Colombia’s industrial expansion has fared well in the twenty-first century, but large challenges remain. The coal mining and petroleum drilling regions of the country are the poorest with over 11 million Colombians living on a dollar a day. Colombia is experiencing the classic development problems of economic growth that is not broadly available to most of the population. The century long struggle between rural poor and urban groups with economic opportunities has been grossly distorted by drug cartels living among the rural poor. Since 2000 there has been considerable improvement in allaying this conflict or rural against urban, as the Colombian government has consistently pursued a liberal economic program for growth.
Industry And Commodities
Colombia has four major industrial centers—Bogota, Medellin, Cali, and Barranquilla, each located in a distinct geographical region. Colombia’s industries include textiles and clothing, particularly lingerie, leather products, processed foods and beverages, paper and paper products, chemicals and petrochemicals, cement, construction, iron and steel products, and metalworking. Colombia is South America’s third largest oil producing country and they export about 90 percent of their oil and natural gas. There is an extensive pipe network through the Andes Mountains region of Colombia that transports both natural gas and oil to the northwestern sea coast.
Colombia’s Gross Domestic Product is significantly dependent on exports and oil, coal, emeralds, natural gas, coffee and petrochemicals are the most active export commodities. Colombia’s largest trade partner is the United States, and US companies are active in their oil and gas industry. The petroleum, natural gas coal mining, chemical, and manufacturing industries attract the greatest U.S. investment resources. U.S. investment accounted for 37.8% ($4.2 billion) of the total $11.2 billion in foreign direct investment at the end of 1997 (and this trend has continued since then), excluding petroleum and portfolio investment. Worker rights and benefits in the U.S.-dominated sectors are more favorable than general working conditions. Examples include shorter-than-average working hours, higher wages, and compliance with health and safety standards above the national average.
There are human rights issues in mining zones and armed guerrilla military groups like the National Liberation Front (ELN) and the Revolutionary Armed Forces of Colombia (FARC) are known to execute bombing campaigns on the oil and gas pipelines. The bombings cause environmental damage and significant loss of life. The conflict is a strong indication that the economic development program continues to fail at offering opportunity broadly to all parts of the population.
In 1990, the administration of President Cesar Gaviria Trujillo (1990–94) initiated economic liberalism policies or “apertura economica” and this has continued since then, with tariff reductions, financial deregulation, privatization of state-owned enterprises, and adoption of a more liberal foreign exchange rate. Almost all sectors became open to foreign investment although agricultural products remained protected.
The government’s economic policy and democratic security strategy have engendered a growing sense of confidence in the economy, particularly within the business sector. The economy continues to grow in part because of austere government budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy, an improved security situation in the country, and high commodity prices. Ongoing economic problems range from reforming the pension system to reducing high unemployment. Unlike other Latin-American countries like Argentina or Venezuela, Colombia’s conservative government has not reduced its incredibly high inequality.
General government spending on health accounted for 20.5% of total government expenditures and for 84.1% of total health expenditures (private expenditures made up the balance) in 2003. Total expenditures on health constituted 5.6 percent of gross domestic product in 2005. The per capita expenditure on health care in 2005 at an average exchange rate was US$150.
Urban and rural residents experienced significant differences in access to health care. The coverage in the three largest cities—Bogotá, Medellín, and Cali—was almost 95 percent. At the rural level, the best services were delivered by the departments in the coffee-growing areas. At the bottom of the scale—in terms of quality and coverage—were the rural areas in the non-Andean regions as well as the marginal neighborhoods in medium-sized and small cities.
Healthcare follows industry. The cities is where industry is most prevalent and these are Colombia’s most substantial industries textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement; gold, coal, emeralds. In 1991 the national constitution was reformed with the purpose of creating a general social security system that included: pension regulations, a general system of healthcare, occupational safety and health and other complimentary social services. Unfortunately, the economic resources to finance this reform were insufficient. What has evolved is public health-care funding by shifting the burden of subsidy from providers to users. As a result, employees have been obligated to pay into health plans to which employers also contribute. Although this new system has widened population coverage by the social and health security system from 21% (pre-1993) to 56% in 2004 and 66% in 2005, health disparities persist, with the poor continuing to suffer relatively high mortality rates.
Colombia’s industrial cycle is founded on abundant natural resources and at the same time hampered by poor access to employment opportunities that support the social amenities of pensions and healthcare. Inequality produces social divisions that frequently fester into violence.