Volume 44, Number 174,
July-September 2013
Colombia: Commercial Integration
and Trade Imbalances in the Pacific Basin
Jaime Torres
DETERIORATING PRODUCTIVITY IN LATIN AMERICA VS. THE EXPORT MINING SECTOR ( ...continuation )

The coordinator of the idb study (Pagés, 2010: 54-62) describes current productivity levels in Latin America:

As is the case for total factor productivity, labor productivity has been disappointing in Latin America. Following a relatively high period of growth from 1950 to 1975, inclusive, labor productivity fell significantly in the lost decade of the 1980s and was further reduced in a period when labor productivity in the most developed and high-income countries, as well as East Asia, grew at an annual average of 2.7% to 4.6%, respectively [...]. Labor productivity in the industrial sector, which in 1973 was approximately 60% of that of the United States, fell to 40% in 2004. In the same year, productivity levels for the services sector were equivalent to 15% of those in the United States [...]. In some countries (Bolivia, Brazil, Colombia and Mexico), this figure is extremely low: less than 10% of the level of the productive border.

Regarding Colombia’s export industries, Torres and Gilles, 2012, proposed the following:

The behavior of total Colombian exports (over the past two decades) has shown a rather strong bond with primary products and manufactures based on natural resources and little technology. There has been a slow diversification process, partially supported by products with medium and high levels of technology. The share of these products within total exports is low. In this sense, the Colombian export supply differs from global export dynamics, which center on manufactures and high and medium technology.


Figure 15. Growth in Labor Productivity, 1990-2011.
Colombia, Latin America and oecd (1990=100)


Source: Prepared by the author.

On the contrary, dynamics for mining exports, which are one of Colombia’s major exports, are marked by high productivity, resulting from the use of applied technologies by large multinational companies, with the following features: 1) mature technologies with high per capita yield, 2) widespread usage of imported specialized machinery for open pit mining (carbon, nickel, gold), 3) high investment for the employment generated with low job creation, 4) export of 100% of production with low levels of processing, industrial linkage and technology assimilation and 5) high incremental production capacity through capital contributions that allow for the rapid expansion of infrastructure and servicing new export contracts.

However, the contribution of these activities is fundamentally restricted to raising revenue for central and regional governments (royalties and income tax), which is unequally allocated for social investment, military security and highway infrastructure to facilitate mining development in exploitation areas. A researcher (Bonilla, 2011: 61-62) of the National University of Colombia has analyzed this effect in the following way:

The weight of the mining and hydrocarbon sector in the overall Colombian labor market is low, corresponding to only 1.5% of people that work in Colombia. The sector contribution over the nine years of implementing the “investment confidence” policy15 was only 15,000 new jobs (direct) despite the existence of 3.5 million people seeking work in other (informal) activities, and 2.5 million unemployed persons that are still looking for work. This gap is significant and clear in the varied sector participation (mining sector) in gdp (6.4%), the labor market (1.5%), domestic investment (51%) and exports (48%). Specialization in mining and hydrocarbons for export generates investment and surplus, but does not create jobs or synergies for other sectors to generate jobs.

15 The “investment confidence” policy refers to a strategy to government efforts led by President Álvaro Uribe Vélez (2002-2010) to attract international capital to the mining and energy sectors of Colombia.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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