International Finance - Essay Example

The map displayed above marks those areas of the globe in ‘gold’ that still practice the use of pesos today. The Peso had been the official currency of the Republic of Columbia since 1837, when it replaced the ‘real’ at the rate of 1 peso = 8 reales. However, just a decade later, the Colombian peso was decimalized so that 1 peso could now be exchanged for 10 reales. According to the standards set by the International Organization of Standardization (ISO) for defining the names of currencies, it is abbreviated as COP.

Although officially it is denominated in $, the standard abbreviation of the currency among the nationals is Col $. The Republic of Colombia, with a total area of 1,138,910 square kilometers, is the fifth largest of all the Latin American nations and is about one-ninth the size of USA. As is evident from the displayed map, the country is largely surrounded by Venezuela and Brazil in the east, Ecuador and Peru in the south, Panama and the Caribbean Sea in the north and the Pacific Ocean to the west.

Being a part of the Pacific Ring of Fire, the country is prone to earthquakes and volcanic eruptions. A densely populated nation, with a population of nearly 45 million – the 29th largest in the world, the country also has a long history of being one of the most lagging nations in the world in terms of poverty. Colombia is basically an agro-based economy with an abundance of the fertile volcanic soil, tropical forests occupying almost half of the land area in the country and supply of cheap labor.

Moreover, the tropical climate in the region is also appropriate for agricultural production. The profusion of inexpensive labor and huge agricultural production has flourished agro-based industries in the nation. These industries are largely concentrated around the processing of agricultural, mineral, and forest products and supplying domestic consumer demand for goods like machinery, vehicles, tools, building