Cali, the third-largest city in Colombia, located at the southwestern end of the Cauca Valley. The city was founded in 1536 by Sebastián de Belalcázar, a lieutenant of Pizarro. Despite its early foundation, its landlocked position long retarded its economic growth.
During colonial times, Cali was the economic center of slave-owning haciendas that provided supplies for the mining areas of Popayán, Antioquia, and Chocó. In the nineteenth century, the breakdown of mining and the lack of an adequate outlet to the Pacific Ocean kept the area isolated from world markets. One of the main battlegrounds during the slave-owners' rebellion of 1851 and the religious civil war of 1876, Cali remained a small town of 11,000 people, bypassed by the dynamic effects of the tobacco boom and even, at first, by the coffee economy.
The Panama Canal, which opened in 1914, provided an important stimulus to both Cali and the Pacific port of Buenaventura from the 1920s to the 1960s, ultimately establishing Cali as the main commercial center of the Cauca Valley. The importance of this outlet, as compared to the outlet of the Magdalena Valley, was greatly increased not only by the opening of the canal but also by the completion of the railroad (begun in 1878) connecting Cali with Buenaventura. In 1912 Cali had a population of 27,000; by 1918 it had grown to 45,000. By 2004 the city's population reached 2,369,696.
The transformation of the old haciendas into large-scale agribusinesses provided another stimulus to growth in the 1940s and 1950s. The influx of foreign capital into the manufacturing and the intermediate goods sectors made Cali one of the important industrial centers of the country. Industrialization in the region made Cali one of the fastest-growing urban centers in a very short time. Indeed, these economic prospects attracted rural-urban migrants. Rural violence and subsequent intensification of armed conflict also spurred significant migration and displacement to Cali.
Industry did not continue to expand after the 1960s, however. Whatever economic expansion there was came from commerce (including textiles, construction materials, tobacco products, and clothing) and public investment. By the 1990s, moreover, the city showed a prosperity that seemed to come from dubious sources, such as narcotics and related illicit ventures. Indeed, Cali was the base for one of two rival national groups involved in the cocaine and heroine trade. In the second half of the 1990s and first years of the twenty-first century, Colombia, including Cali, experienced a severe economic recession. Although difficult to prove, the jailing in 1995 of Cali's drug cartel leaders was a factor in the city's recession.
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Cali (kä´lē), city (1993 pop. 1,641,498), capital of Valle del Cauca dept., W Colombia, on the Cali River. It is an industrial and commercial center of the upper Cauca valley. Coffee, cotton, sugarcane, and soybeans are shipped through the city; and tires, tobacco products, textiles, paper, chemicals, and building materials are manufactured. Cali is also a tourist center. The city was founded in 1536, but its growth is relatively recent, with the population more than doubling in the 1950s. In the city are two universities and the headquarters of the Cauca valley development project, which is modeled after the Tennessee Valley Authority. The Cauca River has been drained for irrigation, hydroelectric power, and flood prevention. Cali's landmarks include an aqueduct and a cathedral. In the late 1980s and early 90s the city gained notoriety for the cocaine "cartel" based there.