Colombia

In the 1990s, the 40-year-old conflict between the Colombian government, the paramilitary, and the opposition spiraled. The insurgents do not have the necessary military to bring down the government yet they continue to attack civilians. Attempts have been made by the Colombian government to regain control of the country, and they now influence every municipality. Re-elected for a second term in 2006, President Alvaro Uribe has allocated more money to the military and the police, and has held discussions with far-right warlords.

Main Airports

Barranquilla (Ernesto Cortissoz) (BAQ), Bogotá (El Dorado International Airport) (BOG), Cali (Alfonso Bonilla Aragón) (CLO)

U.S. Embassy

Calle 22D Bis, No. 47-51 Bogota, Colombia
tel: (571) 315-0811

Statistics

GDP: purchasing power parity:

$337.5 billion (2005 est.)

GDP - real growth rate:

5.1% (2005 est.)

GDP - per capita: purchasing power parity:

7,900 (2005 est.)

Inflation rate (consumer prices):

5% (2005 est.)

Labor force:

20.52 million (2005)

Exports:

$19.3 billion f.o.b. (2005 est.)

Exports - partners:

US 39.1%, Venezuela 11%, Ecuador 5.3% (2005)

Imports:

$18 billion f.o.b. (2005 est.)

Imports - partners:

US 29.1%, Venezuela 7.2%, Mexico 5.8%, Brazil 5.4%, China 5%, Germany 4.6%, Japan 4.3% (2005)

Population:

43,593,035 (July 2006 est.)

Population growth rate:

1.46% (2006 est.)

Population Below Poverty Line:

49.2% (2005)

Major Industries:

textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement; gold, coal, emeralds

Employing Workers: 77*

Registering Property: 56*

Enforcing Contracts: 141*

Closing a Business: 26*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Colombia	Region
Procedures (number)	13	10.2
Time (days)	44	73.3

Colombia Risk Assessment

Country Rating

Rating: A4

A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behaviour. Corporate default probability is still acceptable on average.

Risk Assessment

GDP growth should remain relatively strong, driven by private consumption and investment, with the inflationary pressures stoked by firm domestic demand and high production capacity utilisation prompting a tightening of monetary policy. While external accounts may have deteriorated, exports are increasingly diversified, coal production has been rising, and oil production is expected to improve, as the opening for sale to the private sector of 20 per cent of the shares in Ecopetrol should allow the state-owned company to increase its investments. Foreign direct investment inflows should cover half the country's growing financing needs with borrowing in international financial markets covering the rest albeit at less favourable conditions due to the turmoil. Debt ratios, although still high compared to exports, have nonetheless been improving.

The government led by conservative president Alvaro Uribe, re-elected in May 2006, has pursued orthodox economic policy. Progress on tax reforms has, however, met with stiff resistance from the presidential coalition in parliament although they remain necessary to reduce the fiscal deficit and a still-high public debt that represented nearly 50 per cent of GDP in 2007 but whose structure and profile have, however, tended to improve.

The political and social situation is still difficult due notably to the continuing high level of insecurity despite the weakening of the FARC guerrilla movement. Revelations of ties between members of the Uribe administration and paramilitary groups have not only shaken the parliamentary majority, they have delayed ratification by the United States Congress of the free trade agreement intended to replace ATPDEA whose validity has been extended.

Corporate solvency, meanwhile, should remain satisfactory with companies meeting their payment obligations on time. Construction will remain the most dynamic sector, followed by retailing, oil and mineral extraction, telecommunications, and services.

STRENGTHS

• Colombia boasts great natural wealth, particularly agricultural and mining resources.
• The country has diversified its exports in the ATPDEA framework — the Andean Trade Promotion and Drug Eradication Act — to become the leading Andean Community manufacturing power.
• The government has pursued a policy of consolidating public finances, gradually reducing inflation and strengthening the financial sector.
• Colombia has benefited from substantial American military aid to eradicate drug production and smuggling and combat the guerrilla movement, and that aid could be partially re-directed to civil development programmes.

• The security situation is still a problem due to the presence of Latin America's largest guerrilla movement, the FARC; and the climate of violence linked to drug smuggling.
• The poverty afflicting half the population, a large wage gap, and the wide gulf between urban and rural areas have undermined the country's cohesiveness.
• To improve the public finance situation tax reforms remain necessary especially to endow public spending with greater flexibility and broaden the VAT base.
• The banking sector continues to be weakened by its exposure to sovereign risk.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation