How the Andean nation turned around its economy to become a regional leader.
During the past decade, Colombia has experienced an economic and cultural renaissance following years of instability and lackluster economic growth.
“Colombia is Latin America’s third largest economy and has seen unprecedented levels of foreign trade.”
Colombia now boasts Latin America’s third largest economy and has seen unprecedented levels of foreign trade. This turnaround has not gone unnoticed by the country’s neighbors, who see Colombia as a fierce competitor.
However, it has not received the attention it deserves outside of the region, where the old perceptions of Colombia still linger.
Longitudes recently sat down with Francisco Ricaurte, UPS’s Manager for the Andean Region countries of Bolivia, Colombia, Peru, Ecuador and Venezuela. With more than 20 years of experience at UPS and almost a decade in Latin America, we wanted to get his perspective on how Colombia is doing and what lies ahead for this Cinderella of South America.
Longitudes: Colombia has been on the rise for years. What is the main driver of this turnaround?
Ricaurte: The signing of a peace treaty put Colombia in a position to continue its success, but the country’s recent economic progress helped bring it to this point. Colombia’s growth has come largely because of its willingness to work with other markets. Free trade has enabled the advancement we have seen over the past few years.
Colombia has shown it is more than willing to work with others in recent years, signing bilateral trade agreements with the EU, the US and with Canada.
In 2012, Colombia formed the Pacific Alliance trading bloc along with Chile, Mexico and Peru. The Alliance has already shown some short-term benefits, and the four nations are working closely to bring other countries into the fold. This will pay even greater dividends in the future, further incentivizing trade and motivating movement of people and capital.
Longitudes: What can help less urban areas in Colombia grow – both economically and infrastructure-wise?
Ricaurte: Visitors to Bogota and the other metropolitan centers see thriving, cosmopolitan cities. But the countryside is still struggling. There are now efforts underway to build and scale the infrastructure for these areas, which will open up many more opportunities for commerce.
Previously, the conflict in those areas made efforts to build unsuccessful. Now the country has the opportunity to make that investment. If Colombia wants to continue its growth, it needs to ensure the proper infrastructure is in place within the country.
Longitudes: In the past, Colombia’s major export crop – coffee – dominated the economy. Now oil is becoming a key product. What other future export opportunities will further diversify the economy?
Ricaurte: There is no doubt the economy of petroleum-exporting nations like Colombia can fluctuate with the price of oil. Fortunately, several other great products produced in Colombia stabilize the country. Coffee is still an important export, but people may not realize that flowers are another.
Colombia has become one of the worldwide leaders in the floral sector, and UPS is a major player in ensuring customers receive them fresh and intact. A flower cut today at a farm in Colombia can be at a doorstep or event in the United States in two days with UPS.
Centered in Medellin, Colombia also has a very strong retail manufacturing industry. This has given Colombia a more balanced portfolio of exports to ship throughout the world.
Longitudes: What are the most important export markets for Colombian goods?
Ricaurte: Colombia trades a lot with its immediate neighbors, of course, and the US, Europe and Asia are all important for the nation’s exports. E-commerce has helped small businesses in Colombia reach new markets, especially in the US. We’ve seen several of our Colombian customers using online channels to help reach an international audience.
Longitudes: In the 1980s and 1990s, many young Colombians fled the instability at home to seek better opportunities abroad. This “brain drain” must have had a big impact on the nation. How is the country making an effort to reinvest in its youth to ensure a better future?
Ricaurte: While I was not in Colombia during that period, I can tell you what I see today in the country. I am seeing young people stay and some come back because of the opportunities stemming from a stable economy that is open to trade. Now the country is not only attractive to Colombians, but to people from around the region and the world.
Longitudes: Looking to the future, how do you see Colombia evolving over the next five to 10 years?
Ricaurte: With better stability and economic growth has come better education and better perception of Colombia. Work remains. But if the evolution we have seen from this recent success continues, then Colombia is in a prime spot to prosper.
“For the first time in Colombia’s history, the middle class outnumbers the poor.”
Although poverty is still a concern throughout this sprawling country, millions of Colombians have left the poverty ranks in recent years and, for the first time in the nation’s history, the middle class outnumbers the poor.
Stability and openness have been vital to this resurgence, and I hope Colombia continues to develop its international trade. They took the right steps – now it is all about continuity. If that happens, Colombia could become one of the main markets for trade not only here in Latin America, but for the US and around the world.
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