Colombia: Is There a Light at the End of the Tunnel? (B)

Abstract

These two cases (see also the A case, UVA-BP-0411) transport students to the tumultuous shores of Colombia. Students must grapple with the paradox that the Colombian economy was a shining star in Latin America, according to a number of measures, while the country was perched on an unstable political foundation. The A case examines the economic-reform process in a Latin American context. By the mid-1990s, economic reforms had transitioned the Colombian economy from being inwardly focused to being integrated into the global economy, the so-called Apertura Economica. The macroeconomic, microeconomic, and institutional reforms toward this end are examined in detail. The relative economic stability analyzed in the A case gives way to economic hardship in the B case when the unstable political situation surges to the fore. The social strife caused by interest groups that have perpetuated civil war and relied on the drug trade to finance their positions becomes a formidable challenge by the close of the twentieth century. These cases are intended for use in courses covering the political economy and the process of economic reform.

Keywords: structuring, political risk analysis

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