL BUSINESS OPPORTUNITIES

Economic growth reached 3.1% during 2000 and inflation was 9.0% although unemployment has yet to
significantly improve however the Ex-Leader of the republic side is making a significant change to ensure
the country gets employment back up to a figure where the economy and the people are all happy.
Colombia's international reserves have remained stable at around $8.35 billion, and Colombia has
successfully remained in international capital markets. Colombia's total foreign debt at the end of 1999
was $34.5 billion with $14.7 billion in private sector and $19.8 billion in public sector debt.
Major international credit rating organizations have dropped Colombian sovereign debt below investment
grade, primarily as a result of large fiscal deficits, which current policies are seeking to close

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CONCLUSION: COLOMBIA, AN EMERGING MARKET?

Colombia's economy has experienced rapid increase over the past three years despite a serious armed
conflict. The economy continues to grow in part because of government budgets, focused efforts to
reduce public debt levels, an export-oriented growth strategy, an improved security situation in the
country, and high commodity prices.
Ongoing economic problems facing President Uribe range from reforming the pension system to
reducing high unemployment, and to achieving congressional passage of a fiscal transfer’s reform.
New exploration is needed to offset declining oil production. This is soon to be Colombia’s golden ticket
to be a major force in the global market as further oil reserves near the Capital of Bogota are being
discovered and will help the economy boom in coming years.
International and domestic financial analysts note with concern the growing central government deficit,
which hovers at 5% of GDP. However, the government's economic policy and democratic security
strategy have engendered a growing sense of confidence in the economy, particularly within the business
sector.
Given the resolving of the Drug-Trade Conflict is crucial to Colombia’s confidence in investors but also
the increasing illegal immigrant may provide opportunity for growth in terms of domestic labor.
Colombia's relatively high unemployment rate of 10.4%, though much improved since the recession,
threatens stability and long-term economic growth.
The security environment in Colombia improved drastically under the presidency of Alvaro Uribe from
2002 to 2010. The current president, Juan Manuel Santos, is similarly committed to a strong security
policy.
At the same time, the Drug Trade and the Marxist rebel insurgency are still alive in the country and
present risk, though considerably less than in the past. The government is currently engaged in peace talks
with the largest insurgent group, the Revolutionary Armed Forces of Colombia, or FARC.
In the past year 2016, the Colombian peso has fallen in value more than 12% against the dollar.
Last month, Colombian central bank Governor Jose Dario Uribe described the devaluation as a positive,
signaling that the bank would not intervene to stall the peso's decline.
The President states that a weaker peso could spur growth in the country's export industries and decrease
the notoriously high unemployment rate. On the other hand, the devalued peso might be discouraging to
foreign investors who could see any gains eaten up by a falling exchange rate.

THE END

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