Effects CRISIS IN COLOMBIA

The global financial crisis that began on Wall Street and in suspense to entrepreneurs, political
leaders and citizens from all over the world seems to show every day the ugliest side of his face.
Despite the measures taken by the United States and different countries of the European Union,
the stock exchanges of the world still falling down an abyss of uncertainty and with them the
money of millions of people. It is estimated that up to today's global markets have registered
losses by nearly 4 trillion dollars.

This paper aims to analyze the global financial crisis, and their possible effects of financial
order in Colombia, in the framework of Economic Theory, under the analysis of macroeconomic
concepts such as interest rate and exchange rate. The economic situation of Colombia revolves
around certain situations that generate an environment of uncertainty, in which it is of vital
importance to effective government intervention.

The shuttle on the rate of exchange, is one of the main factors that affect the economy of the
country... This behavior of the exchange rate affects more than all the export sector, and despite
the fact that the Colombian government has taken various measures to curb this situation, still
look forward to the results emerge. However, the other side of the coin is that imports have
recently registered a growth, which is perceived as a clear indicator of the reactivation of the
Colombian economy and the development of the appreciation of our currency

The foreign currency entering the country associated with exports of oil, can generate
increases in inflation, resulting in a failure on other sectors such as agriculture, which is one of
the most competitive sectors in Colombia. This situation could lead to the Colombian economy
fall into the phenomenon known as Dutch disease,

The consequences of the crisis have mainly been the rising rates of unemployment, the
increase of informal employment, the decline in exports, the increase in poverty, among other
factors that generate ups and downs in the economy, however , this is due to the lack of planning
for a fiscal and monetary policy and better developed.
 The international crisis, forced to Colombia to seek open relations with the markets of the
Pacific coast of Latin America, Central America and the Caribbean Basin; looking for
preferential manner toward these areas exports and investment. However, the exporter has been
the most affected with the current situation on the rate of exchange, resulting in the reduction of
the generation of formal employment.

In addition, thanks to the export boom that has been presented in the mining sector, and due to
its disproportionate growth, a fall in non-traditional exports, affecting the sectors producing
greater relevance and with greater opportunities in the country. The sectors most affected by the
revaluation are the agribusiness, manufacturing, textiles and services. It is evident that these are
very important sectors in the country, which by tradition are of great export path.

At the international level, Colombia has lost competitiveness in the markets; one of the factors
was the revaluation of the dollar mentioned earlier, which in addition to the increases of
informality in the economic sectors are on the edge of a precipice production in the sectors more
despondent and forgotten of the national geography.

The deficit in the current account is one of the main structural weaknesses of the Colombian
economy, especially if one takes into account that the external accounts of Latin American
countries have benefited. It is said that the deficit in the current account of the country is given in
terms of the perception of risk.

The current account deficit is mainly due to a significant deterioration in the trade balance,
particularly to the dynamism of exports and imports. The increase in imports responds to the
high demand for imports of raw materials and capital goods for the manufacturing industry.
However , it is considered that the evolution of public finances if explains the fact that Colombia
has not recovered the degree of investment that reached to have in previous years.

What employers are demanding that the government, is that it should adopt measures aimed at
encouraging the production and export of goods that have been affected. Faced with this
situation, both the Bank of the Republic and the Ministry of Finance, have intervened in the
matter in recent months.