Colombia
Colombia
1,143 mill km2,51 mill hab.(2019)
Capital: Bogotá
Colombian peso
Last Update: April 2021
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Colombia is a presidential democracy, currently ruled by Ivan Duque since the 2018 election. The government coalition is made up of the Democratic Centre (CD) party and the Conservative Party (PC). Colombia's mineral wealth and pro-business culture combine with democratic stability to make the country an attractive destination for foreign investment, despite persistent security risks and periodic regulatory uncertainty.
Colombia's economy has grown since 2000, driven by robust private consumption and stronger investment. Economic growth was on track to accelerate further in 2020, but the COVID-19 pandemic has hit the economy hard, causing a very deep recession. The IMF has estimated that the GDP has been contracted by 6,8% in 2020. The fall in the price of oil, which accounts for 40% of Colombian exports, will depress growth as well as exacerbate the fiscal deficit. In 2021, the IMF expects Colombia's GDP to experience a 5,2% growth.
The sanitary crisis derived from COVID-19 is expected to ameliorate in the following months. Regarding the main COVID-19 indicators, a rapid decrease in daily infections is expected in the month of May, further declining by summer (IHME) President Iván Duque is focusing, with some success, on containing the political and economic impact of the COVID-19 pandemic. This has resulted in an increase in his popularity; in April 2020, he unveiled a relief package to invest in medical equipment, credit for struggling companies, and job protection. In addition to the government’s limited political capital, the COVID-19 pandemic and low oil prices have put the government in a difficult fiscal position, further limiting Duque’s capacity to implement reforms or embark on major policy initiatives.
Multi-issue nationwide protests increase property damage and business interruption risks. Five weeks of protests that lasted into December 2019 cost the government and businesses about USD400 million because of property damage, looting, and business interruption, particularly in Bogotá. Protests have receded after the government agreed to a dialogue with strike organizers and the introduction of curfews to contain COVID-19. However, unrest is likely to reignite if the recession deepens and unemployment soars.
Security improvements resulting from the peace agreement signed between the government and the Fuerzas Armadas Revolucionarias de Colombia (FARC) in 2016 have stalled, leading to a rise in the number of FARC dissidents to around 4,000, with most of them moving into drug trafficking and illegal mining. Talks with the Ejército de Liberación Nacional (ELN), which were called off in January 2019 following an attack that killed 22 police cadets, are unlikely to resume in 2020. Mining, energy, hydrocarbon, and infrastructure projects will face a high risk of assault or improvised explosive device attacks in Arauca, Norte de Santander, Nariño, and Antioquia departments.
Colombia has a long tradition of constitutional civilian rule, despite decades of guerrilla and criminal violence. President Iván Duque took office in August 2018 after campaigning on a business-friendly, center-right platform and pledging to unite the country due to the intense polarisation that had characterized the government of his predecessor Juan Manuel Santos (2010-18). Duque’s party, the Democratic Centre (CD) viewed the peace agreement negotiated by Santos with the former Revolutionary Armed Forces of Colombia (FARC) as too generous and pledged to amend it.
President Iván Duque has maintained the executive’s traditional business-friendly posture, and he remains committed to attracting foreign investment and promoting new ventures, although his ability to do so in the wake of the COVID-19 crisis will be limited. Non-state actors have little adverse influence over government decisions and there is a high degree of contractual stability. The resource nationalism in vogue in neighbouring Venezuela and Ecuador is not in evidence in Colombia.
President Iván Duque has postponed major policy decisions and regulatory reforms in the wake of the COVID-19 crisis. The pandemic will continue to absorb the government’s attention and resources through early 2021. Despite Duque’s overall business-friendly agenda, this means that his ability to promote reforms before he leaves office in August 2022 will be very limited.
Despite extensive government efforts to crack down on corruption, the issue remains a constant feature of the operating environment at all levels, including local and national elected and appointed authorities. Corruption will remain a significant issue in the foreseeable future and is likely to remain a central theme as political parties and likely candidates prepare their platforms for congressional and presidential elections in 2022.
Colombia is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 45 out of 167 countries scored.
The country ranks 79 at the 2019 Human Development Index developed by the United Nations Development Programme.
Unions outside the public sector will continue to strengthen into 2021, capitalizing on marked discontent with the Duque government, temporarily tamed by the COVID-19-related lockdown. Numerous grievances by unions in transportation, public employees and oil sectors, can cause significant disruption through work stoppages, roadblocks, and site blockages.
Corruption affects all levels of government, with charges regularly brought against politicians and civil servants at the local and national levels and companies frequently investigated for paying bribes. President Iván Duque has sought to advance anti-corruption reforms following a referendum in August 2018, but progress on these measures has proved slow, partially as a result of opposition from within his Centro Democrático party.
Security conditions on highways and other roadways vary considerably by area due to the presence of criminal groups. The US Embassy prohibits employees from traveling by road outside cities after nightfall (including main highways linking Bogotá with Bucaramanga and Ibague), as well as all travel on municipal or long-distance buses.
It is advisable not to flag down taxis on the street; taxis should be called via phone or web app or taken from a taxi stand. Airports, hotels, and some restaurants/shopping centers have taxi stands or will call taxis for customers. Travelers should note that while Uber has been banned in Colombia, the application is still active. Uber users could be fined and attacks against Uber vehicles by taxi drivers have occurred. Traffic in Bogotá is exceptionally congested, creating opportunities for criminals to rob vehicles. Drivers and passengers should always be aware of their surroundings and keep doors locked, windows rolled up, and all valuables out of plain sight. Due to poor security conditions on some roads and the presence of armed groups in many rural areas, it is highly advisable to use air travel for all long-distance trips. Roads, including main highways, are regularly rendered impassable by flooding and landslides (see NATURAL RISKS section).
Overall, Colombia ranks 67 out of 190 countries scored at 2020 Doing Business Index by the World Bank and 92 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.
Drug trafficking is likely to continue to be the single most important driver of violent crime in Colombia. Since the disintegration of major cartels in the 1990s, drug-trafficking operations have become much more fragmented. However, several large, armed criminal structures continue to operate including the Úsuga Clan with approximately 3,000 members and several dissident factions of the demobilized Revolutionary Armed Forces of Colombia (FARC) which together have also have approximately 3,000 members. Beyond drug trafficking, these groups are also involved in extortion schemes and illegal gold mining, particularly in Antioquia department, where multinational mining companies' staff and assets have been targets of sabotage and assassination.
There is a significant risk of repetition of the nationwide protests that paralyzed Colombia in late 2019. The leaders of the protests agreed to lift the strike to pursue negotiations with the government over numerous grievances ranging from economic to social inclusion to the peace process issues. This has been further delayed by the COVID-19 outbreak, but the protesters’ demands remain unaddressed. Therefore fresh protests are highly likely in late 2020 and through 2021. Elsewhere, protests over oil and mining projects are likely. The curtailment of local authorities’ powers to legally block extractive projects, following several court rulings, is likely to result in increased protest activities near proposed developments.
Relations with Venezuela have been strained by large inflows of Venezuelan refugees and the presence of ELN insurgents in Venezuela. Relations are deteriorating further as President Iván Duque no longer recognizes Nicolas Maduro as Venezuela’s president, but instead recognizes opposition leader Juan Guaido as the legitimate leader of Venezuela. Maduro accuses Colombia of tolerating plots to unseat him. Despite this, and the occasional border incursions by Venezuelan troops, prolonged armed confrontations between the two countries remain unlikely. There is a residual risk of accidental infractions in a disputed maritime zone with Nicaragua following a 2012 ruling by the International Court of Justice (ICJ) that granted previously Colombian-held maritime territory to Nicaragua.
The Internal Armed Conflict in Colombia is an asymmetric war that has been going on in Colombia since 1960 and several armed actors are involved, mainly leftist guerrillas, right-wing paramilitaries, drug traffickers and other local groups that, according to their interests, establish alliances or dispute for existing resources. Following the Peace Agreements reached in 2016 (during the government of Juan Manuel Santos), the conflict is currently in a transition phase. These agreements led to the partial demobilization of the main guerrilla organization, the Revolutionary Armed Forces of Colombia - People's Army (FARC-EP), which has caused a power vacuum that is being filled by other armed actors.
Indeed, contrary to their objective, these agreements have led to an increase in violence, as territories previously controlled by the FARC are disputed between those that are now the main guerrilla groups: the ELN (National Liberation Army) and FARC dissidents (armed organizations made up of former FARC-EP combatants, whose members did not accept the aforementioned peace agreements and returned to arms); as well as drug trafficking groups, such as the Clan del Golfo (Gulf Clan).
These groups seek to control strategic points, such as the exits to the Pacific, the borders with Venezuela, Ecuador and Brazil and the entrance to Central America, with the aime of taking control of the illegal rents/activities (drug trafficking, illegal mining, illegal fishing, extortion, kidnappings, murders and human trafficking) that constitute their main sources of financing. This is why,by looking to their location, it can be understood why departments such as Sucre, Antioquia, Córdoba, Nariño, Briceño, Ituango, among others, suffer the highest levels of armed violence.
The Colombian armed conflict has caused a multitude of victims in the disputed areas, including population displacements and forced recruitment of minors, and is one of the main factors of social discontent. Although the aforementioned threats would not directly affect FCC projects in the country, these types of activities are commonly related to extortion, robberies and intrusions that may have a negative impact.
Overall, Colombia ranks 140 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.
Colombia is not currently among the most cyber-attacked countries in the world according to Kaspersky cyber threat map.
A yellow fever vaccination certificate is required for travelers arriving from countries with risk of yellow fever transmission. A single dose of YF vaccine is sufficient to confer sustained life-long immunity against the disease; it should be taken ten days in advance to be fully effective.
Colombia ranks 65 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).
Temperatures in Colombia, located along to the equator, remain steady throughout the year. The dry and rainy seasons vary by region but generally rain is most common in April and May and again in October and November. Colombia's climate is tropical and humid along the Caribbean coast and in the Amazonian regions yet arid in the Guajira desert. All zones located above an elevation of 3000 meters have a generally cold climate.
Torrential rains and subsequent floods and landslides are common, often leading to casualties and blocked roads. This is especially true during the rainy seasons, which typically occur in April-May and October-November.
Weeks of torrential rain in the first half of 2017, the worst seen in the country in the past six years, resulted in major destruction in large areas of the country, notably the April 1 landslide that devastated Mocoa, the capital of Putumayo department, resulting in some 300 deaths. Flooding and landslides washed away or blocked many roads and bridges and resulted in regular power and water outages.
From June until the end of November, the northern Caribbean coast is regularly affected by tropical storms. While direct hits by hurricanes and tropical storms are relatively rare, storm systems can bring torrential rain, wind, and associated flooding and material damage to the country.
Wildfires are common, particularly during periods of drought and high temperatures.
Colombia is located in an active seismic and volcanic zone. Volcanic activity in Colombia is monitored by Ingeominas, the Colombian geological service.
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