Editing Economy of Colombia (section)

=== 20th century ===
Colombia's consistently sound economic policies and aggressive promotion of free [[Colombia trade agreements|trade agreements]] in recent years have bolstered its ability to weather external shocks. Real GDP has grown more than 4% per year for the past three years, continuing almost a decade of strong economic performance.<ref name="CIAWFCO" />

In 1990, the administration of President [[César Gaviria Trujillo]] (1990–94) initiated [[economic liberalism]] policies or "apertura economica" and this has continued since then, with tariff reductions, financial deregulation, privatization of state-owned enterprises, and adoption of a more liberal foreign exchange rate. Almost all sectors became open to foreign investment although agricultural products remained protected.

The original idea of his then [[Minister of Finance]], Rudolf Homes, was that the country should import agricultural products in which it was not competitive, like [[maize]], [[wheat]], [[cotton]] and [[soybeans]] and export the ones in which it had an advantage, like [[fruits]] and [[flowers]]. In ten years, the sector lost 7,000&nbsp;km<sup>2</sup> to imports, with a critical impact on employment in rural areas.<ref>[http://www.usip.org/library/pa/colombia/adddoc/plan_colombia_101999.html#approach Plan Colombia: Colombia: Peace Agreements: Library and Links: U.S. Institute of Peace] {{webarchive|url=https://web.archive.org/web/20041124093520/http://www.usip.org/library/pa/colombia/adddoc/plan_colombia_101999.html |date=24 November 2004 }}</ref> Still, this policy makes food cheaper for the average Colombian than it would be if agricultural trade were more restricted.

Until 1997, Colombia had enjoyed a fairly stable economy. The first five years of liberalization were characterized by high economic growth rates of between 4% and 5%. The [[Ernesto Samper]] administration (1994–98) emphasized social welfare policies which targeted Colombia's lower income population. These reforms led to higher government spending which increased the fiscal deficit and public sector debt, the financing of which required higher interest rates. An over-valued peso inherited from the previous administration was maintained.

The economy slowed, and by 1998 GDP growth was only 0.6%. In 1999, the country fell into its first recession since the [[Great Depression]]. The economy shrank by 4.5% with unemployment at over 20%. While unemployment remained at 20% in 2000, GDP growth recovered to 3.1%. Unemployment in 2020 has improved compared to two decades ago to 12.20%.

The administration of President [[Andrés Pastrana Arango]], when it took office on 7 August 1998, faced an economy in crisis, with the difficult internal security situation and global economic turbulence additionally inhibiting confidence. As evidence of a serious recession became clear in 1999, the government took a number of steps. It engaged in a series of controlled devaluations of the peso, followed by a decision to let it float. Colombia also entered into an agreement with the [[International Monetary Fund]] which provided a $2.7 billion guarantee (extended funds facility), while committing the government to budget discipline and structural reforms.