Colombia still ranks as the largest U.S. market in central and South America.

Colombia is holding onto its place as the second largest U.S. agricultural export market in Latin America, after Mexico. U.S. agricultural, fish and forest exports to Colombia totaled $424 million in 2000--virtually unchanged from the year before, despite continued repercussions from the severe

The Big Picture

Colombia faces many challenges to its prosperity. Total industrial output fell nearly 15 percent in 1999. Unemployment reached a record-high 20 percent in 2000, exacerbating unequal income distribution.

Colombia also confronts difficulties for two of its leading exports, oil and coffee. The country must find new petroleum reserves to offset declining production.

International coffee prices have dropped precipitously in the past several years, and the market is likely to remain soft for the foreseeable future. Meanwhile, Colombia's production has declined, curtailing its competitiveness.

Public security concerns persist, constraining foreign investment. The government's peace negotiations with insurgents will therefore continue to play a pivotal role in Colombia's economic performance.

Signs of Strength on the Bottom Line

Yet there are clear signs that Colombia is on the road to recovery. The country's gross domestic product (GDP) totaled $250 billion in 2000, up 2.8 percent from the year before. The inflation rate averaged 8.7 percent, and the Colombian peso remained fairly stable.

Colombia's industrial output grew 9.7 percent in 2000, good news after the sharp decline of the previous year. Total imports jumped 7.6 percent by the end of 2000. Through August 2001, U.S. agricultural exports to Colombia climbed 4 percent, despite a drop in the value of bulk commodities due to price declines. U.S. consumer-oriented product sales rose 7.5 percent for the same period.

So overall, Colombia seems poised for muted growth in the next several years. The government is working to keep the recovery on track by maintaining low interest rates and putting the public sector into better fiscal shape.

Food Processing-a Pillar of the Economy