Interview: Ángel Gurría
What impact will OECD accession have on Colombia?
ÁNGEL GURRÍA: OECD accession will benefit Colombia’s reputation and help boost investor confidence by clearly signalling that this is a country that observes the highest global standards, a commitment to pluralist democracy, open and transparent markets and a goal of sustainable development. Joining the OECD demonstrates to investors that Colombia follows key standards in areas such as corporate governance, investment, competition, financial markets and public administration.
Although Colombia’s business environment has improved, some challenges remain. The regulatory burden is heavy, and there is room to boost competition and to facilitate entry. The OECD’s best practices in this area can help substantially and Colombia has already started to take advantage of them. For example, during the accession process, Colombia started to undertake impact assessments of some of its new regulations. Other best practices that could be useful for Colombia include one-stop shop mechanisms, which have benefitted other OECD countries, such as Mexico.
How can corruption and informality be reduced?
GURRÍA: Colombia has made good progress in fighting corruption in recent years. The creation of a National Directorate for Prosecution against Corruption, the reinforced independence of the Superintendence of Companies, the new General Integrity Code, and the Transparency and Access to Public Information Law are all big steps in the right direction. Stronger legislation to fight foreign bribery, leading to the first ever sanctioning of a Colombian company, is also a good sign, though there is room for improvement. The current priorities for Colombia should be to pass whistleblower protection legislation, reinforce electoral accountability, strengthen the financial intelligence unit, and extend local and regional anti-corruption efforts.
The recent tax reform includes a number of important measures to tackle fraud and evasion, both domestically and abroad. Colombia needs to consider how best to use technology to analyse the increased amount of data now available to tax authorities, thanks to the implementation of the OECD’s transparency standards. This information can be used to help uncover under-reporting, evasion or fraud, as well as to minimise the compliance burden through automated processes.
Colombia can also do more to prevent labour informality, which is still widespread. Almost 60% of employed people aged 15-64 work informally and without social security coverage. Progress can be made in this area by promoting skills development, reducing non-wage labour costs, reviewing the minimum wage to promote job creation and strengthening the link between social security contributions and benefits.
How would you assess Colombia’s current diversification policies, and what more could be achieved?
GURRÍA: Boosting and broadening growth is a key economic goal. Fiscal revenues and exports remain highly dependent on oil prices, leaving Colombia exposed to unpredictable shocks. Exposure to trade is also low, with exports accounting for less than 15% of GDP and participation in global value chains very limited. Colombia has solid foundations to explore new export opportunities beyond extractive activities, such as in agriculture and services. Raising productivity is vital, particularly for medium-sized enterprises.
Progress to boost productivity and broaden growth has been achieved recently, as in the increased use of 4G. Further efforts are needed to improve infrastructure, such as secondary and tertiary roads in rural areas, as well as to improve logistics services, which contribute to high costs for trade and hamper the competitiveness of Colombian firms. Facilitating entry and competition in key sectors, such as transport, would be particularly useful. Colombia’s educational outcomes have improved over time, supporting productivity, but there is still potential to better align skills to labour market needs.
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