Rebooting the Colombian Economy
Despite the problems that face the Colombian economy, there is still plenty of time for the country to confront and overcome them. In this final article, I attempt to articulate solutions that can be implemented immediately to revive the economy and create a new middle class that will power a recovery for decades to come.
Create More Liquidity for the Middle and Lower Class
Colombia, like most of Latin America, is a nation where there is great inequity between the wealthy class and the lower class, and without viable means for lower class citizens to escape from poverty. According to the United States Development Agency (USAID), only 0.4% of the population owns 62% of the country’s land. That alone is a recipe for disaster.
These same issues plagued Colombia’s neighbor, Venezuela. Socialists tried to solve the problem by seizing and redistributing land. The result was an economic disaster, one in which investment in the country ceased and new, uneducated landowners had no incentive to properly manage the land. As a result, the production of most agriculture consumables, not to mention petroleum and industrial products, has fallen sharply over the past decade. The following chart, courtesy of FAO, shows the decline of banana production in Venezuela.