As millions of Venezuelans flee the economic hardships of their country, one place they are finding refuge is Colombia.
The Colombian government is providing Venezuelan migrants access to basic services and healthcare, housing, education and public utilities.
The Colombian government estimates it will cost the country half a percentage point of annual gross domestic product to provide these services. Colombia’s GDP in 2018 was $312 billion, according to Reuters.
So, can Colombia weather the storm of all these migrants? The answer to that may take time.
Colombia is the 55th largest export economy in the world and the 53rd most complex economy according to the Economic Complexity Index (ECI). In 2017, Colombia exported $39.1 billion and imported $44.3 billion, resulting in a negative trade balance of $5.18 billion.
It’s top exports are crude petroleum ($11 billion); coal ($7.63 billion); coffee ($2 billion); refined petroleum ($2 billion); and gold ($1.45). The country’s top imports are refined petroleum ($2.8 billion); broadcasting equipment ($2 billion); cars ($1.8 billion); packaged medicines ($1.2 billion) and planes, helicopters, and spacecraft ($932 million).
The top trading partner for Colombia, which is the fifth largest export market in the Western Hemisphere, is the United States. Trade with the U.S. accounts for 34% of Colombia’s total trade and Colombia is a top ten supplier of crude oil to the U.S. Colombia is the U.S.’ third largest export market in Latin America behind Mexico and Brazil.
The U.S.-Colombia Trade Promotion Agreement (USCTPA) aims to improve investment, eliminate tariffs and other barriers to U.S. exports. It also expands trade and promotes economic growth for both countries. The International Trade Commission (ITC) estimates that the tariff reductions in the agreement will expand exports of U.S. goods alone by more than $1.1 billion.
The USCTPA provides significant new access to Colombia’s $166 billion services market, supporting increased opportunities for U.S. service providers. Colombia is a fast-growing market of 45 million consumers, and the agreement will help strengthen the Colombian economy and promote its growing middle class, according to the U.S. Trade Representative.