On the Decline of Industry in Colombia. *

Industrial Decline

In the latest report on GDP according to the official source corresponding to the second quarter of this year, industry decreased -1.6% and in the semester it accumulated a fall of -3.6%. Within the composition of the GDP, industry weighs 11% compared to other participations such as commerce 17%, public administration 16%, agriculture 6%, mining 4%, construction 4% and real estate activities 9%.

But in addition, industry has lost participation since in 2.005 it participated with 15% of the GDP, later in 2.010 it was 14%, in 2.015 12%, in 2.022 also 12% until reaching 11% in 2.024.

In turn, within the industry, food products went from representing 4% of the GDP to 3% between the years 2.005 and 2.024, textile products from 2% to 1% and oil refining from 5% to 4%.

From the above, the observation is that although the industry occupies the third position within the composition of the GDP after commerce and public administration, the industry, unlike these sectors, has lost participation since 2.005. There are almost 20 years since that date of a process of industrial lag compared to other sectors. Commerce and public administration, contrary to industry, show advances in the second quarter of this year of 0.2% and 4.8% respectively.

*On the Measurement of Income Inequality and Land Ownership.

In measuring income inequality, the Gini coefficient presented by official sources for Colombia in the last year 2.023 was 0.54, slightly lower than that of 2.022, which was 0.55. The result, although it shows a slight improvement, is higher than that of several Latin American countries and those of North America and Europe because the inequality in income distribution is greater. Only Colombia is surpassed by Bolivia, Venezuela, the countries of Central America, Haiti, some in Asia and Africa.

On the other hand, in a recent study on land distribution in Colombia prepared by the official entity in charge of its preparation, the results for the year 2.023 are shown, among which some are highlighted in this economic note.

Rural properties have been classified into microfundium, minifundium, small properties, medium properties and latifundia and correspond to sizes that are: microfundium 3 hectares, minifundium 3 to 10 hectares, small properties 10-20 hectares, medium properties 20-200 hectares and latifundia more than 200 hectares.

The results show that microfundia are 65.8% of the total properties and only occupy 1.8 hectares of a total of 49.3. In contrast, latifundia are barely 0.8% of the total properties but in hectares they are 44% of the total.

Other results also show that 1% of the owners, that is, 35.304 people, own 49.8% of the rural area that corresponds to 24.8 million hectares of a total of 49.3 million that exist in the country. In this case, the inequality in the distribution of land measured by the Gini coefficient is 0.89. This measure shows that if it is close to 0, the distribution is equal, and if it is close to 1, the distribution is more unequal and reflects a high degree of concentration of property.

The previous exercise applied to rural areas but in the specific case of the agricultural frontier shows that 1%, that is, 27.221 owners own 46.9% of the agricultural area, which corresponds to 18 million hectares of the 38.4 million hectares of the total. The measure of the concentration of property presents a result of 0.87 in the Gini coefficient.

Another exercise carried out for the rural area on the agricultural frontier but also for livestock purposes shows that 1% of the owners, that is, 25.293 people own 46.1% of the total area, which corresponds to 17.1 million hectares of the 37 million hectares of the total. The concentration of land has a Gini coefficient of 0.87.

In turn, the results at the level of each department regarding the rural area of ​​the country show the following. Of 32 departments, 13 of them have a Gini between 0.6 and 0.8 and 19 departments a Gini between 0.8 and 1.

Also, given that the national total of the Gini is 0.89 as mentioned before, the departments that exceed this value are Nariño 0.91, Valle 0.92, Meta 0.92, Chocó 0.94 and Guainía 0.95. The lowest are Caquetá 0.62, Guaviare 0.62, Vichada 0.63 and for its part Cundinamarca registers 0.82, Antioquia 0.87 and Atlántico 0.82.

At a global level, according to international organizations, Latin America has a Gini coefficient of 0.79 in the distribution of land, compared to 0.57 in Europe and the United States, 0.56 in Africa, or 0.55 in Asia.

From all the above, some observations are the following. The distribution of income measured by the Gini coefficient presents lower results in inequality than the distribution of land, so the concentration of land ownership is greater than that of income, but in Latin America (and particularly in Colombia) the concentration of land ownership is greater than in other world regions.