Two decades ago, Colombia had a long list of problems: A violent drug trade, an escalating civil conflict, economic isolation and grinding poverty.
Prospects have improved for South America’s second most-populous nation, the country’s ambassador to the United States said in a visit to the Twin Cities.
“We have a sound, stable democracy. We have security in most of our territory. We have brought down poverty from 60 percent to 27 percent. The trend is very clear. We defeated organized crime and we are negotiating peace. Those are good news for the world,” Ambassador Luis Carlos Villegas said in an interview. “Having a prosperous, stable, robust Colombia is a safeguard for stability in the whole continent.”
Colombia’s economy is growing quickly even as the nation works to stamp out a violent drug trade, wind down its 50-year-old civil war and create a lasting solution for its poverty-stricken rural areas. The country has geographic advantage, positioned where South America meets Central America and with ports in the Pacific and the Caribbean. And it has forged recent free trade agreements with the U.S. and several other nations.
While in the Twin Cities, Villegas met with officials from big companies who are already in Colombia such as 3M and Cargill, and talked to 24 smaller companies that are interested in investing in Colombia or trading with the country.
He met representatives from the University of Minnesota to try to establish an exchange program, and with trade officials to try to arrange for a Minnesota trade mission to his nation. He also visited some of the 2,000 or so Colombians living here.
Colombia’s economy, at $378 billion in annual output, is only about the size of Minnesota’s and Iowa’s combined, but the nation of 47 million is growing and solving its own problems.
An energy boom — the nation produces about half as much oil as Venezuela — has filled public coffers and allowed the country to attack inequality and provide universal health care to its citizens, Villegas said. Also, a national desire to leave behind the severe problems of the 1990s has “produced a reaction in the Colombian society that change was needed,” fueling a wave of reforms.
That desire for change has translated into greater economic connectedness. Not only has Colombia opened up trade with the United States with a free-trade pact that went into effect in 2012, but the country is a founding member of the Pacific Alliance, a trade group with Mexico, Peru, Chile and now Costa Rica that accounts for roughly half of Latin America’s economic output.
Not everyone is pleased with free trade, Villegos said. Farmers in some sectors in Colombia have been hurt by the pact with America.
But on balance, free trade with the U.S. has been good for his country, he said, and 67 percent of Colombians take a favorable view of the pact with the United States. For instance, new cars, viewed 15 years ago as a luxury, have become common. New vehicle purchases rose from 50,000 per year to 350,000 per year. Auto manufacturers have not set up major operations in Colombia yet, but Villegas expects that discussion to begin in earnest by the end of the decade.
“The benefits of the reforms started to show up very early,” said Villegas, who serves as ambassador under President Juan Manuel Santos, a holdover from the government of Alvaro Uribe. “The consumer started to see that having an economy more connected to the world has benefits.”
GDP on the rise
Colombian GDP has risen an average of 4.2 percent annually for five years. Minnesota exports to Colombia grew 18 percent to $99 million in 2013, and sales of Minnesota goods there have grown 6.7 percent per year over the past five years.
Negotiators have been in Havana for two years trying to reach an agreement with FARC, the Revolutionary Armed Forces of Colombia, the country’s largest rebel force. The conflict is now 50 years old, and a settlement has not been reached, even though FARC is diminished since 2000. The amount of land in coca production has dropped dramatically.
Villegas, a native of Pereira who studied in Paris and speaks English with a hint of a French accent, said the decline of cocaine production is taking away FARC’s financing and the decline in poverty is removing a reason for its public support.
“It shows that the system is working. So if you add the political argument that the system works to the practical argument that you cannot finance the irregular war through drugs any more, and you don’t have international support, you get to the conclusion that a negotiation to end the conflict is possible and necessary,” he said.
A peace agreement will be the first step for a vast region of Colombia that is still far behind the major cities like Bogota and Medellin. It needs infrastructure, irrigation, land reorganization, judicial reform, Internet access and better education.
“I think we will reach peace in the very near future, and then the hard part starts — implementation,” he said. “To do what? To bring modernity to a country inside Colombia that is rural, that has the size of Central America and 6 million people who live in the 19th century.”
Modernizing key rural parts of Colombia will take at least 20 years and probably cost a percentage point of GDP each year, Villegas said.
“But it’s possible,” Villegas said, “and it will bring another engine of growth for the country.”