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Cities in Colombia Could Be an Engine of Growth, Reduce Poverty

December 6, 2012

World Bank

  • 75% of Colombians live in cities, and urban activities have contributed to more than 50% of the GDP growth rate in the last 40 years.
  • However, cities in Colombia are poorly connected to markets, in large part because of high transportation costs and challenging economic geography.
  • Improved connectivity and availability of transportation modes, as well as more coordination within different regions and innovation in the financing of cities, could increase economic efficiency.

The streets of Bogotá are filled with honking cars, street vendors praising their merchandise and taxis looking out for clients.

People hurry by tall buildings in the center; some streets give you a glimpse of the near mountains that surround the Colombian capital, and of the clusters of houses hanging on the green mountain slope.

Most of Colombia’s main cities are -like Bogotá- located in mountainous terrain, far away from the coasts. This, combined with limited infrastructure and inefficient management of logistics, makes transporting goods between cities difficult and expensive, the World Bank “Colombia Urbanization Review” points out.

Freight distances in Colombia are three times those in Brazil. This means that moving goods across Colombia is costly and that cities are poorly connected to markets, which can also affect the competitiveness and growth of the country, the study shows.

According to the document, increasing and connecting different types of transport between cities (rail, river and road) could reduce costs and increase economic efficiency.

The study makes three main points:

  • Economic connections between cities need to increase
  • Coordination within different regions and metropolis should be enhanced
  • Innovation and efficiency in the way cities finance themselves should be fostered

Most Colombians live in cities

The large majority of Colombians (75%) lives in cities, as the report shows. Urban activities have contributed to more than 50% of the GDP growth rate in the last 40 years.

Cities like Bogota, Cali, Medellin and Barranquilla dominate the economic land scape: only these four towns account for 30% of the population and many of the jobs.

However, unemployment rates in urban areas are above 12% - making a well-functioning urban system even more needed, as it could help foster growth and increase living conditions.

These trends, among others, are highlighted in a new publication: “Cities System: A visual approximation of the Colombian Case” (LINK).

These publications, analyzing Colombian cities, are part of the larger engagement of the World Bank with Colombia for a sustainable urban development in the country.

Efficient management of cities key to reduce poverty

Living conditions in Colombia have improved: more than 40 years ago, only 50% of people in large cities had access to electricity, water and sanitation. Now, there is almost universal access to basic services in cities. Data from 2005 show that poverty rates decrease with higher levels of urbanization.

Gaps between cities and the countryside have decreased, although differences are still felt: access to secondary school is only 55% in rural and 75% in urban areas.

Looking forward, the efficient management of cities and urban areas will be the key to whether Colombia can take advantage of a potential growth to reduce poverty and inequality, the study states.