Colombian Economy

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Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than a decade. Colombia, with its Andean neighbors Peru and Ecuador, is currently negotiating a free trade agreement with the United States.

Agriculture has traditionally been the chief economic activity in Colombia. An extremely wide variety of crops is grown, depending on the altitude, but coffee is by far the major crop and its price on the world market has affected Colombia's economic health. Colombia is rich in minerals, including petroleum, natural gas, iron, nickel, coal, copper, gold, silver, platinum, and emeralds. The manufacturing sector of the economy has expanded greatly in recent decades, although its heavily dependent on imported materials. Beverages and processed foods, textiles, clothing and footwear, metal products, cement, and chemicals are the chief manufactures. Tourism is also a sizable source of income. Colombia continues to have vast amounts of mineral resources and sufficient amounts of energy resources, specifically natural gas reserves. Although Colombia maintains its position as a net exporter of petroleum, Colombia's oil reserves have diminished dramatically, from 3.1 billion barrels in 1995 to less than 1.4 billion by the end of 2004. If a major oil discovery is not found in the next couple years, Colombia will become a net oil importer by 2009. Oil replaced coffee as the nation's leading legal export in 1991. Other important official exports include petroleum-related products, coal, cotton, bananas, cut flowers, and sugar. Cocaine is the major illicit export, accounting for about 25% of foreign exchange earnings. The drug trade has brought riches to some, but has seriously disrupted the fabric of Colombian...
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