An overview of Colombia Colombia is a constitutional country found in the northwestern part of South America. The country is bordered by Brazil and Venezuela to the east, Peru and Ecuador to the south and the Caribbean Sea to the north. The Muisca and the Quimbaya were the original inhabitants of Colombia. In 1499, the Spanish invaded the territory and colonized it up to the 19 th century. During their reign, the Spaniards created the Viceroyalty of Peru. It was later in changed to the Viceroyalty Granada that comprised of a number of countries that are found in the northern part of South America. Bogota was the capital of Viceroyalty Granada. In the year 1819, Viceroyalty Granada got its independence from Spain. In 1830, the Republic of Granada was formed (Boix, 2003). This country comprised of the present day Colombia and Panama. However, in 1903, Panama seceded from the coalition. This was after a long struggle of independence after the Republic of Colombia was declared in 1886 (Garcia, 2010). Colombia is the first country to be declared an independent state in South America. The country has a strong history of politics that has affected the various sectors of its economy. The country is comprised of citizens of almost every race in the world. This has made it to have a rich culture and heritage. This paper will therefore focus on the economic and political transition of Colombia since the world war. It will also concentrate on the impacts of these two factors (politics and economy) on the well-being of the country. Economic Transition of Colombia since the Second World War During its early days up to the end of the Second World War, Colombia had been experiencing a lot of transitions in its form of government. This has resulted to two great wars in the country, the war of a thousand days that occurred between 1899 and 1902 and La Violencia that occurred between 1948 and 1966 (Mendez, 2009). Both these wars resulted to the loss of hundreds of thousands of lives and massive destruction of property. As a result, the economy of the country was greatly affected. The gross domestic product and the gross national product of the country declined. The wars also destabilized major sectors of the economy. Agriculture was one of the sectors of the economy that was greatly affected by the war. During those days, agriculture was the major economic activity of Colombia. The export of coffee was the major foreign exchange earner of the country. La Violencia specifically hindered this economic activity. The economy of the country therefore declined between the 1950 and 1980s. It was characterised by high rates of inflation and unemployment. The prices of goods and services were also relatively high. In addition, the gap between the rich and the poor was high. The economy of Colombia had been highly regulated by the government since early 1950s up to early 1990s (Coppedge, 2005). During this time, the government had the control of most of the sectors of the economy. Private investment was only limited to a small portion of the economy. As a result, the government had the influence on market forces and controlled the prices of goods and services. This in turn led to unfair competition between state owned and private corporations. Most state owned corporations enjoyed the monopolies that they had in their various markets. Due to lack of competition, the quality of good