With the expansion of the manufacturing sector, Colombia's has become more dependent upon industry (26% of GDP in 2001) than agriculture (19% of GDP). Coffee was by far the most important crop: its share of total exports ranged from about 40% to 65% of the annual total between 1964 and 1986, depending on crop yields and international commodity prices. In 1997, this share had dropped to only 21%, and by 2000, to 8%. A fall in coffee prices in 2001 reduced coffee's share further, to 6.2%. Non-traditional exports, however, increased 5% in 2001. Colombia's policy has been to reduce its dependence on coffee exports because of widely fluctuating world market conditions, and to encourage other agricultural exports, especially sugar, bananas, rice, potatoes, and cotton. The government has also attempted to attract investment in manufacturing and mining projects. Mining has been the area of the most impressive growth; Colombia became a net exporter of petroleum in 1986, and coal has become a major export as well. New oil output from the Cusiana field and other fields helped Columbia reached a record production level in 1999—830,000 barrels a day. By 2002, production had been reduced to 591,250 b/d. The share of oil exports to total exports dropped from 34.8% in 2000 to 24.9% in 2001. There is concern that without substantial new crude oil discoveries, Columbia will revert to being a net importer of crude oil again within a few years. Exploration of vast areas of likely territory is inhibited by the occupation of about 40% of the country by groups (mainly the FARC and the ENL) that are not only trying to overthrow the government, but which have made the oil industry infrastructure the prime target of their guerrilla attacks. The Trade Development Bureau's PROEXPO Fund (since renamed the Foreign Trade Bank) was established in 1967 to increase the volume of non-traditional exports and to provide a flexible exchange rate and special tax incentives. Foreign direct investment (FDI), which reached a yearly rate of $5.56 billion in 1997, fell to a little over $2 billion a year in 2001 and 2002, as the guerrilla attacks continued unabated (an estimated 3,500 persons were killed in attacks in 2002, with another 2000 kidnapped), and increasingly bold, reaching into urban areas and targeting prominent politicians. In February 2002, the government broke off negotiations that had been going on for three years with no progress towards a resolution.
During the 1970s, Colombia's economy struggled with an inflationary spiral that rose from a rate of 15.4% in 1972 to 25% during the following decade. Inflation remained close to 20% annually through the 1980s and much of the 1990s. After 1983, however, the economy improved significantly, and growth rates rose above the world and hemispheric averages—an average of 4% between 1988 and 1998. In 1990, President Cesar Gaviria instituted an economic restructuring plan known as apertura (opening). The program emphasized trade expansion through tariff reduction, free trade agreements and privatization of state-owned enterprises, including banks, power plants, airports, seaports, roads and telecommunications networks. After the initial burst, the pace of privatization was slowed.
In 1995, domestic political considerations constricted Colombia's economic liberalization. In 1996 and 1997 the Clinton "decertified" Colombia as a country fully cooperative with US narcotics policy. The move was taken in response to continued narco-guerilla activity in the countryside and to allegations that President Samper had solicited and received campaign contributions from drug cartels. The decertification made it difficult for US companies to further invest in the country, and halted the growth of trade; though the United States remained the biggest foreign investor in the country. The "decertification" was lifted in 1998, but by then the economy was being impacted by intensified guerrilla activity, fiscal shortfalls, and external shocks—the Asian financial crisis in 1997, the Russian financial crisis in 1998, and the Brazilian financial crisis in 1999. In 1998, GDP growth fell to 0.6%. and then in 1999, Columbia experienced its first contraction (-4.2%) since 1983. Growth returned in 2000, but only at the anemic level of 2.7%. Domestic instability and the external economic slowdown combined to reduce growth to 1.4% in 2001 and1.6% in 2002. In December 1999, the government entered into a three-year arrangement with the IMF under its Extended Fund Facility (EFF), and there was a marked decline in the inflation rate across this period: inflation fell from 18.7% in 1998 to 5.7% in 2002. Unemployment in 2002 was estimated at 17.7%, with subemployment at 35%.
In late 2002, the government offered reform legislation in five areas: taxes, pensions, labor, public administration, and banking. In January 2003, the government entered into a $2.5-billion standby arrangement with the IMF to support these reforms.
In 1999, due to economic instability in 1998, Colombia signed its first agreement with the IMF for a $3 billion approved standby line of credit. The government also unveiled plans to renew the privatization many state-owned enterprises to revitalize the economy. Nevertheless, guerilla warfare put off potential investors.