Colombia country brief

Overview

Australia and Colombia enjoy expanding relations, based on trade, investment and cooperation on a range of international issues, including the environment, agricultural development, climate change, transnational crime and disarmament.

The two countries established diplomatic relations in 1976, when Australia’s first Ambassador to Colombia, A.H. Loomes presented credentials. The Australian Embassy in Santiago, Chile, is accredited concurrently to Colombia. In addition, Australia has a Consulate-General, managed by Austrade, as well as an Australian Federal Police Liaison Office in Bogotá. Colombia has an Embassy in Canberra.

The Republic of Colombia, located in north-west South America, is slightly smaller than South Australia and Victoria combined. Colombia is dominated by the Andes mountain range in the north and west, and the Amazon and Orinoco river basins to the south and east. Colombia is experiences a range of climatic conditions depending on the land elevation and prevailing winds, including desert in the far north, savannah in the east, tropical rainforest in the south and temperate to cold climates depending on the altitude. Colombia also has a string of islands in the western Caribbean. Colombia is derived from Christopher Columbus’ name. The capital of Colombia is Bogotá.

Colombia’s population is approximately 48.2million (2015 est). The main ethnic groups are mestizo (58 per cent), white (20 per cent), mulatto (14 per cent), black (four per cent), mixed black-indigenous (three per cent) and indigenous (one per cent). Roman Catholicism is the main religion with up to 90 per cent of the population identifying as Catholic. Spanish is the official language of Colombia.

Political overview

Background

The Spanish expedition led by Alonso de Ojeda in 1499, which sailed along the northern coast of South America, marked the beginning of the conquest of Colombia. By 1538, the settlement of Santa Fe de Bogotá (now Bogotá) was established, and the area was governed as part of the vice-royalty of Peru. By 1718, Bogotá had become the capital of the new Spanish vice-royalty of New Granada, which also consisted of modern-day Ecuador, Panama and Venezuela.

In 1819, Simon Bolivar defeated Spanish forces in a battle at Boyacá and independence from Spain was declared. This led to the formation of the Republic of Gran Colombia, encompassing Ecuador, Venezuela and Panama. By 1830 Gran Colombia had collapsed due to the secession of Venezuela and Ecuador, and the Republic of New Granada emerged, comprising Colombia and Panama.

After several experiments with a federalist model of government, the Republic of Colombia was declared in 1886 and Panama seceded in 1903. Colombia was the first constitutional government in South America.

Political tensions between the conservative right and progressive left came to a head in La Violencia (1948-1958), a period during which an estimated 250,000 people died. La Violencia was resolved by the formation of a National Front in which the two main political parties, the Liberal and Conservative Parties, agreed to rotate the presidency and share cabinet positions, which continued until 1974.

During the 1960s, several guerrilla groups emerged due to continued social, economic and political problems, including the FARC, the now demobilised M-19, the National Liberation Army (ELN), the Popular Liberation Army (EPL) and the indigenous-based group Quintin Lame. The FARC and the smaller ELN emerged as the major guerrilla groups. Their struggle has largely lost its ideological flavour and in the 1980s and 1990s the two groups became heavily involved in the lucrative narcotics and kidnapping industries.

Violent crime and kidnappings, while still high, reduced significantly under President Uribe, who won the 2002 elections. Under the “law on peace and justice”, negotiations with the main right-wing paramilitary groups led to over 40,000 paramilitaries demobilising and giving up their arms, although some right wing groups consolidated their membership and continue to be involved in organised crime.

Under Uribe, the FARC suffered significant setbacks in its guerrilla campaign as its control of areas of the Colombian countryside diminished. A 2008 raid by elite Colombian troops was successful in releasing 15 more long-term hostages, including the high-profile French-Colombian national and former Senator, Ingrid Betancourt, and three American contractors. The raid was a significant blow to the FARC, as Betancourt and the US hostages were a powerful bargaining tool. In the same year, FARC leader Manual Marulanda died from a heart attack and a controversial incursion into Ecuador by Colombian forces resulted in the death of senior FARC figure Raul Reyes. However, the incursion led to Ecuador and Venezuela breaking off diplomatic ties with Colombia.

System of Government

Colombia has a democratically elected representative government with a strong executive. The President, who is the head of state and government, is elected for a four-year term and may stand for one consecutive re-election. The legislature is a bicameral congress consisting of a 102-member Senate and a 166-member Chamber of Representatives, with all members directly elected for four-year terms.

In recent decades, Colombia has enjoyed constitutional and institutional stability based on the strict separation of powers between the executive, the legislature and the judiciary, and the relatively weak influence of the military in government affairs.

Recent developments

President Santos received the Nobel Peace Prize on 10 December 2016 for his efforts to bring peace to Colombia.

The award followed the 30 November 2016 Congressional endorsement of an agreement with the FARC guerillas was lost on 2 October 2016 by 50.2 per cent. A subsequent agreement ending the 52 year-old armed conflict with the FARC. The United Nations is assisting in its implementation which will include, for example, setting the transitional justice system into motion, conducting the humanitarian demining of the territory, reintegrating former guerrilla members into civilian life, executing rural reforms, and replacing illicit crops with legal crops.

The next Presidential election is scheduled for May 2018, and the next Congressional election is scheduled for March 2018.

Foreign Policy

After many years focused on internal developments, Colombia is projecting itself as open for business and as a global partner for cooperation, including trade and investment, security, technology, education, and energy. The Santos administration has significantly expanded Colombia’s international engagement, both bilaterally and multilaterally.

Colombia is a founding member of the outward-looking and trade-liberalising trading bloc, the Pacific Alliance (along with Chile, Mexico and Peru). Colombia served as a non-permanent member of the UN Security Council for 2011-12, and commenced accession to the OECD in June 2013. Colombia is an active member of the Forum for East Asia-Latin America Cooperation (FEALAC) and seeks membership of APEC.

Constructive relations within Latin America and the Caribbean are also a priority for Colombia. Following a dispute in 2008 which led to interruptions in diplomatic ties, relations with neighbours Venezuela and Ecuador have been stable. Colombia is an active member of the Association of Caribbean States, and the Organization of American States (OAS). A territorial and maritime dispute with Nicaragua, on which the International Court of Justice (ICJ) ruled in 2012 that Colombia would cede maritime territory, is a source of tension with its northern neighbour. The United States is Colombia’s most important trading partner. The US-Colombia free trade agreement came into effect in May 2012 and has boosted Colombia’s most significant trading relationship withUS goods imports from Colombia totaling USD14 billion in 2015 and US goods exports to Colombia in 2015 totaling USD17 billion. Colombia’s top export categories to US in 2016 were: mineral fuels, previous metal and stone, coffee, tea and spice, and live trees and plants. US-Colombia engagement is being further developed following the achievements of “Plan Colombia” through the Colombia-US High Level Partnership Dialogue.

Colombia completed negotiations for an FTA with the Republic of Korea in June 2012. The FTA is Colombia’s first in the Asia-Pacific region and is seen as a further bridge towards greater integration. In December 2012 Colombia commenced FTA negotiation with Japan, negotiations are in the final stages. In May 2015 Colombia and China commenced an FTA FTA feasibility study.

Narcotics

Colombia is a major global supplier of cocaine, marijuana and heroin. The illicit narcotics trade is estimated to be worth around five to ten per cent of GDP. The cultivation and trafficking of drugs continues to have a negative impact on security, the formal economy and the environment. In particular, the use of fragile tropical and jungle ecosystems to grow cocaine, including the use of agricultural chemicals, has caused considerable environmental harm. At the close of 2015 there were 96,000 hectares under cultivation, an increase of 39% from the previous year. The low point was 2012 where there were only 48,000 hectares under cultivation.

Human rights

While human rights abuses continue in Colombia, the situation has improved with an overall lessening of civil conflict and policy reforms. A program of land restitution, commenced by the Santos administration in 2011, has begun to address social injustices arising during the country’s civil conflict. Historically, the major source of human rights abuses in Colombia has stemmed from the internal armed conflict between the Colombian army, paramilitaries and the guerrillas. A July 2013 report showed that across the length of the conflict, 5,7 million have been forcibly displaced, 220,000 have died, and more than 25,000 have disappeared.

Australian Ministers and diplomatic officials regularly raise the issue of human rights with Colombian authorities.

Bilateral Relations

The first records of Colombians in Australia dates back to four people included in the 1911 Census. Colombian migration to Australia remained negligible until the Australian Government’s assisted passage migration program was extended to Latin American countries, including Colombia, in the late 1960s. The 2011 Census recorded 11,317 Colombia-born people in Australia, an increase of 98.3 per cent from the 2006 Census. More information on the Colombia-born community in Australia can be found at the Department of Social Services’ Community Information Summary page.

Australia and Colombia have a history of working together in the international community since the end of the Second World War. Australia and Colombia both contributed combat forces to the 17-nation United Nations Command during the Korean War (1950-53) and both work together to pursue free and fair agricultural trade through joint membership of the Cairns Group. Australia and Colombia cooperate to advance climate change negotiations as members of the Cartagena Group. Both countries participate in the WTO Trade in Services Agreement negotiations.

There has been increasing engagement between Colombia and Australia in the beef and dairy sectors following a visit by visit to Australia by 170 delegates from the Colombian Cattle Federation to Queensland in October 2013. This was followed by a beef and dairy cattle delegation comprising representatives from government, industry and institutions who visited Australia in February 2014.

In 2001, the Australian Government established the Council on Australia-Latin America Relations (COALAR) which aims to enhance commercial, political and cultural relations between Australia and Latin America. Since its inception, COALAR has been active in promoting business, education, tourism and cultural links between Australia and Latin America. For updates on COALAR activities and information on the annual grants program, follow COALAR on Facebook.

People to people links

Colombia is second to Brazil as a source of international students to Australia from Latin America, with more than 14,000 Colombian students enrolled in Australian educational institutions as of December 2015, up from 8,904 as of December 2011. Enrolements were up over 20 per cent in the first ten months of 2016. Australian education fairs in Colombia consistently attract thousands of interested students. Some universities in Australia now offer scholarships to Colombian students.

The University of Queensland’s Sustainable Minerals Institute and the CSIRO are expanding their research links with Colombian institutions, particularly in the areas of mining and water management.

While the majority of Colombian students undertake ELICOS courses (English Language Intensive Courses for Overseas Students) in Australia, there is also a large demand for university and vocational education and training placements.

Development assistance

Since 2010, there have been 32 Australia Award Fellowships granted to Colombia.

From 2010 to 2014, Australia provided $100 million in official development assistance to Latin America, including 250 Australia Awards scholarships. Colombia received 23 Australia Awards Scholarships. The regional program has now closed, though some activities that have already been funded will continue until 2017. In support of sustainable economic development in Colombia, Australia provided over $1.2 million from a $10 million Multilateral Investment Fund with the Inter-American Development Bank. Australian funds are helping to increase the availability of savings products for low income women; and providing training on financial services, income generation, and other cross-cutting issues including child protection, environment and human rights.

The Australian Embassy in Santiago de Chile manages a Direct Aid Program (DAP), which provides financial support to a broad range of projects in Colombia, including community development projects and those designed to address challenges in vulnerable communities.

Economic overview

At a glance

For latest economic data refer to Colombia Fact Sheet [PDF 30 KB]

Economic and trade policy directions

Colombia is Latin America’s oldest and most stable democracy and boasts strong macroeconomic foundations, has never defaulted on a foreign debt or had hyperinflation in its history which has created an environment factorable to conducting business. The local banks are very liquid and the country has a very strong and independent Central Bank. A new tax reform passed through congress in December 2016. All these conditions make it a prime target for Australia’s expanding engagement with Latin America.

The Santos administration pursues outward-looking, market-oriented trade and economic policies aimed at attracting foreign direct investment, maintaining macro-economic growth and stability, and improving the business environment.

Colombia has 13 free trade agreements including with the United States, Canada, the European Union and South Korea, is a founding member of the Pacific Alliance (with Peru, Chile and Mexico) and is progressing its ascension to the OECD. Through trade agreements, Colombia has access to 47 countries and more than 1.5 billion consumers.

Colombia has a population of 48.2 million (2015) and has five cities with populations over two million – Bogotá (7.6 million), Medellin (2.4 million), Cali (2.3 million), and the Barranquilla/Cartagena region (2-3 million). Its large population and geographical position, linking the Pacific and Caribbean, provides Colombia with significant opportunities for future economic growth.

The cattle segment is the largest in Colombia’s agricultural sector, accounting for around 20 per cent of agricultural production and 3 per cent of agriculture GDP. Of the country’s 500,000 cattle ranchers, 82 per cent own less than 50 animals and half of them own less than 10.

Colombia is the second largest coffee producer in the world. Approximately 20 per cent of all cultivated land in Colombia is dedicated to growing mild Arabica beans, mostly for export. According to the Unit of Rural Agricultural Planning, 92 per cent of the country’s territory is rural, and only 35 per cent of the nation’s agricultural land is put to efficient use.

In October 2015, the government launched the program “Colombia Siembra” which involves an investment of USD$500 million from 2016-2018 and aims to boost agricultural growth from 2.3 per cent in 2014 to 6.2 per cent in 2018.

Economic outlook

Low commodity prices, especially of oil and coal, continue to impact negatively on Colombia’s economic performance. While exports have declined for a third consecutive year in 2016, the trade deficit has decreased by 46 per cent due to a strong fall in imports. Exports are expected to start recovering in 2017 as a weaker Colombian peso prompts higher non-commodity exports. Annual inflation in 2016 totalled 5.75 per cent, with currency depreciation and a surge in food prices as major contributors to inflationary pressures. Analysts expect better economic performance in 2017-18, owing to infrastructure spending, higher oil prices and an uptick in private investment, including as a consequence of the peace agreement with the FARC. GDP is forecasted to grow by 2.4 and 3.2 per cent in 2017 and 2018 respectively. Unemployment has stayed around 10 per cent for the last six years.

Colombia is becoming one of the strongest economies in South America, ranked by the World Bank as the best country in South America to do business in. Colombia is forecast to grow at 2.3 per cent in 2016 (Central Bank 2016), which makes it the second highest growing economy in South America after Peru (3.75 per cent), and beats a recession trend in neighboring countries Brazil, Venezuela and Argentina. In the past five years, the Colombian economy grew by an average of 4.8 per cent per annum. The country’s middle class has been increasing consistently, representing approximately 30 per cent of the Colombian population in 2014, and is expected to grow to 37 per cent of the population by 2020 and to 46 per cent by 2025.

Economic and trade relationship

While Australia and Colombia enjoy growing commercial relations in mining and energy over the long term, two-way trade in these sectors has been subject to recent short term fluctuations. Australia's two-way merchandise trade with Colombia totaled around A$487 million in 2015. Of this, total merchandise trade came to just A$112 million, so services comprised the majority of trade. Education-related services predominate, with the trade balance in Australia’s favour. Colombian goods exports have seen a 17.6 per cent increase over 2014-15 figures, reaching A$81.4 million in 2015. The stock of Australian investment in Colombia is valued at more than $3 billion, predominately in the mining sector. Since 2010, Colombia has invested in Australia around $3-4 million per year.

Although two way trade is minimal, Colombia has emerged as a country of investment and trade interest to Australian companies, presenting opportunities in mining and education, as well as potentially in agribusiness and infrastructure.

Australian businesses already have a major presence in Colombia with44 companies operating in the country (including nine ASX200 companies), particularly in the mining sector. BHP Billiton is a significant foreign investor with operations in the Cerrejon Norte coal mine complex and Cerro Matoso nickel mine. Other key Australian companies active in Colombia include; Orica, Ludowici, Runge, Ausproof, QBE Insurance, Qantas, Nufarm and Sedgman Limited, Heldwell Ltd, S&A Capital Investment Bank, Australian Drilling Associates, The Sentient Group and Redflex Traffic Systems.

Trade and Investment

Colombia is developing frameworks to encourage more foreign investment and trade, with a view to stable and sustainable economic growth. In this context, Australian expertise, and firms, are increasing their focus on supporting the policy development framework in these countries across a number of sectors. A number of areas, principally in the mining, energy and agriculture sectors and allied services industries, provide opportunities for Australian investment in Colombia. Foreign direct investment in Colombia has grown following improvements in the security situation and business environment.

Mining

Colombia has the largest coal reserves in Latin America and the Colombian Government is encouraging the development of coal-related infrastructure. Investment in the mining sector is steadily growing and focused on increasing efficiencies and productivity and reducing costs in environmental management, safety and community engagement consulting. In 2015, Colombia and Australia signed an MOU in mining in 2015. This has strengthened the ties between the Colombian and Australian mining sectors, with companies currently involved in five mining projects and investment in the sector. The most active companies currently operating and investing in Colombia include BHP Billiton, South32, and Orica, as well as other experts in diverse areas of Australian Mining Equipment, Technology and Services (METS). In May 2013, Colombia sent a Mining Best Practice Mission to Australia and announced it would join the Extractive Industry Transparency Initiative. Opportunities for Australian business range from infrastructure development, concessions, mine system operation, coal washing and remote mine site catering. Colombia also has significant reserves of gold, silver, platinum and iron ore. Ms Silvana Habib-Daza, President of the National Mining Agency of Colombia presented at Latin America Down Under in 2016.

Agribusiness

There is significant Colombian interest in Australian agribusiness expertise. The agribusiness sector provides potential for technical cooperation and technology transfer, especially in the sugar cane, dairy, livestock and tropical fruit industries. Demand for bovine genetics offer great potential for Australian breeders of tropical cattle such as Brahman, allowing the importation of Australian bovine embryos have been in place since 2008.

Other commercial opportunities

Other prospects include rail and port infrastructure, and information technology. Colombia has also shown interest in defence-related technology through contact with a range of Australian companies. Colombia's tourist industry on the Atlantic Coast is experiencing growth and opportunities may exist for Australian manufactures of ferries, catamarans and leisure craft. There is also growing interest in Australian sports training and development and wines, with several brands now available in Colombian supermarkets and restaurants.

Information on doing business and opportunities in Colombia.

High level visits

August 2016: Minister for Trade, Tourism and Investment Steven Ciobo travelled on an official visit to Colombia to explore the potential for a Free Trade Agreement between Australia and Colombia.

March 2015: First Assistant Secretary of the Americas Division, Brendon Hammer travelled to Colombia to participate in the International Institute for Strategic Studies Cartagena Dialogue.

February 2015: Australia’s Minister for the Environment, Greg Hunt MP visited Bogotá to meet with senior level officials including Colombia’s Minister for the Environment and Sustainable Development, Mr Gabriel Vallejo López and Vice Minister for Foreign Affairs, Ms Patti Londoño.

November 2013: Colombian Vice Minister for Foreign Affairs, Patti Londoño, visited Australia to conduct senior level talks.

May 2013: Then Parliamentary Secretary for Trade, the Hon. Kelvin Thomson represented Australia at the VII Pacific Alliance Summit in Cali, Colombia.

April 2012: Then Minister for Trade and Competitiveness, the Hon. Craig Emerson, led an Australian business delegation to Colombia, where he met the Colombian ministers responsible for trade, foreign affairs, mining and energy.

June 2012: Then Prime Minister, the Hon. Julia Gillard, met President Santos in Brazil during the Rio+20 summit.

March 2010: Colombia’s then Minister for Foreign Affairs, Jaime Bermudez, visited Australia.

March 2009: Colombia's then Minister of Trade, Industry and Tourism, Mr Luis Guillermo Plata, visited Australia in, accompanied by a business delegation. The visit led to the conclusion of a Memorandum of Understanding to strengthen bilateral trade and investment, which trade ministers signed in Geneva on 29 November 2009.

Last Updated: January 2016

Last Updated: 2 February 2017