Colombia - Industry



The National Association of Manufacturers (Asociación Nacional de Industriales—ANDI) represents firms engaged in some 40 different branches of manufacturing. ANDI was founded in 1944 to assist both large and small businesses. Since 1940, the Industrial Development Institute (Instituto de Fomento Industrial—IFI), a government-operated finance corporation, has been investing in enterprises that otherwise might not be undertaken because of high risk or lack of capital. It provides direct financing for construction, acquisition of essential machinery and equipment installation services, and working capital. Most of the industrial activity is concentrated in and around Bogotá, Medellín, Barranquilla, and Cali. Industries in Medellín produce textiles, clothing, chemicals, plastic, and printed materials.

Manufacturing accounted for 15% of GDP in 1950, 24% at its peak in 1977, and 14% in 1998. Colombia is almost self-sufficient in consumer products, which represent about half of total industrial production. The 1970s witnessed a shift in industrial development policies from import substitution to expansion of exports. While the pace of industrial growth declined slightly in the mid-1970s, it increased by 2.5% between 1977 and 1987. This growth continued into the early 1990s, but slowed by mid-decade. Industry declined by 2.3% in 1998. Manufacturing growth began to pick up after the 1997–99 recession, registering a 9.7% growth rate in 2000.

Export-oriented industries include coal and oil derivatives, chemicals, porcelain, and glass. In 1995, mining and hydrocarbons grew by 17%; the highest growth sector in the Colombian economy. That the rest of the industrial economy has been sluggish in recent years is due to a cluster of factors, including the lack of infrastructure, labor difficulties, and most significantly, the civil unrest in the countryside caused by bands of paramilitaries loyal to drug traffickers and political extremists. The decline in industry also reflects an ebb in the country's construction boom. The construction sector grew by nearly 10% a year through the early part of the 1990s, but fell to just 5.3% in 1995. Due to the effects of the recession, construction saw negative growth rates of 14.4% and 19.9% in 1998 and 1999, respectively. The construction sector began to stabilize in 2000, contracting by only 1.5%.

Colombia has five oil refineries, with a production capacity of 286,000 barrels per day. Hydrocarbon production decreased by 15.5% in 2000, but due to the rise in international oil prices, revenues were maintained. Exploration continues, but guerrilla attacks on one of the country's main pipelines caused it to shut down in 2001, demonstrating one vulnerable aspect of Colombia's oil industry.

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