The Republic of Colombia is situated in the north west of South America. Colombia borders to Venezuela, Brazil, Perú, Ecuador, Panamá, the Caribbean Sea and the Pacific Ocean. The territory of Colombia comprises 1.141.748 km² and has more than 48 million inhabitants. Therewith, Colombia is the third biggest country of Latin-America in terms of inhabitants, following Brazil and Mexico. D
The capital, Bogota, has more than 8 million inhabitants. Considering this, Bogota is the biggest city of Colombia. Other important cities are Medellin and Cali.
|1 141 748 km²|
|282.5 billion USD|
|Colombian Peso (1 EUR = 3 370.5 COP)|
Colombia is a presidential republic with a universal right to vote. The president is the head of state as well as the head of government. Colombia has a bicameral parliament, with 165 representatives in the Chamber and 102 members in the Senate. All members of the government are elected for a tenure of office consisting of 4 years.
The last election took place in May 2018. De laatste verkiezing vond plaats in mei 2018. Iván Duque Márquez , candidate of the right party, was elected as president of Colombia. Iván Duque Márquez is part of the conservative right-wing party Centro Democrático. The new president aims to enact the war on drugs. He promotes a neoliberal economic model aiming to attract foreign investors. Taking into account the election of Iván Duque Márquez, the pacification with FARC is put under pressure. This pacification was set by the resigned president Juan Manuel Santos with the former guerilla movement FARC. It represented the end of the civil war that lasted for years. The new president believes that former guerrillas easily get away with their crimes. President Iván Duque Márquez promises to review the conditions.
Contrary to what is often thought, Colombia is the oldest and most stable democracy of South America.
Colombia has the third biggest economy of South America. The past four years, there repeatedly has been an annual growth of approximately 3% which befits Colombia to the new generation of emerging economies. Colombia embodies an emerging economy along with a stable economy. Even in times of crisis, the Colombian economy continued growth.
The growth rate of the gross domestic product rose from 2,0% in 2016 to 2,7% in 2018. Before 2021 a 3,7% growth of GDP is expected on account of a growth in private consumption, investments and industrial production. In the meanwhile, the inflation has decreased from 7,5% in 2016 to 3,5% in 2018. The inflation is expected to decrease even more as far as to 3% in 2021. Hereby, the Central Bank is given the possibility to lower interest rates which leads to economic expansion.
The economic progression of Colombia is the result of increased stability and safety, and a sound economic policy. The previous government lead by president Santos created a National Development Plan (2014-2018) which was the foundation of the economic policy thus the economic progression. The five central sectors of the National Development Plan are infrastructure, housing, mining and energy, agro-industry and innovation. More than 700 multinationals have investment programs in Colombia partially owing to the National Development Plant.
Foreign Policy and Trade Relations
Colombia is the 59th of 190 countries on the Ease of Doing Business index. Colombia achieves a better than average score on this index.
Colombia has multiple opportunities to facilitate international trade. Firstly, since 2012 Colombia signed several new trade agreements. Herewith Colombia gained access to a network of 1,2 billion people.
Besides, Colombia benefits of a strategic geographic position. The country owns port installations on the Pacific Ocean as well as the Atlantic Ocean, which facilitates trade. At last, the country conducts a liberal economic policy that promotes international trade.
In June 2012, Colombia and the European Union consented to a trade agreement. As of August 2013, the trade barriers between the European Union and Colombia are entirely abolished. At this moment, Colombia is negotiating on a trade agreement between Japan & Turkey.
Colombia – Belgium
In 2017, the Flemish annual export to Colombia amounted to € 300,68 million. This is 3,4% lower than in 2016. In the ranking list of export markets of Flanders it resulted Colombia being on the 66th position in 2017. With an export portfolio of € 300,68 million, Flanders was the supplier of 0,74% of the total import of Colombia.
In 2017, the most important export products from Flanders to Colombia were: pharmaceutics (36,4%); machines, appliances and mechanical tools (14,4%); optical instruments and devices (9,0%); plastic and applications (6,0%); organic chemical products (4,2%); land transport vehicles (3,3%); electric machines, appliances and mechanical equipment (2,7%); aviation and aerospace (2,5%); various chemical products (2,2%); cast iron, iron and steel (1,7%).
An overview of the different categories is shown in figure 1.
Figure 1: Flemish export to Colombia in 2017 (Source: Flanders investment and trade http://www.flandersinvestmentandtrade.com/export/)
In 2017, Flanders imported products from Colombia for a total of € 560,97 million. This is 18,76% higher than in 2016. In 2017 Colombia became 50th on the ranking list of suppliers of Flanders. It contributed to 0,19% of the total Flemish import. With an import portfolio of € 560,97 million Flanders was the demander of 1,68% of the total export of Colombia.
In 2017, the most important Flemish import products from Colombia were: fruit (74,4%); coffee, tea, maté and spices (8,8%); mineral fuels, petroleum and distillation products (6,9%); gemstones, precious metals, diamond and coins (2,6%); cocoa and cocoa preparations (1,0%); divers products for human consumption (0,9%); sugar and sugar preparations (0,9%); copper and applications (0,8%); fats and oils (animal and vegetable) and dissociation products (0,7%); fish, shellfish and molluscs (0,5%)
Figure 2: Flemish import from Colombia in 2017 (Source: Flanders investment and trade http://www.flandersinvestmentandtrade.com/export/)
These are the sectors that will be increasingly important to Colombia in the future:
Health & Pharmaceutics – In 2016, the health sector yielded more than € 6 billion. In the pharmaceutical sector, sales increase with 5,5%. The turnover in the Colombian pharmaceutical sector increased from 2,75 billion to 2,9 billion in 2016 which makes Colombia the third biggest pharmaceutical sector of South America.
Energy & Mining – Colombia has one of the largest open coal mines of the world. Moreover, Colombia is the third largest export country of coal of the world. The country also holds other qualitative minerals, such as gold, silver, platinum and nickel.
Food & Beverage – Beer, coffee and cacao are the main products of this sector. The beer market registers a turnover of 21,1 billion COP per year. Coffee remains one of the most important agricultural products of Colombia. Brazil, Vietnam and Colombia produce more than half of the world production of coffee. Therewithal, Colombia possesses 2 million hectares where cacao can be cultivated.
Construction – As of 2015, construction is also an important sector of the Colombian economy. The growth is owed to multiple public and other construction sites as well as the implementation of free of charge and subsidized residential programs of the government. Currently the total production of construction materials consists of 160 million tons which is expected to double before 2025.
Petrochemistry – The petrochemistry offers multiple opportunities owing to numerous infrastructure projects. Cartagena is the city for petrochemistry as it is the industrial home of national and international companies such as Ecopetrol, Propilco and Mexichem. In 2016 the refinery sector has expanded its activities wherefore it provides 0,7% of the economic growth of Colombia. The sector is supported by a development plan to support industry growth and chain integration.
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Sources: FIT, Worldbank, Doing Business 2018, Atradius, OEC, export.gov