October 24th, 2018

Colombian Macroeconomics and Key Industries

The Republic of Colombia has a total territory of 1.13 million square kilometers, which is almost twice the size of Texas. Located along the continent’s northwestern coastline, Colombia is the only South American country with both an Atlantic and a Pacific coastline totaling 3.208 kilometers. Moreover, the country is dominated by a variety of landscapes from coastal lowlands and central highlands to the rugged Andes Mountains and inland plains. Likewise, Colombia has a predominantly tropical climate. Currently, the country has a total population of almost 48 million citizens, with an average age of thirty years. Furthermore, about 81% of Colombia’s population lives in an urban setting, notably the city of Bogota with some 11 million inhabitants. Colombia has a historic and robust industry related to energy and fossil fuels. For a century, said industry has been shaped by both global and domestic economic trends as well as private sector ad government-led initiatives.

Colombian Macroeconomics and Key Industries

More specifically, the Paz del Rio coal mine was Colombia’s first government-led, major energy industry. However, the government sold its participation many years ago. In fact, Paz del Rio was the first company that Colombia had and it was because of the needs of the country. Mining in Colombia began around 1914, 1917 with the First World War. Because all the coal was imported from the United Kingdom, which at time was the world leader in the production of coal and all of the related machinery, railway, and industries that worked with coal. Thus, all countries imported coal from the United Kingdom. But, when the coal ships were cut off by the First World War, Colombia saw the need to look for coal and the first company was Paz del Rio, which at the time was state-owned and was eventually sold. Today it belongs to the Brazilian consortium, Votorantim.

Colombian policy in recent decades, has focused on moving the government towards the administration of the state and not of the economy. Believing that the government should be in charge of regulating the state and not administering private assets or economic sectors. This is why the government has sold little by little its stake in Ecopetrol, that’s why it sold state-owned ISAGEN, among other assets that it owns or owned. To be able to focus the government more specifically on the administration of the state.

Moreover, government institutions such as the National Mining Agency (NMA) limit themselves only to the extractive elements of the mining supply chain. That does not imply, however, that the Agency does not support other initiatives and works very closely with the Colombian Mining Association, with the ANDI [Industrial Development Association], which has made efforts to develop national supply chains, and especially with the chambers of commerce. The NMA does participate in these meetings with a strong input on ideas, etcetera, but the government’s scope of work does focus on value-added processes. Rather the NMA sticks one hundred percent to the promotion of mining exploitation, that is the mining exploration and exploitation.

(Read more about World Habitat Day and Sustainable Development)

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