Colombia is one of the most promising markets for environmental technologies and services in Latin America. It has a strong historical commitment to environmental protection, yet for reasons discussed in this report, it is only now beginning to implement cleanup and protection policies in certain sectors. The total 1998 market for environmental products, technologies, and services is between $250 million and $300 million, of which U.S. firms could have captured about 10 to 15 percent.
Colombia has maintained a strong and stable economy for more than 50 years, to the envy of many other Latin American countries. The United States is Colombia's largest trading partner, and American goods and services are highly respected. Nevertheless, U.S. firms have lagged behind in realizing the environmental potential in Colombia, while European and Canadian firms have been more successful.
The race is hardly over. Water and wastewater treatment are the most highly developed segments, yet more than 9 million Colombians lack water services entirely, and many more are served by inadequate or unreliable systems. All the major urban areas have sewerage systems, but they are often inadequate. In fact, despite 20 years of “command and control” regulatory efforts, more than 95 percent of Colombia's municipal wastewater is discharged into surface waters without treatment. More often than not, industrial effluent is also discharged directly into waterways.
Solid-waste disposal, hazardous-waste handling and disposal, and air pollution are largely untapped markets. The country is facing a landfill crisis and has already experienced uncontrollable landfill slides. The composition of Colombia's hazardous-waste stream is only now being analyzed, and handling and disposal practices are basically unknown. A hefty market in both remediation and process control is expected to develop as the nation comes to terms with the hazardous-waste issue.
Despite serious local air-quality problems (especially in such cities as Bogotá, Medellín, Sogamoso, Cartagena, Barrancabermeja, Cali, and Barranquilla), Colombia's market for air pollution control equipment for stationary sources is small. Among the factors that have caused the size of this sector to fall dramatically over the past few years are lax and ambiguous laws, inadequate enforcement, intense lobbying by the industries most responsible for air pollution, and unusual climactic conditions.
Various types of environmental studies are in high demand at present, and U.S. firms - working in cooperation with a Colombian partner - are in a good position to pursue this market.
Colombia's Ministry of Environment, the National Congress, and regional environmental authorities are working hard to bring Colombia's environmental legislation up to date. Colombia has sought technical guidance from a number of sources, including the U.S. Environmental Protection Agency. Colombia is implementing a forward-looking pollution fee program to deal with industrial effluents and is considering a number of models for air pollution and waste handling.
Overall, Colombia offers an attractive venue for foreign investment. The economy is quite open and (with a few exceptions) foreign and domestic firms are treated equally. Although the country is currently undergoing a serious economic crisis, foreign investment has not fallen off, and most observers predict that the newly elected government will deal quickly and decisively with the crisis.
Unfortunately, no discussion of Colombia is complete without acknowledging the very serious problems of crime (both economic and social) and narcotrafficking. The U.S. Government provides a great deal of information about these matters and determines yearly whether Colombia is progressing in the war against drugs. Firms should bear in mind that only a tiny fraction of Colombia's population is involved in narcotrafficking and crime and that most visitors come away with a very positive impression. Many U.S. firms have established profitable, long-term associations with Colombia, its people, and its businesses.
