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Sustaining the Medellin Miracle Colombia Struggles to Hold On To Gains From Globalization

Medellin's Fragile Renaissance
Globalization helped tame once violent Medellin, but the city is struggling to stay prosperous in the increasingly competitive world.
(Video By Travis Fox -- washingtonpost.com)

By Anthony Faiola
Washington Post Staff Writer
Friday, July 11, 2008; Page A01

MEDELLIN, Colombia -- This labyrinthine metropolis transformed over the course of a decade from a battlefield of drug lords, paramilitaries and leftist guerrillas into one of the safest, most dynamic cities in Latin America. Visionary inner-city renewal projects and a push to take back the lawless hillside slums by force deserve credit, but many here hail an unsung hero in Medellin's urban miracle -- globalization.

This Story
Sustaining the Medellin Miracle
How Globalization Touched Medellin
Video: A Fragile Renaissance
Exports surged in the 1990s as the United States granted temporary trade preferences to Colombia, allowing many of its products to enter the world's largest market duty-free. They really took off after 2002, when Washington expanded that agreement to include Colombia's all-important textile sector. Humming assembly lines making Ralph Lauren socks and Levi's jeans sprang up across this picturesque Andean valley, creating tens of thousands of jobs and turning Medellin into a model of the curative power of liberalized trade.

Yet the renaissance of a city best known outside Colombia for years as the base of Pablo Escobar and the Medellin cartel is entering a period of uncertainty that illustrates just how fragile such gains can be. The city's export industry has begun to slip backward, officials here say. It happens as Colombia and many developing nations are struggling to maintain their edge in the increasingly competitive world of global trade.

Inside the three sprawling factories of Crystal, a major textile maker here, the workforce doubled to 11,000 between 2001 to 2006 as the company's U.S. sales surged. But following several local apparel makers, it has eliminated hundreds of jobs as contracts have dried up over the past 18 months.

The weakening dollar, which has shed almost 40 percent of its value against the Colombian peso in two years, has made it even harder to compete with cheaper production costs in China, where officials in Beijing are managing the exchange rate, cushioning the dollar's fall to help Chinese exporters. Since 2005, Colombia's textile and apparel exports to the United States dived 30.8 percent while China's soared by 44.3 percent.

Colombia is also up against a resurgent global backlash to free trade -- including in the United States, the country that had spent the past two decades cajoling Latin America to open its markets. An election-year debate has politicians in Washington blaming globalization for the loss of U.S. jobs, holding up a vote in Congress on a free trade agreement with Colombia. That bill would make the current trade preferences permanent while allowing most U.S. products to enter Colombia duty-free.

Colombia remains a vocal proponent of free trade at a time when the loudest voices in the region are against it. In neighboring Venezuela, Colombia's second-largest trading partner, President Hugo Chávez is shifting the country toward socialism, nationalizing industries and barring the doors to free trade. He has signaled Venezuela's intent to pull out of a regional trading bloc that includes Colombia and has sharply reduced quotas on Colombian-made cars. In recent months, that decision has forced Sofasa, a leading automaker in Medellin, to reduce shifts and lay off 600 workers.

Companies say doubts about Colombia's future trading relationship with the United States have been a factor in a recent flow of jobs from Medellin into Central America, where a bloc of nations sealed a free trade agreement with the United States in 2006.

"If my client is wondering if a pair of socks made in Medellin will make it to the U.S. duty-free this time next year, they will just go to Central America," said Luis Fernando Restrepo Echavarría, Crystal's president. "That's exactly what they're doing."

A Flower Revolution

On the eastern outskirts of Medellin, the emerald foothills of the Andes give way to acres of blinding color. Expansive greenhouses filled with blooming purple pompons, yellow chrysanthemums and white lilies carpet the dark earth. This is how Colombia's export revolution began -- with flowers.

In 1991, with Medellin's ghettos convulsing in cocaine wars and leftist guerrillas infiltrating the city, the U.S. government extended a lifeline to Colombia and other Andean countries plagued by drug violence. It granted them renewable "trade preferences," providing local manufacturers the right to sell their wares in the United States without paying tariffs. It gave Colombian flower exporters the competitive edge they needed to dominate the U.S. market. Today, Colombian flowers make up roughly 90 percent of all those sold in the United States.

Here, it created jobs -- jobs that some analysts argue are the kind that U.S. workers should be willing to give up in the era of globalization. These labor intensive and minimum wage jobs in the United States are often filled by undocumented immigrants, but in this region, they provide a lifeline for rural people. Many of the U.S. companies in California and Texas that once grew flowers adapted and evolved into suppliers and distributors of flowers grown here, where a single stem can be planted, irrigated, trimmed, cut and packaged for about $1.

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http://www.washingtonpost.com/wp-dyn/content/story/2008/07/11/ST200807...

Cheers

By huskie on Jul 11, 2008, 11:32 in Friendly Talkzone.

huskie says on Jul 11, 2008, 11:33:

I recommend you read this one, a great article
Cheers

"Great spirits have always encountered violent opposition from mediocre minds-"

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aztec says on Jul 11, 2008, 12:08:

Thank you huskie. Good to read one like this!

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august says on Jul 11, 2008, 12:30:

It´s pretty interesting to read that article in light of the fact that while between January and May 2008 there was a slight decrease in the amount of homicides occurring at the national level when compared to the same period last year, in Medellín there was actually an increase. I don´t want to be pessimistic, but these might not be good signs.

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Catfish35 says on Jul 11, 2008, 15:05:

Good post ! I hope this helps some of the people on here understand that it is just not as simple as the dollar getting trampled and the peso getting stronger that this makes all good for Colombia.
I for one would love to see Colombia prosper and retain that prosperity, however, when your plugged directly into the dollar unfortunately when the dollar short circuits so does MOST everything connected to it.

I believe we need more people like RAAAY in Colombia..that can take all the products to their own country like England...jeje..and start selling flowers instead of laying around all day and night drinking beer and keeping Bayer Aspirin stock healthy..so come on you "ur-a pee'ins" help Colombia out..put down your beer and pick up a nice pretty snapdragon !

"So many guns, and so few brains". sam spade

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truthspeaker says on Jul 11, 2008, 15:52:

Raaay is no longer in Colombia . Put his tail between his legs and went back to England or Wales

Remember, I can only tell the truth. No more Sex Tourism in Colombia.

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truthspeaker says on Jul 11, 2008, 16:08:

"that can take all the products to their own country like England"
I guess you got it the other way around...

Remember, I can only tell the truth. No more Sex Tourism in Colombia.

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tejasmarcos says on Jul 11, 2008, 19:44:

i'm tellin you guys...... raaay is on margarita island with greg whatshisface having the time of his life!

trying to walk a straight line on sour mash and cheap wine...

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Catfish35 says on Jul 12, 2008, 00:03:

No, I am sure Raaay is English, I met him a few times..never met Whatshisface....

"So many guns, and so few brains". sam spade

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truthspeaker says on Jul 12, 2008, 08:34:

Actually Raaay is in a retirement home in England (R.I.P)

Remember, I can only tell the truth. No more Sex Tourism in Colombia.

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