Athens State University
The purpose of this paper is to focus on the analysis of the cultural factors of the economics of Colombia as it relates to doing business there, the business etiquette in Colombia; including their customs and manners, and the impact those factors have on the industry of Colombian rose exportation.
The purpose of this paper is to focus on the analysis of the cultural factors of the economics of Colombia as it relates to doing business there, the business etiquette in Colombia; including their customs and manners, and the impact those factors have on the industry of the Colombian rose exportation. Factual Background
Colombia, officially the Republic of Colombia, is the fourth largest economy in Latin America and the fifth largest country with approximately 44.91 million inhabitants as of May 2009 with a growth rate of 1.184% (United States Department of Commerce, 2010). An overwhelming 90% of Colombia’s population is Roman Catholic and 10% other religion (kwintessential.co.uk). The largest city and capital of Colombia is Bogotá. Colombia has five Latin American countries as its borders, which are Venezuela, Brazil, Ecuador, Peru, and Panama. Colombia also has the Caribbean Sea and the Pacific Ocean as its borders. Colombia exported an estimated $31.34 billion in 2009, which consisted of petroleum, coffee, coal, nickel, emeralds, apparel, bananas, and cut flowers (“Colombia Economy Overview,” 2010). Colombia sells much of its emeralds and considerable amounts of gold of the world, silver, and platinum and has the highest coal production in the continent. Colombia’s highlands are subject to volcanic eruptions, occasional earthquakes and periodic droughts Climate
Colombia has an extremely diverse climate ranging in a variety of temperatures and precipitation. This is caused by the variations in the elevation. Colombia is divided into four separate markets, each with its own culture and dialects; this is the result of three ranges of Andes running north to south. Temperatures range from very hot and humid at sea level to relatively cold and dry in the higher elevations. The variations in temperature create production and inventory challenges for a manufacturer that has to produce a distinct product and package for each climate zone (Ball, Geringer, Minor & McNett, 2010). Economy
GDP grew 0.4% in 2009, and 2.5% year on year in the final quarter, after contracting 3% in the early part of the year, which was the first decline in a decade. Growth will remain relatively modest in 2010, but a recovery in domestic demand and bank lending means the recovery will continue. The Colombian economy grew by 4.5% year on year during the second quarter of 2010, driven by the outstanding performance of the mining and oil extraction and was also supported by a strong internal market (“Colombia,” 2010). The official exchange rate GDP in 2009 was estimated to be $228.8 billion. The estimated GDP per capita (PPP) in 2009 was $9,200 and an estimated $9,300 in 2008. GDP composition by sector estimates in 2009 that agriculture was 9.7%, industry was 37.4% and services were 52.9%. (Central Intelligence Agency, 2010). Labor force in 2009 was estimated at 21.53 million. The Unemployment rate for 2009 was estimated at 12% and in 2008 estimated at 10.6%.Gross fixed investment was estimated in 2009 to be 24.2% of GDP. Colombia’s public debt was estimated at 45.8% of GDP in 2009 (“Colombia economy: Seeking fiscal sustainability,” 2010). According to The Economist Intelligence Unit (2010), the Inflation rate (consumer prices) peaked in October 2009 to an estimated 4.2% and has been falling back to the central bank’s target range. This means that the central bank has been cutting rates aggressively. The central bank discount rate was 5.5% at the end of 2009 and an 11.5% at the end of 2008. Commercial bank prime lending rate was 12.98% by the end of 2009....