Colombia SA
Business
Economic Overview:
Colombia has experienced accelerating growth between 2002 and 2007, with expansion above 7% in 2007, chiefly due to advancements in domestic security, to rising commodity prices, and to President URIBE's promarket economic policies. Colombia's sustained growth helped reduce poverty by 20% and cut unemployment by 25% since 2002. Additionally, investor friendly reforms to Colombia's hydrocarbon sector and the US-Colombia Trade Promotion Agreement (CTPA) negotiations have attracted record levels of foreign investment. Inequality, underemployment,and narcotrafficking remain significant challenges, and Colombia's infrastructure requires significant updating in order to sustain expansion. Economic growth slipped in 2008 as a result of the global financial crisis and weakening demand for Colombia's exports. In response, URIBE's administration has cut capital controls, arranged for emergency credit lines from multilateral institutions, and promoted investment incentives such as Colombia's modernized free trade zone mechanism, legal stability contracts, and new bilateral investment treaties and trade agreements. The government has also encouraged exporters to diversify their customer base away from the United States and Venezuela, Colombia's largest trading partners. Nevertheless, the business sector continues to be concerned about the impact of a global recession on Colombia's exports, as well as the approval of the CTPA, which is stalled in the US Congress.
— CIA World Factbook
The Political Entanglements of Colombia's Trade Partners
From Universia-Knowledge@Wharton
Relations between Colombia and its main trading partners aren't what they are cracked up to be. Now a new friction — caused by a bilateral agreement allowing U.S. troops to use up to seven military bases in Colombia — sparked a heated debate among regional heads of state during the August 31 summit of the Union of South American Nations (or UNASUR) in Bariloche, Argentina.
For Colombia, the agreement has great significance after years of being plagued by "narcoterrorism," the phrase coined in the 1980s referring to the close collaboration between the country's drug traffickers and the Marxist-Leninist guerrillas of the Revolutionary Armed Forces of Colombia, or FARC. Colombian officials hope that the U.S.'s military presence will help it end narcoterrorism, while their American counterparts hope to stop illegal drugs from coming across its borders from southern neighbors like Colombia. But for countries such as Venezuela and Ecuador, the agreement is yet another act of U.S. interference in the region.
According to Rafael Pampillón, professor of economics at the IE Business School in Spain, the U.S. military presence will be a case of a "powerful army advanced in military strategy that can help strengthen the operational capacity of Colombian troops." Meanwhile, Ramón Guacaneme Pineda, assistant dean of EDE, the business school at Colombia's Sergio Arboleda University, sees the military presence as largely an additional deterrent, which could help bring everyone involved in the conflict to the negotiating table. "Relying on the use of arms does not resolve any problems per se," he explains. "What it does, however, is force the two sides in the conflict to [see] that the way [they have been approaching the problem] is impossible [and that] they need to try other ways of doing things."
The agreement between Bogotá and Washington, D.C., has been particularly vexing for Venezuela's president, Hugo Chávez, the leading anti-American voice among Latin American politicians who has won the support of Ecuador, Bolivia and Argentina. As Pampillón explains, Chávez would like nothing more than to extend his "Bolivarian revolution" to other parts of South America. Yet there's no avoiding the fact that Venezuela shares a border with Colombia, stoking his concerns of a military invasion by its neighbor and espionage by U.S. troops from bases in Colombia. >>>>Go to Full Story >>>
