Colombia at a Glance
Working in Colombia
Colombia is the fourth largest economy in South America. Despite the well-known and at times harsh blows of the global economic downturns at the end of the past decade, the country has managed to maintain positive growth figures during turbulent times, and has overshadowed the average economic growth of the region and continent for years with ease. This fact, combined with the nation’s policy of establishing free trade agreements and FTZ throughout its territory, has led to strong foreign investments in recent years, particularly in some of Colombia’s strongest sectors – oil and gas.
While Colombia displays the typical GDP composition of developed countries with a dominant tertiary sector, industry still plays a major role for the national economy, with some 38% of the total economic output generated in this sector. Main pillars of the Colombian industrial sector include a very strong textile and clothing industry (with Medellín being the top destination in this regard) and a highly developed chemical and pharmaceutical sector. However, the mining industry is one of the main driving forces in the secondary sector. Abundance of natural resources is one of the strengths of the nation, and it boasts a wide range of export goods in this regard:
- Coal (4th largest exporter worldwide)
- Oil (4th largest producer in Latin America)
Historically an agricultural country, the primary sector remains one of the main pillars of the Colombian economy even today, with a GDP contribution of just below 7%. The country is among the top producers of coffee, flowers (where it only trails the Netherlands in terms of export figures), cocoa, oilseed, bananas, and sugar cane, among others. It should be noted that while obviously not part of the official economic output of the country, coca cultivation and everything that comes with it have shaped the culture and economy of the country (and its neighbors to some regard) in profound ways.
In the services sector, the main players are similar to what one might expect from an industrialized country: IT and finances are dominant in this area. However, due to the change in global perception in the past 20 years, tourism has also seen an upswing. Bogotá and Medellín are the two spearheading cities in the tertiary sector and in fact for the economy as a whole. We have taken a closer look at the two metropolises in our article on moving to Colombia.
As positive a development as Colombia has seen in the past years and decades, there still remains many an issue to be tackled in order to maintain positive economic performance:
- Of course, as any nation which is (at least partially) dependent on energy and commodity exports, Colombia’s economy is susceptible to fluctuations of prices on the global market.
- In many sectors and areas, working conditions and the influence of labor organizations leave much to be desired, to put it mildly.
- Unemployment is a pressing issue for nearly 10% of the Colombian people – the highest unemployment rate in the continent.
- Infrastructural challenges still pose roadblocks, not only in the figurative sense. Colombia has a large informal sector, which does provide a good portion of the population with a means to (barely) stay afloat, but does very little in terms of income security or economic productivity.
- Closely related to the problems of the informal sector and unemployment are the shocking dimensions of income inequality in Colombia. It is estimated that a staggering third of the population lives below the poverty line.
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