Colombia: A new member in richman’s club

Updated: Apr 29, 2020 8:22 PM

Colombia, the Land of Gabo, with a population of around 50 million, more than one third the size of India is a hugely diverse country – geographically, culturally and its people. The Land of Magical Realism! It creates its own magic despite challenges.

Colombia’s cultural scene is one of the richest and most vibrant on the continent. (Reuters)

By Ravi Bangar

Colombia, the third-largest country in terms of population in South America, one third the size of India, has been officially admitted as the new member of the Organisation of Economic Cooperation and Development (OECD) based in Paris. The OECD was founded in 1960 just before the onset of the Cold War with stated objectives of improving global economy, increasing investment, trade and “promoting socio-economic well-being”. Colombia became the 37th member and third from Latin America after Mexico and Chile to join the “Richman’s” club.

Colombia, the Land of Gabo, with a population of around 50 million, more than one third the size of India is a hugely diverse country – geographically, culturally and its people. The Land of Magical Realism! It creates its own magic despite challenges.

Colombia is endowed with rich natural resources (oil, coal, minerals, precious stones- well known for Emeralds from the mines in Muzo, Coscuez, and Chivor, gold reserves, vast tracts of cultivable land growing coffee, maize, rice, sugarcane, banana, flowers etc.

Juan Valdez, a fictional character, and the famous brand has made Colombian coffee, known for its mild, well-balanced quality beans, much sought after in the world.

Colombia’s cultural scene is one of the richest and most vibrant on the continent. Its soft power is best represented by singer musicians like Shakira, Juanes, Carlos Vives, Balvin, Maía, Fonseca, Maluma etc; Botero’s, “Plus size” sculptures and writings of Juan Gabriel Vasquez, Laura Restrepo.

On the downside, Colombia is also one of the most noted for its coca cultivation, drugs trafficking, organized crime, poverty and inequality. The latest figures for Colombia of Ginni Index are 50.4 an increase from 2017; placing it alongside Guinea Bissau in Africa. Still, it ranks 44 among 156 World’s happiest countries!

In Colombia, two-thirds of agricultural land is concentrated in just 0.4 per cent of farmland holdings. It is estimated that 84 per cent of the smallest farms control less than 4 per cent of productive land in Colombia. Land far from being an asset is the major contributor to the country’s inequality and lawlessness.

This inequality is the root cause of several internal conflicts which have plagued and continue to pose challenges to national security and governance.

The FARC (Revolutionary Armed Forces of Colombia) fought the government for over 52 years till peace accord of 2016. The conflict claimed lives of over 220,000 Colombians. It controlled over a third of territory where the government presence was largely known by its absence. The deal polarized and has created a schism in the Colombian society which will take years to bridge. The scars of the conflict can still be seen in the countryside among the affected population and damages to infrastructure.

Following the Peace accord, FARC transformed into a political party with similar acronym but failed to secure a single seat in the Congressional elections in 2018.

The peace deal while secured some peace, the government’s hope to tackle unequal land ownership and bridge the urban-rural divide as part of the new peace accord, however, has largely remained on paper. The differences in implementing it have led to fissures and accusations of lack of sincerity on part of the government.

The ELN (National Liberation Army), another rebel group, much smaller in numbers than FARC, has been active in country’s areas bordering Venezuela. The Venezuelan migration crisis has provided cross border movement, fertile ground for carrying out of attacks by ELN and rebel FARC members in Colombia. ELN launched a deadly attack on a police academy in January 2019in Bogota. It has recently declared a month-long ceasefire. Even the rebel groups play “responsible role” and for a change collaborate with the government!

While the country has made significant progress on reducing insecurity in major urban sectors, the rural areas are a different story due to land related conflicts, mafia operations, unabated killings of social and community leaders, and coca cultivation.

In 2018, it was estimated that over 171,000 hectares of land was under coca cultivation. The local value of it estimated to be US $ 3billion. The markets for it are in the US and Europe and sadly Colombians pay the high price.

The prosperity of capital’s northern district contrasts sharply with the poorer districts living on hillsides of Bogota. The inequality in provinces becomes quite evident. One of the best managed and wealthier Department (province) is Antioquia with capital Medellin. It is generally remarked that Antioquia and its people are a class apart in the country in work culture, ethics and business acumen. On the other extreme of the spectrum is Choco on the northern Pacific coast province where poor governance, socio economic backwardness, lack of basic infrastructure, organized welcome a visitor.

Colombia, despite social conflictssimmering subliminally,sub-optimal administrative effectiveness, corruption, impunity; the economy was reasonably doing better than its counterparts in LAC. The economy was on a much better growth curve. GDP growth increased from 2.8% in the second quarter of 2018 — prior to Duque’s inauguration in August 2018— to 3.3% in the third quarter of 2019.

However, unemployment has been on the rise, reaching 9.8% in October 2019, in contrast to 8.6% two years ago. This is in part explained by a sharp contraction in housing construction, falling exports have also negatively impacted manufacturing, mining and agriculture, are also under-performing.

The perennial challenges of infrastructure were being addressed including building “Fifth generation”highways one of which got stalled due to ODEBRECHT corruption scandal. The government placed emphasis on ICT to leverage its talented youth power, for this, in 2019, it established Mision de Los Sabios, the International “Mission of Wise Men”( it included women too)with the aim of contributing to the formulation and implementation of public policy in education, science, technology and innovation.

Then came the protests in October last year which added to woes of the country and brought forth the divisions, inequality, demands for pie in the cake and better governance to expeditiously address social and economic conditions. It may be recalled that many noted leaders of the country used to famously say, “The country is in bad shape, but the economy is doing well.” That blasé feeling was over with this rude shock- protests.

OECD is an institution which has long lost its relevance due to fast-paced global changes since the end of the Cold War, has been struggling to find its raison d’etre. It has been attempting to rope in developing countries like China, India, Brazil and South Africa in its embrace in the hope that these emerging economies add to its profile and contribute much-needed resources. In 2011 OECD organized the Fourth High-Level Forum on Aid Effectiveness was held in Busan, South Korea from 29 November 2011 to 1 December 2011. The writer led the Indian delegation. It was obvious that the depleted budgets of the developed north were sought to be augmented with mainstreaming South-South cooperation funds!

The global landscape after Global Financial Crisis of 2008, financial crisis affecting the West especially the PIGS (Portugal, Italy, Greece and Spain), shifting of economic polarity to Asia,is very different. The tremors of COVID 19 pandemic are still being felt internationally and have affected Europe the most after the US. The COVID 19 is not just a health pandemic but is widely believed will impact global institutions and power balance. Perhaps leave Europe and the US much weaker.

It was in 2013 that Colombia was invited to start negotiations to join OECD. The negotiations took 5 years an accession agreement was signed by former president Santos at the fag end of his term in May 2018.

In my view, incorporating Colombia, OECD is doing themselves a great favour in these uncertain times.

The question one should ask is what will Colombia get in return? It will be another “Star” in Latin America along with Mexico and Chile. Its hopes of expanding exports to OECD members, at this stage, are bit unclear. Any euphoria in this regard is premature at the best.

Colombia’s top 10% earners received 39% of the country’s income in 2017, according to the World Bank. Will getting in OECD assist in addressing socio-economic ills afflicting Colombia? Well, poverty, inequality and vested interests of the country are deeply entrenched and cannot be resolved, wished away nor hidden under tarpaulin covers of OECD.

The national inequality will get further entrenched as the country will have to allocate limited resources in ensuring rules compliances of OECD and this could possibly create imbalances and neglect tackling core problems of the country- poverty, insecurity, killings of social leaders, regional imbalances.

Historically, the vanity of the elite, howsoever minuscule, ruling class of Colombia has been responsible for its ills and unfulfilled promises. Sitting in the north district in Bogota the world looks very different than surviving in Choco.

But then, the taste of soupe à l’oignon for few rich in Colombia sitting in the 16 Arrondissement in Paris, the richest neighbourhood is purely aspirational and massages the ego no end than breaking bread and having Sancochowith poor in Soacha!

(The author is Former Ambassador to Colombia and Ecuador, High Commissioner to Cyprus, Deputy Permanent Representative to the WTO and Deputy High Commissioner to Singapore. The views expressed are personal.)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Vande Bharat Mission: Flights and Naval ships bring back stranded Indians back home, phase IV begins
2China rejects prospect of joining arms control talks with US
3Defence Minister Rajnath holds telephonic conversation with South Korean counterpart Jeong Kyeong-Doo