Colombia Overview: Economy
Agriculture has traditionally been the chief economic activity in Colombia. An extremely wide variety of crops is grown, depending on altitude, but coffee is by far the major crop and its price on the world market has affected Colombia's economic health. Among the commercial crops, coffee is grown between elevations of 3,000 and 6,000 ft (914 and 1,829 m); bananas, cotton, sugarcane, oil palm, and tobacco are grown at lower elevations. Between 6,000 and 10,000 ft (1,829 and 3,048 m) potatoes, beans, grains, flowers, and temperate-zone fruit and vegetables are grown.
Colombia is rich in minerals, including petroleum, natural gas, coal, iron ore, nickel, gold, copper, emeralds, and platinum. The saltworks at Zipaquirá, near Bogotá, are world famous. Hydroelectric potential was developed during the 1970s and 80s. The manufacturing sector of the economy has expanded greatly in recent decades, although it is heavily dependent on imported materials. Beverages and processed foods, textiles, clothing and footwear, and chemicals are the chief products. Tourism is also a sizable source of income.
Oil replaced coffee as the nation's leading legal export in 1991. Other important official exports include petroleum-related products, coal, nickel, emeralds, apparel, bananas, and cut flowers. Cocaine is the major illicit export, accounting for about 25% of foreign exchange earnings. Once most of the raw materials were grown in Peru and Bolivia, but cultivation has increased in Colombia as a result of those nations coca-eradication programs. The drug trade (Colombia also produces heroin and grows cannabis) has brought riches to some, but has seriously disrupted the fabric of Colombian society with its violence. Industrial and transportation equipment, consumer goods, chemicals, paper products, fuels, and electricity lead Colombia's imports. The United States and Venezuela are the chief trade partners.
During the early 1990s the economy was growing quickly in comparison with that of other Latin American countries, and inflation and unemployment were under control. However, government spending and foreign debt soared in the late 1990s, the country suffered its worst recession in a century, and labor unrest and internal problems related to the drug trade continued to threaten the country's economic stability. The economy improved somewhat in the early 2000s. Colombia is a member of the Andean Community, an economic organization of South American countries.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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