Colombia flag

Colombia country brief

Introduction

Australia and Colombia enjoy expanding relations, based on trade, investment and cooperation on a range of international issues, including the environment, agricultural trade, 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.

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 Boyaca 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 outlook

Colombia has a democratically elected representative government with a strong executive. The President, who is the head of state, 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 political developments

President Juan Manuel Santos, of the conservative-liberal Social Party of National Unity (UP), won re-election in a closely fought run-off ballot in June 2014. Santos had based his campaign on a negotiated end to insurgency by the Revolutionary Armed Forces of Colombia (FARC) terrorist group, and was challenged by hardliner and former cabinet member Óscar Ivan Zuluaga (also a protégé of Santos's predecessor – and former ally – President Álvaro Uribe). Santos had generally enjoyed widespread approval since his election in June 2010 for his handling of the economy, international relations and the fight against corruption and insurgency. While maintaining Uribe's tough stance on security and strong ties with the United States, he had also emphasised an agenda of social and economic reform. Negotiations for an end to the 50-year conflict with the FARC were the key domestic agenda in the second half of the government's term and are likely to continue to be a major focus of Santos's new term. Santos's foreign policy priorities haveincluded the diversification of the country's trade and investment links, both within the region and towards the Asia Pacific and Europe. President Santos continues efforts to improve Colombia's international engagement and image abroad, such as through commencing accession to the OECD, cooperation with NATO and pro tempore presidency of the Pacific Alliance, which it handed to Mexico in June 2014.

Political history—guerrilla warfare and the peace process

The deep political divisions shaping Colombia's modern development have strong historical roots, emerging shortly after independence from Spain. The political tension 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 Ejercito Nacional de Liberacion (ELN), the Ejercito Popular de Liberacion (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 some 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.

Peace talks between the FARC and the Colombian government commenced in Havana, Cuba, in November 2012. The negotiations focus on five agenda items: agrarian reform (including access to land); political participation for FARC members; drug trafficking; reparation for victims of the conflict; and the logistics of ending the armed conflict. The government and the FARC announced in May 2013 that an agreement had been reached on agrarian reform, which included a land fund to redistribute illegally held or underused land to displaced people. Negotiations continue with varying degrees of optimism on a successful outcome.

International Relations

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), seeks membership of APEC and has expressed interest in participating in the Trans-Pacific Partnership Agreement (TPP) negotiations.

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. It is an additional boost to Colombia’s most significant trading relationship which. in 2012, accounted for 36.9 per cent of Colombia’s merchandise exports and 24.3 per cent of its merchandise imports.. US-Colombia engagement is being further developed following the achievements of “Plan Colombia” through the Colombia-US High Level Partnership Dialogue.

In 2011, seven per cent of Colombia’s merchandise exports were destined for the Asia-Pacific. 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 May 2012, during a visit to China by President Santos, Colombia and China signed nine agreements, and agreed to commence an 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.

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.

Economic overview

At a glance

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

Economic and trade policy directions

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. Unemployment averaged around 9.5per cent in 2013, around five percentage points less than average of the previous decade. President Santos has undertaken to balance the budget by 2014 and pledged to reform the labour market, address corruption and spend more on education.

Colombia has a growing network of free trade agreements (FTAs), including with the United States, Canada, the European Union and South Korea. It is currently in the process of ratifying the Pacific Alliance FTA. Exports to China have increased by 85 per cent since 2006. China is now Colombia’s second largest import source and export destination, accounting for 5.5% of exports and 16.5% of imports in 2012.

Colombia has a population of 46.6 million 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.

Economic outlook

The IMF forecasts Colombia’s real growth will be 4.3 per cent in 2013. This follows strong growth in 2011 and 2012 (6.6 per cent and 4.0 per cent respectively) driven by expansion in mining and oil production and fixed investment. Managing inflation is a policy priority against a background of sustained economic growth. The estimated inflation rate for 2013 is 2.2 per cent, dropping from 3.2 per cent in 2012. This exceeds the 2-4 per cent target set by the central bank of Colombia, Banco de la Republica. Inflationary pressures will be tempered, at least in part, by increases in production capacity off the back of strong growth in foreign investment.

Colombia has encouraged increasing levels of foreign direct investment in recent years. Colombia is ranked 39 of 183 economies in World Bank indicators on ease of doing business, an improvement over the previous five years. According to United Nations Conference on Trade and Development, flows of foreign direct investment in Colombia reached US$15.8 billion in 2012, more than doubling since 2010. The principal sectors for investment were petroleum and mining.

Bilateral Relationship

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 11,318 Colombia-born people in Australia, an increase of 98.2 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 page.

Australia and Colombia have a history of working 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.

Both countries pursue increasing high-level contact. In November 2013, Colombian Vice Minister for Foreign Affairs, Patti Londoño, visited Australia to conduct senior level talks. In May 2013, Mr Kelvin Thomson, then Parliamentary Secretary for Trade, represented Australia at the VII Pacific Alliance Summit in Cali, Colombia. In April 2012, the then Minister for Trade and Competitiveness, Dr Craig Emerson, led an Australian business delegation to Colombia, where he met the Colombian ministers responsible for trade, foreign affairs, mining and energy. In June 2012, the then Prime Minister, Julia Gillard, met President Santos in Brazil during the Rio+20 summit.

Colombia's then Minister of Trade, Industry and Tourism, Mr Luis Guillermo Plata, visited Australia in March 2009, 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. Colombia’s then Minister for Foreign Affairs, Jaime Bermudez, visited Australia in March 2010.

There has also 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.

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 and 29 Australia Awards Fellowships. 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.

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.

Economic and trade relationship

Australia’s two-way travel services trade with Colombia totalled $277 million in 2012, with $269 million in travel services exports from Australia, a reflection of the strong education links Australia has developed with Colombia. 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 totalled around $100 million in 2013, an increase from $74 million in 2012. Australian exports to Colombia in 2013 reached almost $47 million (up from $28.5 million in 2012). Major export items included barley, printing machinery and parts, electrical equipment, and civil engineering equipment and parts. Australia's imports from Colombia amounted to $54 million (up from $45 million in 2012), with coffee being the main import.

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. In 2009, Australia and Colombia signed an MOU on “Strengthening Bilateral Trade and Investment”. Colombia has expressed interest in a bilateral FTA with Australia, and is an observer in a number of APEC committees.

Australian businesses already have a major presence in Colombia with 34 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.

Export opportunities

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. 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.

Education

Colombia is second to Brazil as a source of international students to Australia from South America, with over 12,000 Colombian students enrolled in Australian educational institutions in December 2013 (an increase of over 15 per cent from 2012). 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.

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.

Updated June 2014