The United Kingdom, Ireland and Colombia have deep relationships, these countries have worked together to reach a democratic and free World as John Lennon song “Imagine” highlights. The first close relations came from 1811 when British Legion came to Colombia to help to achieve Colombians independence, lots of British and Irish married with beautiful Colombian women such as Gr. Mac Gregor and others such as Irish Gr. O’Leary got important medals due to be a real soldier that helped to achieve Colombia independence. Their Foreign Direct Investment (FDI) brought a new style of mining management on the second half of XIX and British Petroleum came to bring royalties to local government at the beginning of second half of XX century. Nowadays about 2,680 British and Irish live in Colombia, they work as employers and employees and have family, most of them live in Santa Marta, Medellín and Bogotá. Nevertheless, trade between these countries faced a decline since 1962, Colombia exports to these countries basic products while imports finished products, in the last 14 years the trade balance is in favor of Colombia. A business opportunity highlighted to improve economic relations is the GDP-contra cycle movement between these countries, it means when the United Kingdom face a economic decline, they can invest by sure in Colombia and the other way around it true also.
Author: Humberto Bernal,
Economist,
e-mail: zhumber@gmail.com
Twitter: Humberto_Bernal
The United Kingdom and Ireland have contributed to global democratic and economic development, for instance when Spain’s colonies started their process of independence about 7,000 legionaries from United Kingdom, Ireland, Germany, Italy and France helped to achieve Colombia independence. Most of this legionaries were from United Kingdom and Ireland and they came between 1811 and 1819. Some British militaries who were important in this democratic target were Gr. Sir Gregor Mac Gregor married with Latin American woman (Simon Bolivar’s cousin), he backed Antonio Nariño’s campaigns, other important military was Gr. Tomas Manby married with Latin American woman María Josefa Fortoul y Garcia, he helped in Simon Bolivar’s campaigns. Finally, the Irish Gr. Daniel Florencio O’Leary married with Latin American woman Soledad Soublette y Jerez de Aristeguieta (Simon Bolivar’s family), he was a celebrated real soldier who deserved lot of medals such as Cruz de Libertadores de Venezuela. Therefore, as one can see British and Irish helped to achieve that World that Jon Lennon sang in his song Imagine.
From XIX Colombia has been a interesting place for British and Irish as above paragraph points, nowadays there are 2,680 people from these countries as figure 1 show. The volume of British and Irish faced an increase since 1960 when there were 505 people, nevertheless between 1990 and 2009 there was a decline due to Colombian internal war conflict that pushed both the natives and foreigners to refuge abroad. Nowadays, British and Irish like places to live such as Santa Marta with 53.4% of total residents from these two countries, Bogotá with 12.9%, Medellín with 5.2% and Andalucía with 4.3% as figure 2 shows.
Figure 1. British and Irish residents in Colombia 1960-2011
(number of people)
Source; World Bank Data, Bureau of Economic Statistics (DANE) and Migration Colombia.
British and Irish who live in Colombia are young, from these residents 36.2% are between 0 and 16 years old; 19.0% between 17 and 30; and 37.1% between 31 and 60. Women from these two countries are 44% of total British and Irish in Colombia; 50.0% of this residents are single while 37.0% are married, there are divorced with 4.3%. Most of them have graduate studies, it means 44.0%, and those who finished their high school are 16.4%. British and Irish work in education sector such as english teachers, they are 12.1% of total residents from these countries; there are other economic activities that are interesting for them such as mining, manufacture and financial services with 6.0%, 3.45% and 1.0% of total British and Irish residents in Colombia respectively. Residents work such as employees and employes, in the first case accounts with 26.7% of total residents from these countries and the second case accounts with 7.8%, the others work on their own small business, the unemployment faced by them is low due to their high productivity and knowledge, same there are few of them that have broken the Law, according with government body in 2013 there are five people from these countries in this situation. This information come from Census of 1993, Census of 2005, Migration Colombia and Bureau of Statistic in Colombia.
Figure 2. British and Irish residents in Colombia by municipality
(%, percentage of people)
Source; World Bank Data, Bureau of Economic Statistics (DANE) and Migration Colombia.
Big business between British, Irish and Colombians
The United Kingdom and Ireland have invested huge money in Colombia to develop mining sector, crude oil sector, transport sector, financial sector and social services sector such as health and education. The investment in mining sector started around of 1820, they extracted gold and silver mainly, the value added for Colombians were the management style to extract this precious metals and royalties. They invested in railways and public utilities in Colombia also as figure 3 shows. Their Foreign Direct Investment (FDI) faced an important decline between 1900 to 1952 due to internal war conflict in Colombia at beginning of XX century, and due to WW-I and WW-II. After 1952, British and Irish investment in Colombia increased, crude oil sector was attractive through British Petroleum Company but due to restriction to foreign capital through Law 444 of 1967 and the Andean Pact decision in 1970, FDI inflows were short in manufactured, communication and financial services sectors. After 1991 when Colombia opened her economic activity, FDI from these countries have faced an exponentially increase, the target sectors for this FDI are financial services, crude oil and communications, some main firms in 2013 from these countries are Racetrack Colombia Finance S.A; Castrol Colombia Ltda (crude oil sector), Latin American Nautilus Colombia Ltda (Comunications and transport sector); ABS Red Assist Company (Services); and Virgin communications, all of them are located in Bogotá. There is a special case to point, the close business between Colombia, United Kingdom and Ireland can be evidenced through Alpina Colombia firm, this firm is one of main desserts factory in Colombia and she has branches around the World, her capital came from these countries and her owners from Switzerland, this firm started business in 1947.
Figure 3. The United Kingdom and Ireland FDI as stock in Colombia 1880-2012
(US$ million chained of 2012)
Source: Own calculation from official sources and history books.
International trade between these countries unfortunately has faced a decline since 1962 when it reached 4.74% of colombian international trade (exports plus imports between Colombia and these two countries divided by total exports and imports from Colombia, this index is in percentage), figure 4 shows this trend. The main commodities exported by Colombia to these countries are crude oil, fruit (banana), coffee, flowers, few textiles and basic plastics, they are basic product mainly. Those commodities imported by colombia from these countries are technology (computers), pharmaceutical products, vehicles and their parts, and spirits such as Whisky, most of this products are finished ones. The balance trade in this case is in favor of Colombia, it means the value of colombian exports to these countries is higher than the imports from these countries, in 2011 it was US$749.5 million and in 2012 it was US$557.7 million.
Figure 4. The United Kingdom, Ireland and Colombia trade indicator 1962 - 2012
(%, trade indicator*)
Source: United Nations. Own calculations.
Gross Domestic Product’s cycle between the United Kingdom and Colombia is contra-cyclic in most of period analyzed (1977-2013) as figure 5 shows (correlation coefficient of -0.18), it means Colombia is a big option to invest when UK GDP’s cycle goes down and the other way around is true also. Nevertheless since the last crisis (2008), these cycles appear to be aligned (pro-cycle).
Figure 5. The United Kingdom and Colombia GDP cycle
1977 - 2013
(quarterly data normalized)
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