A SEA BREEZE

Colombia 2020 | ECONOMY | FOCUS

The Caribbean region, and specifically the Atlántico department, is gearing up to drive the country's economic fortune forward.

Colombia's 32 departments are divided into six different geographic regions that reflect that natural resources found abundantly in those regions. The Andes region, for example, encompasses those regions that lie within the Andes mountain range. As such, the Caribbean region, also known as el Caribe in Spanish, is the coastal area bordering the Caribbean Sea. This includes some or all of the departments of Guajira, Bolívar, Cesar, Magdalena, Sucre, Córdoba, Santander, Antioquia, and, finally, Atlántico, the department that has led business and economic growth in the country.

The Caribbean region has been earmarked USD172.4 billion in the National Development Plan for the next four years. The region added 15.2% to the country's GDP in 2018. The total GDP of the region was USD148.93 billion, with the biggest contributors being Atlántico, Bolívar, and Magdalena, with each bringing USD43.25 billion, USD35.13 billion, and USD13.07 billion, respectively. The strongest sectors are its ports, agriculture, and tourism, with the latter recording 4.7% growth in Atlántico department in May 2019, according to Colombia's Association of Hoteliers and Tourism (COTELCO).
The department's geographic location on the Caribbean Sea has facilitated its growth economically and helped contribute to the country's strong future. Caribbean ports move more than 90% of the country's exports and bring in almost 70% of its imports. This movement of goods may have also led to a more liberal environment, economically speaking. According to Professor Alejandro Useche, quoted by El Heraldo, Atlántico department, and specifically Barranquilla, is one of the country's most liberal areas, increasing its potential to be a driving economic force for the rest of the country. Furthermore, compared to the rest of the country, Atlántico has also showed growth in terms of industry, especially in comparison to the regions of Bolívar and Córdoba, where it has shrunk. In fact, the manufacturing sector in the department experienced growth of 4.6% in 2019 YoY. This is much higher growth than the national average, which was 2.6%. Specifically, growth was seen particularly in the plastics, chemical production, and pharmaceuticals sector, in the areas of real production (5.6% growth from January-September 2019), real sales (10.3% growth), and employment (0.7%). Growth in industries might have had an effect on the transport sector, which also grew notably in the same period.
Another interesting trend in the region is the growth in the construction sector, particularly in housing and buildings. Barranquilla and Cartegena experienced 24.7% and 26.6% growth, respectively, in real sales of housing over the first 10 months of 2019. This building trend may impact another sector the government is hoping to grow in the area: tourism. The government is especially betting on attracting tourists to the department's natural attractions.
Another government bet—diversifying the country's renewable energy portfolio—will also feature the Caribbean region. To date, Colombia has relied on hydroelectricity and onshore oilfields, with 70% of its needs supplied by hydro energy. Though positive, environmentally speaking, this is not always the most reliable way to get energy in Colombia due to El Niño. Subsequently, President Iván Duque is looking to shift the country's energy portfolio to more non-conventional renewables and offshore hydrocarbons, both of which can be supplied by the Caribbean region on land and sea. Some 76 of the state-approved private-sector energy projects are found in and around the Caribbean cost. These are estimated to add 5,000MW in the coming years. Further increasing investor confidence is Glenfarne Group's purchase of a natural gas plant in Barranquilla for USD420 million. However, Barranquilla has more to look forward to other than US gas companies. The Inter-American Development Bank has chosen Barranquilla as the headquarters for the assembly for 2020, putting it on the map for economic development. “Barranquilla is one of the most dynamic and competitive cities in Colombia. It has improved its infrastructure, environmental quality, and tourist attractions. Magical realism awaits us," Luis Alberto Moreno, IDB president, said in 2019 at the press conference formalizing the decision.