The Colombian paradox
There is no logical paradox here, just a series of facts that I, upon reflection, find shocking.
Read this opening sentence from yesterday’s New York Times:
This strategically situated Andean country, with Latin America’s fifth-largest economy, had for years posted solid economic growth while controlling its foreign debt.
But not all is well in this economic paradise:
…heavy government spending in recent years, some of it for a military buildup encouraged by American officials, has led to serious economic problems that are worrying Wall Street and Colombia’s president, Ãlvaro Uribe. The economic difficulties, particularly a burdensome public debt, threaten one of Latin America’s few economic bright spots.
I don’t mean this as Times-bashing (a popular sport in the blogosphere), the description offered in this article in consistent with other sources I have read. Oddly, Colombia has flourished economically in spite of some minor difficulties in its recent past and present, namely the following:
1. “A 40-year insurgent campaign to overthrow the Colombian Government escalated during the 1990s.” From a CIA Factbook.
2. “…large swaths of the countryside are under guerrilla influence”, same source and link.
3. Colombia is the kidnapping capital of the world. I wrote the following in late October:
About 90 percent of all kidnappings take place in the ten riskiest countries…with Colombia a clear leader, reporting 10 kidnappings a day, more than half of the total. The police in Colombia admit that 1500 kidnapped hostages are held currently, the true number is likely much higher. Kidnapping is estimated to be a $200 million tax-free business in Colombia.
4. The Lonely Planet Guide, an adventurous source, hardly a bible for the Club Med set, describes the country as “off limits to all but the most foolhardy travelers.”
Get the picture? Yes, I am puzzled at how resilient the Colombian economy has been. And the reported statistics presumably do not include the illegal drug trade, and thus they underestimate how well the country has been doing.