While it is unlikely that moving to Colombia will be top of the agenda of many expats around the world there is no doubt that this Republic of South America has a growing number of fans. This is an area of the world which has often been shrouded in controversy and had become something of a no go area for tourists and travellers. However, like so many other areas of South America there have been massive changes over the last few years and expats are now viewing Colombia in a very different light.
Historically Colombia has been associated with drug cartels and other illegal activities and while it would be wrong to suggest these activities have been stamped out completely, there have been massive changes in the makeup of Colombia. The economy has shown significant growth over the last few years, even against an often volatile and aggressive backdrop, highlighting perfectly the strong structural backbone of the country and the potential for the future. There are still major issues with regards to corruption in Colombia but there is no doubt that the authorities have recognised the need to attract significant overseas investment to help with future development of the country. So what does the future hold for Colombia?
Where is Colombia?
Colombia is situated in northwestern South America and borders Venezuela, Brazil, Ecuador, Peru, Panama and is also in close vicinity to Jamaica, Haiti, the Dominican Republic, Honduras, Nicaragua and Costa Rica. This is a country with a population of over 45 million people, the 29th largest in the world and the second-largest population of South America. The country is also has one of the largest Spanish speaking populations in the world behind Mexico and Spain itself. In geographical terms this is a country which is perfectly placed to benefit from trade between North America and South America although we may well need to see improvements in the political arena and economic outlook for the country to take full advantage.
The weather in Colombia
Geographically there are many challenges with regards to Colombia because of the large variations in altitude which produce a large variation in the weather, temperatures and rainfall. The country itself is dominated by the Andes mountain range and lies on the infamous Pacific Ring of Fire which regularly produces earthquakes and volcanic eruptions which can cause devastation to the country. We also have the jungle of the Amazon, savanna, lowlands as well as additional mountain ranges to the Andes.
Bizarrely you can actually travel just a couple of hours within Colombia and you could experience extreme weather conditions ranging from subzero temperatures to the hot lowlands. The very fact that Colombia is situated on the equator means that in simple terms the temperature remains constant but there is dramatic variation and the creation of “climatic zones” due simply to altitude variations within the country. There are two main seasons within Colombia which are dry and wet and the duration and timing of the seasons will vary throughout the country.
Working in Colombia
The economy of Colombia is very difficult to explain in simple terms as it has been very volatile prior to the turn-of-the-century but has otherwise remained fairly buoyant for the last decade. Indeed growth of 8.2% back in 2007 was one of the highest in Latin America and attracted an influx of significant overseas investment. However, while the Colombian economy on the whole is performing very well, poverty is still a major issue and one which the Colombian authorities need to address as soon as possible. Back in 2003 it was reported that the richest 20% of the population accounted for over 60% of income in Colombia and the poorest 20% just 2.5% of income – indeed nearly 20% of Colombians still live on less than two dollars a day!
Historically agriculture has been a major employment area for Colombia although this has been replaced by industry and services which have now come to the fore to challenge agriculture as the main employment arena. The services sector itself accounts for nearly 59% of employment in Colombia, industry 19% and agriculture still a very relevant 23%. Like so many Latin American countries, Colombia is very rich in natural resources and the export of petroleum, coal, coffee and gold still plays a very important role within the Colombian economy.
Despite the fact that the economy in Colombia has been fairly buoyant for some time now, government spending is still dominated by the servicing of the country’s major debt mountain, which is around 53% of GDP. Thankfully, inflation has remained fairly low in Colombia over the last few years which has taken away one potential issue that has caused damage in the past. Overseas investment in Colombia has increased dramatically over the last decade and while there are still major issues to be addressed, such as corruption, there is no doubt that more and more international companies and international investors have spotted the potential of the area.
Major cities in Colombia
Even though Colombia is now more popular with tourists than ever before, as well as with expats, there are very few cities in the country which immediately spring to mind. So what are the major cities in Colombia and what do they have to offer?
Bogotá is the capital of Colombia and perhaps the most recognisable city in the country with a population of just over 7 million people. When you also consider Bogotá and its surrounding metropolitan regions the population grows to around 8.5 million and it is not difficult to see how important this area is to Colombia as a whole. Rated as the 30th largest city in the world, Bogotá is over 2600 m above sea level making it the third highest capital city in the world.
It will be no surprise to learn that Bogotá is the main economic and industrial center of Colombia but it is also a city of huge divergence. Despite the fact that GDP in and around Bogotá has grown by over 10% for much of last decade, and accounts for over 25% of Colombia’s GDP, the unemployment rate is 11%. As with the vast majority of growing countries around the world the major influence on the local Bogotá economy is the services sector which accounts for around 80% of companies in the region. Important business varieties in Bogotá include food industries, chemical, pharmaceutical, textile, publishing as well as metal work. In many ways Bogotá has succeeded in allowing very old-style industrial sectors operate side-by-side with the ever changing services industry.
Medellin is the second-largest city in Colombia with a population of around 2.4 million although when you take into account the metropolitan area of Medellin the population is estimated at over 3.5 million people. So what does Medellin have to offer and what can you expect to see?
The economy of Medellin is dominated by a small group of business people known as the Antioquian Enterprise Group who have built up a very good reputation in international markets and now employ in excess of 80,000 Colombians. The aggregate value of the companies within the enterprise group is now in the region of some USD17 billion and growing. The main areas of business in Medellin are steel, textiles, confections, food and beverage, agriculture, public services, chemical products, pharmaceuticals, refined oil and flowers. So while Medellin may not be the largest city within Colombia it is most certainly one of the more prominent economies with a massive variety of employment opportunities.
Santiago de Cal
Santiago de Cal is located in West Colombia, has a population of just over 2.2 million people and is commonly referred to as having one of the fastest growing economies in the country. The city itself has a history which goes back to 1536 although this is very much a modern day city which has learnt to adapt and respond to the every changing economic climate. As in many areas of Colombia, tourism is now playing a major role in the local economy but what else does Santiago de Cal have to offer?
What is no doubt that the construction industry, and property development, have played and continue to play a major role in Santiago de Cal but there are also many other areas of industry offering employment opportunities. The Cali Exposhow is renowned as one of the most important business events in Colombia attracting a raft of businesses from the fashion, cosmetics and health industries. While the economy has been somewhat erratic over the last few years there is no doubt that changes made over recent times are now starting to impact upon the strength and the prosperity of the region.
Barranquilla is the fourth-largest city in Colombia with a population estimated at around 1.5 million people. The city’s northern location makes it ideal for international trade and indeed Barranquilla is renowned as Colombia’s first port and the most prosperous in the country. Historically the city was the second-largest in Colombia but after many years of corruption we saw a gradual erosion of standard of living available to many and the population of the region fell behind other up-and-coming cities.
There is no doubt that import/export dominates the local economy and this is something which is certain to continue forever and a day. Despite the fact that the city, and the surrounding regions, have suffered from corruption and mismanagement of the economy in the past, there have been improvements over recent years and there are high hopes for the future.
The cost of living in Colombia
As with so many up-and-coming South American countries, there is a very large gap between the “haves and the have-nots” in Colombia. On the whole there is no doubt that’s the cost of living in Colombia compares favourably to the vast majority of other countries you can think of in the developed world. However, when you consider that 20% of the Colombian population account for nearly 70% of the country’s wealth, and the vast majority of the population live in and around the top 10 major cities, the divergence in the cost-of-living is enormous.
It really is a situation where you can ultimately choose the cost-of-living which you can afford and then check out the various regions in and around the major cities which could accommodate your financial straitjacket. As a consequence it is impossible to clarify with confidence exactly how much it would cost to live in Colombia and, even though the headlines may suggest the worst is over, as it may well be, there are still massive problems with regards to poverty in many regions of Colombia.
As with so many South American countries, there is no doubt that the reputation of Colombia has been tainted by major corruption and political scandals of years gone by. While much of his reputation is unjustified, today there is still work to be done with regards to the economy, corruption and politics. Then we also have the major issue of poverty in the region which is causing growing civil unrest as those without financial backing have to sit back and see a very small group of the population enjoying the vast wealth being created.
As a consequence, a relatively small income in countries such as the UK and America could see many expats able to afford a very comfortable and enjoyable standard of living in Colombia. It is disappointing that the Colombian authorities have not been able to make more of the countries position in South America which is perfect for international and local trade. However, as the country’s debt pile continues to fall in the future this should leave more funds available for inward investment within Colombia which should benefit all in the future. As you might expect from a developing economy, the Colombian authorities are very keen to attract overseas visitors, overseas investors and ultimately expats are now flocking to the region.
Even though Colombia is not yet the “finished article” there’s no doubt that great progress has been made and the country is potentially one to watch for the future.