Developments in Colombia

Updated: 14 August 2017

Colombia is an upper middle income country with a stable economic growth. The inequality in society is, however, high. The country has a long history of violence and armed conflict caused by poverty, social and economic injustices and regional differences in combination with weak or, in some cases, non-existing governmental institutions.

A strong economy with large disparities

The Colombian GDP per capita has increased to $ 7,970 in 2015, from 5,090 in 2009. However, the gap between large cities and rural areas is considerable as well as the social disparities in society. About 30 percent of the population lives in rural municipalities, but their share of the economy represents only 7 percent of the country's GDP.

Colombia has a strong and versatile economy, traditionally based on agriculture. Today, the industry is well-developed. In recent decades, large-scale exploitation of oil and coal has also been a driving force of the economy. However, development has been hampered by civil war, and drug trafficking and smuggling are ongoing in parallel with the legal economy.

In recent years, reduced violence and peace talks have contributed to strong economic growth and increased investments. The image of Colombia is changing from a state struggling with conflicts and illegal drug trade to an attractive investment and tourist destinations. In 2012, foreign direct investments amounted to a record of 15.8 billion $, almost half going into the oil and mining industry. But major challenges remain, including large income gaps, unfair landslide and lack of infrastructure. Success in the peace process is crucial for continued economic development.

Coffee, tobacco and bananas early became Colombia's major export products. A strong industrial base was built when Colombia for a long period protected its own production through high tariffs and other import barriers. In a quarter of a century until 1997, Colombia experienced economic growth, which was unique for a Latin American country. Colombia was also the only country in the region not having to go through debt settlement in the 1980's.

In the early 1990s, the trade policy was changed. Customs dropped, foreign investors received favourable trading conditions, the economy was liberalized and many large state-owned companies were sold out. Consumption increased which lead to increased growth. Inflation, which exceeded 30 percent, began two decades of steady decline.

A country characterized by conflict

Armed conflict has taken place in Colombia for more than five decades. Poverty, social and economic injustices as well as regional differences in combination with weak or, in some cases, non-existent state institutions are the root causes to the conflict.

Of Colombia's 48 million inhabitants, approximately 17 million women and men, girls and boys live in areas directly affected by conflict, corresponding to about 40 percent of Colombia's territory. Official figures show that 7.4 million people have become victims of the armed conflict since 1985. Inequality, vulnerability to natural disasters, discrimination based on gender or ethnicity, and power abuse existed already before but has worsen due to the conflict. The UN estimates that 5.8 million people are in need of humanitarian aid as a result of violence, conflict and natural disasters.

Most of the victims of the conflict are poor people living on the countryside. Women, Afro-Colombians and Indigenous people are particularly affected. The conflict does not affect the middle class or people living in big cities to the same extent. The government has stopped car bombs and other terrorist attacks that previously were common in Bogotá.

The implementation of the peace agreement will be a major challenge for actors working for peace in Colombia. The expectations and demands for rapid improvements in conflict-affected areas on the country side are high. At the same time, it is important for the civilian population to feel that peace is delivering, and that they experience less violence and increased security, and that they see gains in terms of improved community service.

Weak state presence in the countryside

Colombia is characterized by major challenges in terms of structural inequality, corruption, lack of human security and lack of respect for human rights. Inequality and gaps in socioeconomic terms are severe between different individuals, regions, ethnic groups and between men and women.

The state's presence is weak in rural areas and especially in conflict-affected areas. The inhabitants of these areas lack access to infrastructure, clean water and sanitation, as well as to health care.

In areas where the state is least present, drug production and trafficking are the most widespread. A large part of the world's coca, which is the basis for cocaine production, is grown in Colombia, and despite financial and military support from the US, the drug smuggling has not decreased. UN's Commission on Drugs and Crime UNDOC believes that the only way to reduce the production of coca is if farmers voluntarily switch to other crops. Today there are only a limited number of other ways for farmers to earn money.

At present, the widespread corruption has resulted in many necessary investments in, for example, social services and infrastructure, not being carried out, and permission to use natural resources is given in a way which is not sustainable. This can increase the risk of local conflicts.

Rule of law

Colombia's legislation and institutions are relatively well-developed, but it is lacking in implementation, especially in the conflict-affected areas.

Legal protection for human rights is strong and the country's supreme courts show a high degree of independence. However, impunity is extensive and it has been difficult to get convictions for the many serious human rights violations committed by both the state and the guerrillas. However, the judicial system has demonstrated independence and strength in the processes following the disclosure of politicians' cooperation with the paramilitaries, in which a large number of congressmen have been convicted to long prison sentences.

Page owner: Department for Europe and Latin America

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