Interview: Rosario Córdoba Garcés
How can Colombia better reach the goal it set for itself in becoming the third most competitive country in the region by 2032?
ROSARIO CÓRDOBA GARCES: 10 years ago Colombia defined its vision for 2032, to be one of the three most competitive countries in Latin America, with a per capita income equivalent to that of a medium- to high-income country. We have demonstrated progress in areas such as financial development, macroeconomic stability and a highway infrastructure programme.
All of this has already helped us advance in the World Economic Forum’s Global Competitiveness Index, moving from 63 out of 122 countries in 2006, to 61 out of 138 in 2016. However, advancement with regard to our Latin American peers is proving more difficult; currently we are still in fifth place in the region, highlighting that there are still numerous challenges and issues that Colombia needs to address.
First, we must improve our institutions by increasing public service capabilities for the implementation of the Peace Accord, in addition to battling corruption and improving the credibility and efficiency of our justice system. For instance, as the World Bank’s 2016 “Doing Business” report shows, a Colombian business would have to wait almost three and a half years for a court to resolve a commercial dispute – this is two or three times more than in Mexico or Brazil. Second, we need to increase both the coverage and quality of education. Data from the Ministry of Education shows that for every 10 students starting first grade, only four graduate from high school. We need to tackle the problem of dropouts in middle and high school and guarantee that our students are educated in the areas needed to be more productive. Lastly, we must build a more efficient infrastructure and logistics system. According to the National Planning Department, only 58% of orders are delivered in perfect condition, a toll for domestic and international trade as well as value chains. It is key that we set up the right regulation to make our transport more competitive, and that we complement the airport and highway system with railways and river transport.
What actions should be taken by Colombia to increase its productivity and competitiveness?
CÓRDOBA: Productivity is fundamental for increasing the well-being of Colombians, yet unfortunately it has not risen at the same pace as competitiveness. We now need close to five Colombian workers to produce the same value added by one US worker. This gap is much larger in sectors like agriculture, a key one in the post-conflict era, where we need almost 11 Colombian workers per US worker, mostly due to low technification in the countryside.
We have studied the drivers of productivity in Colombian firms and found that around 65% of growth is related to efforts such as adopting technology to enhance efficiency in the production process or creating new products that can reach higher-value markets. Around 35% of productivity growth is related to conditions in well-functioning markets, such as lower mobility restrictions on capital and labour, and so forth. Colombia needs to put forward a strong agenda in the areas of market efficiency, and technology and innovation at the firm level.
The importance of competition is unquestionable, as it is one of the factors behind market efficiency. Rivalry and competition are the essence of a market economy and its ability to create wealth. In recent years we have had clear progress with a stronger and more independent Superintendence of Industry and Commerce, and we have focused on the need for companies to concentrate on growth and innovation.
However, there is potential for more, in particular by further opening the economy to foreign trade. This can serve to significantly benefit economic activity in the country, not only because of the effects of competition from top performing international firms, but also with further access to global inputs and value chains.
You have reached the limit of premium articles you can view for free.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.
If you have already purchased this Report or have a website subscription, please login to continue.