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close this bookThe Mega-city in Latin America (UNU, 1996, 282 pages)
close this folder11. Santa Fé de Bogotá: A Latin American special case?
View the document(introductory text...)
View the documentIntroduction
View the documentPopulation and demographic structure
View the documentBogotá's national role
View the documentThe economy
View the documentEmployment
View the documentPoverty and social indicators
View the documentThe shape of the city
View the documentHousing
View the documentPublic services
View the documentThe city's principal problems
View the documentAdministration of the city
View the documentThe future
View the documentNotes
View the documentReferences

The economy

Manufacturing generates around one-quarter of Bogotá's gross urban product (table 11.4). The city has fewer manufacturing workers per capita than Medellín but a better balanced industrial sector. Its strength lies in the printing, metals, transport, chemicals, and plastics sectors (ANDI, 1994). Most production is for the domestic market; manufacturing in Bogotá has never generated much in the way of industrial exports.

Government is a vital component in the Bogotá economy, contributing 15 per cent of the gross domestic product in 1989. Some 34,000 government employees worked in the city in 1987, almost one-third of the national total (Lopez, 1990: 37). Financial services constitute the city's third most important generator of value added and, along with construction, constituted one of the most dynamic elements in Bogotá's growth during the 1980s.

Bogotá's economic future is uncertain but hardly problematic. The city's economy was built, of course, during a period when the trade regime was highly protective. Since 1986, the government has been gradually opening up the national economy, a process that was accelerated in 1990 (DNP, 1991). The question is whether Bogotá can cope with freer trade and with newly competitive labour and financial markets. As the head of the Chamber of Commerce recently put it: "Bogotá, the capital of protectionism, now has to overcome various difficulties if it wants to become the capital of the opening" (Fernández de Soto, 1994: 44).

The major worry for Bogotá is that it currently generates very little in the way of exports. In 1991, the city produced only US$188 of exports per capita.5 To judge from the sales of the city's 100 largest exporters in 1992, Bogotá's major exports are flowers (41 per cent), emeralds (29 per cent), agricultural products (12 per cent), leather goods (7 per cent), and clothing (5 per cent) (Pineda et al., 1993). Bogotá clearly has problems in exporting manufactures because of its location. The only foreign market that can be reached easily by road is that of Venezuela. Between 1990 and 1994, trade liberalization trebled Colombia's trade with its neighbour but further expansion will be hindered by the current plight of the Venezuelan economy. Since most of Bogotá's exports go by air, its international competitiveness is not helped by the limited size of its airport; El Dorado desperately needs a second runway.

Of course, optimism about Bogotá's economic future is greatly helped by the healthy state of the Colombian economy. During the early 1990s, apertura led to the repatriation of large sums of Colombian capital, and the discovery of new mineral resources is attracting large amounts of foreign investment. Bogotá's strengths in producer services, higher education, research, and commerce mean that it is bound to benefit from any growth in the national economy. Reforms are needed if the city is to maintain its current pace of economic growth, but it hardly faces an insurmountable challenge.