Colombia
Political Overview
Colombia declared independence from Spain in 1810 but was unable to secure a lasting separation from its colonial master until 1819 when Simon Bolivar defeated the loyalists at Boyacá. The resulting federation of Gran Colombia - Venezuela, Colombia, Ecuador, Panama - did not last very long. In 1830 both Ecuador and Venezuela seceded to form independent countries and in 1903 Panama declared its independence from Colombia to become a de-facto United States protectorate.
The deep divisions in Colombian politics that were to shape the country's modern development emerged shortly after independence, being a battle between the conservative right and the free-thinking left. This rivalry between the conservatives and the liberals continued throughout the 19th and early 20th centuries and came to a head in "La Violencia" (1948-1958), a period during which an estimated 250,000 people lost their lives. "La Violencia" was resolved by the formation of a (bipartisan) National Front in which the two parties agreed to rotate the presidency and share cabinet positions. Presidential rotations continued until 1974 when the National Front lapsed, although the parties have continued to share power.
Political System
The Colombian government consists of a democratically elected representative system with a strong executive. The president, who is the head of state, is elected for a non-renewable four-year term and has the power to appoint and remove cabinet ministers. The legislature is a bicameral congress consisting of a 102-member Senate and a 161-member Chamber of Deputies, with all members directly elected for four-year terms.
In recent decades Colombia has enjoyed virtually uninterrupted constitutional and institutional stability, with only limited influence from the military. There is a strict separation of powers between the executive, the legislature and the judiciary, with the Supreme Court held in high regard. The Constitutional Court can and does challenge the legality of both executive and legislative measures.
There are two main “traditional” parties, the Partido Liberal (PL) and the Partido Social Conservador (PSC). Congressional elections held in March 2002 resulted in a triumph of sorts for the Partido Liberal (PL), which remains the majority party in both the Senate and the Representatives chambers but lost a significant number of seats to former PL members or independent candidates. Partido Social Conservador kept about the same number of seats in both chambers and is the second largest party.
President Uribe - a former Partido Liberal member - ran and won on an independent platform. Many Congress PL and independent members in both chambers pledged their support to Uribe even prior to his election. This loosely organized coalition, though, may last just as long as Uribe's popularity remains strong.
Economic Conditions
Over the last quarter of a century Colombia's average economic growth rate of 4.5% has outperformed all Latin America's main economies, while growth over the last 15 years (4.15%) has been second only to Chile (with 5.0%). More importantly, Colombia's GDP growth volatility (at 1.9%) is one of the most stable in the world (compared with 2.2% for industrialised countries, 3.4% for South East Asia and 4.7% for the rest of Latin America). In addition, Colombia was the only Latin American country not to default or restructure its foreign debt during the 1980s.
The keys to this success were prudent fiscal management, a diversified economy, an open trade and investment regime, high investment rates, judicious foreign exchange management and conservative debt management. Doubts about the strength of the Colombian economy arose in 1999-2000, however, as the country endured its deepest recession in 50 years suffering economic contraction of 4.5% and unemployment of 20%. Since then, a series of reforms and international financial support (including an agreement with the IMF) have helped the economy to return to growth.
After coming into power in 1998, the Pastrana government was successful in re-establishing confidence and life in the economy by reducing the fiscal deficit and lowering inflation and interest rates. These actions - combined with government efforts to reform and strengthen the banking sector and improved income from oil exports and privatisations - saw the economy improve during 2000. Economic growth was around 3% in 2000, but unemployment refused to fall much below 20%. In 2001, unemployment levels remained high at around 18% and GDP growth was only 1,4% with a 2002 forecast of 2.3%. In 2002 inflation is expected to be 6%.
The Colombian economy remains sluggish. Political uncertainty and unresolved difficulties in the financial system have slowed the return of investment and although private domestic demand is starting to pick up, the recovery is hesitant. During the first half of 2002, GDP recovery stalled - the official forecast has been revised from 4% to 2.3%. Unemployment has stayed high while inflation has eased downwards. Oil output has continued to fall, manufacturing has slackened and construction results have been mixed. Agricultural production has led performance with many support schemes for the sector now operating. The slowdown has been attributed to a decline in the world economy, manufacturing industry difficulties caused partly by trade union disruption, decreased oil production, low business confidence and the end of the peace process initiated by Pastrana's government..
President Uribe's government will continue the economic policy directions established by the Pastrana government. It will focus on an increase in fiscal discipline, cuts to public expenditure, increased funding for military and security resources, significant tax increases and revised standby agreements with the IMF.
Economic and Trade Policy Directions
Since the mid-1980s Colombia has significantly increased export revenues, while diversifying its export base. The value of exports more than tripled from US$3.9bn in 1985 to US$13bn in 2000. The export share of coffee shrank from 45% to 8% while non-traditional exports grew dramatically. Oil and derivatives showed a marked increase from 11% in 1985 to 35% in 2000.
In terms of trade policy, Colombia is committed to the Cairns Group and further agricultural liberalisation. It is at the forefront of the development of regional trade agreements and groupings such as the Andean Community (Bolivia, Peru, Ecuador, Colombia and Venezuela) and the G3 (Colombia, Mexico and Venezuela). It is also seeking to increase its role in the Asia-Pacific region and is a full member of the Pacific Basin Economic Council (PBEC). It is a member of APEC working groups on energy cooperation and telecommunications and has aspirations for full APEC membership.
Colombia, along with Ecuador, Peru and Bolivia, is a party to the Andean Trade Preference Agreement providing preferential trade with the US. The aim is to use trade preferences to assist in efforts to eradicate drug production and trafficking. There are reports that from 1991 to 1999 ATPA was responsible for an estimated 140,000 new jobs in Colombia. In August 2002, US Congress renewed ATPA until December 2006 and during President Uribe's visit to Washington in September 2002, the U.S Administration announced a further expansion of APTA coverage which will also benefit Colombia.
