History
Colombia is one of three countries that emerged following the collapse of Gran Colombia in 1830. Francisco de Paula Santander became the president of the new state. Colombia’s name has changed many times since its independence from Gran Colombia, starting with the Republic of New Granada, then the Granadine Confederation, then the United States of Colombia, and finally the current Republic of Colombia.
Colombia’s history is filled with violent conflicts between the conservative and liberal political parties. The most notable of these conflicts was a civil war occurring between 1899 and 1903, known as The War of a Thousand Days. The war led to approximately 100, 000 deaths. Colombia also lost part of its northern territory in the conflict, which ultimately became what is currently Panama. Tension increased and conflict continued through 1958. From 1948 to 1957, Colombia experienced its worst political conflicts it what is now coined la violencia. The violence began after the assassination of the liberal leader, Jorge Eliécer Gaitán. It is estimated this turmoil resulted in at least 200, 000 deaths. During this period, Colombia was ruled by two successive dictators, Laureano Gómez and Gustavo Rojas Pinalla.
The conflicts and violence finally ended with an agreement between the conservatives and liberals in 1958. They formed a coalition government, known as the National Front government. The idea behind this type of government was that each party would hold the presidency and all other government and civil positions on an equal, rotating basis. This lasted for sixteen years and let to better economic conditions. Beginning in 1974, Colombia began to have legitimate elections between the two political parties. While political violence declined as a result of these elections, Colombia has been plagued with other issues.
In 1985 a dormant volcano erupted outside of Bogotá killing nearly 20, 000 people in the town of Armero. In 1999, another volcano resulted in significant loss of life in the town of Armenia. In addition to these natural disasters, Colombia was plagued by increased terrorist and drug activity. The Minister of Justice was assassinated in 1984 by drug barons working to protect the extremely profitable drug trade.
Less than a year later, Guerrillas raided the Palace of Justice in Bogotá in 1985 taking a number of hostages until the Colombian troops stormed in. The incident resulted in nearly 100 deaths including several Supreme Court judges.
The Marxist guerrillas terrorist activities still continue and have gained in strength since they partnered with the drug cartels for weapons. These guerrillas, known as the Revolutionary Armed Forces of Colombia (FARC), reside in the south part of the country and have approximately 20, 000 members. From this remote region, the guerrillas plan attacks on the Colombian military and police and protect their cocaine plantations. The estimated number of deaths in the 1990s from this conflict is 35, 000 and has resulted in a number of military personnel being held hostage.
Andrés Pastrana became President in 1998 and unveiled a plan to combat the violence and drug problems, known as Plan Colombia. The goals of the plan were to increase peace throughout the country, combat the drug industry, revive the economy, improve protection of human rights, and reduce social inequalities. The United States provided a $1. 3 billion assistance package mostly to help build-up the military and counternarcotics initiatives.
In 2002, Álvaro Uribe was elected President and released the Democratic Security and Defense Policy. This plan focused attention on the security and military components of Colombia, but also worked to improve the social and economic issues. Uribe was reelected in 2006. (Gascoigne, 2001)
Most recently, in June 2010 Juan Manuel Santos Calderón was elected President of Colombia. (President of Colombia, 2010) He is believed to want to continue Uribe’s market-based economic reforms. (The world in figures: Countries, 2010)
Background Facts
All facts and statistics below were taken from the CIA World Factbook, unless indicated otherwise. (The World Factbook, 2010)
Colombia is located in South America. It is over 1 million square kilometers, which is slightly less than twice the size of Texas, ranking it 26th in the world in terms of size. The major natural resources of Colombia are petroleum, natural gas, coal, and other minerals. Current issues facing the Colombian environment are deforestation, soil and water damage from the overuse of pesticides, and air pollution.
The population of Colombia as of July 2010 was 44, 205, 293, with an annual growth rate of approximately 1. 184 percent. A majority of this population is between 15 and 64 years old (66 percent), a relatively smaller percentage is under 14 (28 percent), and even smaller still is the percentage of the population over 65 years old (6 percent). Just about two-thirds of the population lives in urban areas.
An indicator of social and economic conditions in the country, the infant mortality rate is 16. 97 deaths per 1, 000 live births and the life expectancy at birth is 74. Only about 170, 000 people are living with HIV/AIDS, constituting only . 6 percent of the population.
The official language of Colombia is Spanish. The dominant religion is Roman Catholic at about 90 percent of the population. The government spends approximately 3. 9 percent of GDP on educational expenditures, ranking 111 in the world. Over 90 percent of the population over the age of 15 is literate and students are expected to remain in school on average for 13 years. These statistics indicate a successful educational system.
Military service is required of 18-24 year olds for 18 months. The military expenditures are 3. 4 percent of GDP, ranking 35th in the world.
Colombia ranks first in murders per capita in the world. (Crime Statistics)
Predominant Economic Model
The predominant economic model in Colombia is a market-based mixed economy. (Financial Standards Foundation, 2009) Both privately owned enterprises and the government play an important role. The market-based aspect of their economy focuses on private businesses producing goods and services and individuals consuming those goods and services. Ownership rights are important in protecting the private enterprises from governmental power. The economy is believed to be more efficient in a market economy as supply and demand are used to determine the production and pricing of goods and services. The mixed economy aspect means Colombia allows certain limitations to be placed on free enterprise through government regulations. Some services are better provided by the government than through a free market system. (U. S. Department of State)
In 2005, over half of the total investment in Colombia was from government enterprises and government investments. This leans Colombia to more of a mixed economy. A process of economic liberalization was started in 1990 by removing restrictions on imports and foreign investment, privatizing more services, and easing government regulations. More recent reports show the liberalization is effective. The 2008 index of Economic Freedom reported the Colombian government’s total expenditures were only 31 percent of gross domestic product. (Financial Standards Foundation, 2009)
The National Administrative Department of Statistics states that the Colombian gross domestic product growth rates were approximately 7 percent in 2006 and 8 percent in 2007. The U. S. State Department reports there are a few factors that are contributing to the stable growth in Colombia: an increase in domestic security, monetary policy that maintains low inflation and a stable exchange rate, a rise in petroleum prices and exports in response to their economic liberalization, and various trade agreements. In 2008, the growth rate fell mostly due to a worldwide economic downturn, continuing to decline to 2. 4 percent in 2010. (Financial Standards Foundation, 2009)
Of some concern to the International Monetary Fund is the large deficit Colombia faces. The deficit is mostly financed by foreign investment, which can be risky due to an uncertain international economic environment. (Financial Standards Foundation, 2009)
In summary, the Colombian economy exhibits characteristics of both a market-based economy and a mixed economy. The economic liberalization effort has already and will continue to move Colombia more toward a market-based economy that features less government regulation and a greater focus on privatization and international trade and investment.
Legal Environment
The Colombian government is made up a three branch system, similar to that in the United States. It consists of an executive branch, headed by the President, a judicial branch, and a legislative branch, consisting of a bicameral Congress. (The World Factbook, 2010)
A new constitution was ratified in 1991 and brought about major changes in the political institutions. The new constitution maintained the three-branch system of government. It created new positions such as the Inspector General, a Human Rights Ombudsman, a Constitutional Court, a Superior Judicial Council, and Vice President. Significant social changes were implemented such as civil divorce, dual nationality and most importantly a legal means to appeal government decisions affecting constitutional rights. The constitution also implemented an accusatory system of criminal justice. Finally, an amendment in 2005 allows presidents to hold two consecutive four year terms, as opposed to just one. (Bureau of Western Hemisphere Affairs, 2010)
The Index of Economic Freedom measures the property rights index. The index measures the degree to which private property rights are protected by a country’s laws. It also indicates the likelihood private property will be seized by the government, how independent the judiciary is, and the enforceability of contracts. Scores range from 0 to 100, where higher scores indicate a better protection of property rights. Colombia scored a 50. (Property Rights Index, 2010) The constitution explicitly protects private property and contracts are generally enforced. Compensation is required in expropriation cases. Intellectual property rights are not always guaranteed. There are commonly infringements on intellectual property, especially trademarks. In terrorist territories property rights are not guaranteed. (Heritage Foundation, 2010)
Corruption is a significant problem in Colombia. There are concerns about the influence of criminal organizations on the police, military and other judicial services. (Heritage Foundation, 2010)
Drug trafficking and terrorist activity is still a major issue in Colombia. With the assistance of the United States, Colombia has been able to weaken the drug trafficking organizations, reduce the supply of drugs to the United States, and establish a military presence in conflict regions. The involvement of terrorist groups in drug trafficking increases the difficulty of cutting down the problem. With the help of the United States alternative development programs have cultivated over 650, 000 hectares of agricultural and forestry lands. Colombia has instituted social infrastructure projects to entice communities to remain illicit-crop free. (Bureau of Western Hemisphere Affairs, 2010)
