Colombia woks hard to put the end of internal war which has been expensive in terms of human life and economic development. Through right decisions, Colombia is close to finish this irrational internal war conflict and she will enjoy her golden age finally. One can say that the government's future agenda is to keep security for all citizens in order to get a high economic development. Although Colombia faces problems in economic indicators such as income distribution (GINI about 0.548), unemployment rate about 9% and lacking of work opportunities for juveniles, there are economic sectors and residents who are enjoying Colombia as must be.
Foreigners residents in Colombia are about 109,953 in 2010, they study, work, enjoy their last years as pensioners in Colombia, there are others who are waiting for their opportunity as unemployed. Most of foreigners residents work as employees but there are many that have set up their business, and the most important most of them are young people who are looking forward to get high quality of life in this Country. This note shows the main economic and social figures of foreigners residents in Colombia from 1960 to 2010-2011.
Some of the main conclusion are foreigners residents in Colombia are growing as well their business, FDI in Colombia faces high rate of profitability in about 14% of the total investment and 80% of total foreigners residents are between 0 and 60 years old where the bulk is between 16 and 40 years old. Therefore Colombia is close to reach her golden age.
Author: Humberto Bernal,
Economist,
e-mail: zhumber@gmail.com
Colombia works hard to be interesting for foreigners and to be integrated in the global economy, she spends economic resources through embassies, commercial offices to promote Free Trade Agreements (FTAs) and of course to promote Foreign Direct Investment (FDI). The results can be classed as acceptable, Colombia reached FTAs with Chile, Mexico, EFTA, United States, Canada and European Union (EU), CAN, Northern Triangle, GSTP, LAIA, some of these FTAs are partial as the EU. Exports from Colombian (only goods) showed an increase from 11.9% of her GDP in 1960 to 16.9% in 2011 and her FDI inflows showed a relevant increasing through 60’s to 70’s and in the first decade of XXI century. However, Colombia trades crude oil and coal as the main commodities in about 50% of her exports and 50% of her total FDI inflows goes to these sectors, this fact lets high dependency in no removable resources and its cost is huge if their prices goes down or when their reserves goes to the end (for crude oil this scenario will come at the end of the next six years). Therefore Colombia has to work in deep to improve their industrial sector through new technology and attraction of foreigners who can give added value to economy, as a objective Colombia has to reach economies of scale under fair income distribution. This note shows a novel analysis about foreigners in Colombia, although government has the statistical information (data), she does not work continually on it to produce reports to make attractive Colombia for potential foreigners residents.
There are 109,953 foreigners as residential in Colombia by the end of 2010, this volume of people has not showed a big change since 1993 when Colombia faced high violence and crude internal war as figure 1 shows. Before 1993 Colombia was so attractive to foreigners, for example in 1973 there were a positive net flow of travelers of 277, it means many foreigners found Colombia attractive, in contrast there were a negative net flow of travelers of -140,697 in 1998, it means many foreigners and colombians emigrated to other countries.
Figure 1. Foreigners residents in Colombia 1960-2010
(quinquenniel data, number)
Source: Government Bureau of Statistics (DANE).
Nowadays Colombia shows a deep change in positive way in this field. Foreigners come to Colombia as a tourists, to set up business, to work as employees, to study or to spent the last years of their life as pensioners and they are so happy, therefore Colombia is coming back to her golden years faced in the 60’s and 70’s in terms of attractiveness for foreigners. Now, what are foreigners residents in Colombia doing?. Many foreigners are working in Colombia as employers and employees, for the first case about 11.6% of these foreigners in 2010 own a business and 19.9% work as employees, the 25.4% are students, pensioners reach 3.7%, as in contradiction of popular knowledge, there are few pensioners compared with foreign work force and of corse there is a foreigners’ unemployment rate of 2.8% in 2011, this rate is lower than national unemployment rate which is about 9%. Foreigners residents in Colombia settled in Bogotá with 21.8% of total foreigners in 2010; North of Santander 10.7%; Antioquia 6.6%; Bolivar and Valle both with about 6.3%.
Those foreigners and multinational who decided to invest in Colombia have increased in the last years. Colombia increased her FDI as stock (foreign capital) from US$12,916 million in 1960 (at constant prices of of 2011) to US$137,852 million in 2011 (at constant prices of 2011) where the first decade of XXI century showed the highest annual growth rates. Figure 2 shows the number of foreign firms (according to FMI methodology) in Colombia, the number of these firms passed from 50 in 1960 to 1,879 in 2010-2011 (this number does not include firms from Panama due to lot of Colombians have registered their firms in this country to evade taxes, there were about 385 firms from Panama in 2011).
Figure 2. Total foreign firms in Colombia*
(by decade, number)
Source: Government Bureau of Statistics (Superintendencia de Sociedades).
The vale added of these foreign firms was about 33% of the GDP in Colombia in 2011 and their main activities are Wholesales with 27.7% of total number of foreign firms, Real Estate with 19.9%, Manufacture with 18.9%, and Crude Oil and Mining with 10.7%. Their profitability is high, while it was 2.9% of total capital invested in 1960, it increased to reach 14.1% in 2011, therefore Colombia is good place to invest. The main regions where they do their economic activity are Bogotá, Cundinamarca, Antioquia, Valle and Atlantico respectively. In the last years big Multinational Enterprises (MES) arrived to Colombia, for instance SABMiller (UK, South Africa), Falabella (Chile), TACA (El Salvador), Corpobanca (Chile) and Cencosud (Chile) as many others. The future economic sector what can be interesting for foreigners are fishing, agriculture, entertainment, real estate and retail sales due to Colombia and the World demand these types of goods and services.
Foreigners residents in Colombia are from everywhere but mainly from Venezuela with 34.0% of total foreigners residents in 2010, the United States 13.7%, Ecuador 10.4%, Spain 4.8%, Italy 2.0%, Germany 1.7% and the United Kingdom 1.0%. It is important to highlight that 80.0% of total foreigners residents are less than 60 years old as figure 3 shows, moreover 39.0% are between 16 and 40 years old. According to statistics, those foreigners from Latin America countries come as employees and those from the States and Europe come as employers, nevertheless there are Latin Americans as employers and the other way around also but in less volume.
Figure 3. Foreign people in Colombia by age
(Cumulative percentage %)
Source: Government Bureau of Statistics (DANE).
Although Colombia has improved their number of foreigners residents, other countries in the region faced more inflows of foreigners residents, for example Chile with a total population of 17 million had 320 thousand of foreigners resident in 2010 and Argentina with 42 million of population faced a 1.5 million of foreigners residents in 2010. Therefore Colombia can face an unbalance in terms of foreigners flow what can be expensive in terms of economic development for the next years.
The main Conclusions of this note are Colombia have improved indicators about global openness, for example her exports increased as percentage of her GDP; the number of foreigners residents increased and they are young work force; there are more foreign firms around Colombia. However, Colombia is lagging in fair income distribution, high unemployment and lack of security still. Hoping, Colombia will reach her golden age after finishing her internal war conflict.
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