An investor looking for countries that are on the move economically need to take a look at the Economic Jaguars of South America. These are the nations of Colombia, Peru and Chile. They are all economically growing at a fast pace and are all welcoming foreign investment to turbocharge various sectors of their economy.
A visitor returning a decade later will be amazed at the stride of change taking place especially in Colombia and Peru. Chile of course had a head start with its stable government and free market reforms a generation earlier.
The economy of Colombia despite internal problems was still able to grow on an average of 4% in the years 1970 to 1998. The first recession arrived in 1999 the first year of negative growth since the Great Depression of the 1930’s. The recession was painful and was extended.
After a time a surge of growth resumed. By 2007 the economy was expanding at a impressive 8.2% rate. The highest rate of expansion in all of Latin America.
By 2012 Colombia’s Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) had reached $500 billion (USD). This made Colombia the third ranking economic power in South America and 28th in the world.
The GDP estimate for 2014 is $388.858 billion (USD) and the per capita rate is expected at $8,150.00. In PPP the rate of GDP would be $554.462 billion(USD) total and $11,600 per capita.
GDP growth for 2013 was 4.5%,4.8% in 2012 and 6.6% in 2011. Economic growth for 2014 is estimated between 3% to 5% depending on the source.
Colombia comprises a total of 1,141,748 km2 (440,831 square miles). The population is estimated to have reached 47,425,437 which places it 27th in the world.
Public debt in Colombia has stabilized at around 33% of GDP. Inflation has remained relatively low with an annual rate of 1.94% reported in December of 2013. Unemployment for the same month dipped to 8.4%. The number of people out of work is now at its lowest since the mid 1990’s.
It must be said that there is still some confusion with the formal and informal labor market.
Interest rates in Colombia are now the lowest in South America. They were cut in 2012 and 2013 a number of times.
Colombia is rich in natural resources and has a well balanced export market which includes minerals, petroleum products, forest products, agricultural products and food processing, chemicals, machines, and consumer products.
The most important industries in Colombia are still with oil and mining however.
The exports that have brought the most notoriety for Colombia are emeralds (the world’s leading source) coffee and cut flowers flown around the world (70% of cut flower imports in the United States are from Colombia). Colombia is the world’s largest producer and exporter of roses for example.
The major trading partners are the European Union,China,India,the United States and other countries in Latin America.
Tourism is an important part of the economy as well. In 2013 over 3 million foreign tourists had arrived. This market is growing by leaps and bounds. It increased 11% in 2010 alone. The people of Colombia are most welcoming to the many new arrivals and visitors.
The real estate market is also booming both domestically and for investors abroad who wish to relocate or be involved in the industry. The low interest rates and the government stimulus plan to boost home-building have aided this development tremendously.
Most of Colombia’s electricity is from renewable energy sources, 70% of that is from hydro-electrical generation. This is a major help in keeping the international balance of payments in Colombia’s favor.
The financial sector is rapidly expanding due to good liquidity and credit as well as the positive growth in the economy. The Colombian stock market first created in 2001 with 1,000 points had already breached the 7,000 points level by 2008.
Thanks to government support Colombia possesses close to 5,000 research groups in science and technology. This sector will become increasingly important to the country in the years ahead.
The most important part of the equation however is that Colombia’s people are fully engaged in in promoting the growth and prosperity of the country. They want to put the political and social problems of the past behind them. They support a open free market and a stable democratic government thus making Colombia a good country for investment.