What is the economy of Colombia like?
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- 1 decade agoFavorite Answer
The economy of Colombia has improved significantly in the past few years (2004-2008), even though the world recession is currently affecting it. The economy grew fast due to the stability and increase security conditions from the new Uribe administration. The guerrilla is now limited to very small regions and the Uribe goverment has increased security so much that people can travel between most large cities, something that was nearly impossible a few years back. Inflation, a dragon that in the past ate up the savings of its people, has been also under control, thanks to good policies by its Central Bank.
Its economy is mostly based of mining, extraction and production of commodities and energy such as natural gas, oil, metals, etc. Tourism and other services have also been growing.Source(s): www.imf.org http://www.banrep.gov.co/
- southhotspicieLv 41 decade ago
In spite of the difficulties presented by serious internal armed conflict, Colombia's economy grew steadily in the latter part of the twentieth century, with gross domestic product (GDP) increasing at an average rate of over 4% per year between 1970 and 1998. The country suffered a recession in 1999 (the first full year of negative growth since the Great Depression), and the recovery from that recession was long and painful. However, in recent years growth has been impressive, reaching 8.2% in 2007, one of the highest rates of growth in Latin America. Meanwhile the Colombian stock exchange climbed from 1,000 points at its creation in July 2001 to over 7,300 points by November 2008.
According to International Monetary Fund estimates, in 2007 Colombia's nominal GDP was US$202.6 billion (37th in the world and fourth in South America). Adjusted for purchasing power parity, GDP per capita stands at $7,968, placing Colombia 82nd in the world. However, in practice this is relatively unevenly distributed among the population, and, in common with much of Latin America, Colombia scores poorly according to the Gini coefficient, with UN figures placing it 119th out of 126 countries. In 2003 the richest 20% of the population had a 62.7% share of income/consumption and the poorest 20% just 2.5%, and 17.8% of Colombians live on less than $2 a day. Government spending is 37.9% of GDP. Almost a quarter of this goes towards servicing the country's relatively high government debt, estimated at 52.8% of GDP in 2007. Other problems facing the economy include weak domestic and foreign demand, the funding of the country's pension system, and unemployment (10.8% in November 2008). Inflation has remained relatively low in recent years, standing at 5.5% in 2007.
Plantation of Colombian coffee, Quindio. Coffee is Colombia's main agricultural export.Historically an agrarian economy, Colombia urbanised rapidly in the twentieth century, by the end of which just 22.7% of the workforce were employed in agriculture, generating just 11.5% of GDP. 18.7% of the workforce are employed in industry and 58.5% in services, responsible for 36% and 52.5% of GDP respectively. Colombia is rich in natural resources, and its main exports include petroleum, coal, coffee and other agricultural produce, and gold. Colombia is also known as the world's leading source of emeralds, while over 70% of cut flowers imported by the United States are Colombian. Principal trading partners are the United States (a controversial free trade agreement with the United States is currently awaiting approval by the United States Congress), Venezuela and China. All imports, exports, and the overall balance of trade are at record levels, and the inflow of export dollars has resulted in a substantial re-valuation of the Colombian peso.
Economic performance has been aided by liberal reforms introduced in the early 1990s and continued during the current presidency of Álvaro Uribe, whose policies include measures designed to bring the public sector deficit below 2.5% of GDP. In 2008, the Heritage Foundation assessed the Colombian economy to be 61.9% free, an increase of 2.3% since 2007, placing it 67th in the world and 15th out of 29 countries within the region. Meanwhile the improvements in security resulting from President Uribe's controversial "democratic security" strategy have engendered an increased sense of confidence in the economy. On 28 May 2007 the American magazine BusinessWeek published an article naming Colombia "the most extreme emerging market on Earth".[32Source(s): proud to be Colombian,wikipedia