Economy
From The Report: Colombia 2013
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Consistent macroeconomic growth in the past decade, averaging 4.5% from 2002 to 2012, has renewed investment confidence in Colombia. Strong economic performance is expected to continue with the IMF anticipating GDP growth of around 4.1% in 2013. With a liberal legislative framework for free trade zones and high investor protection, Colombia attracted the second-highest investment flows in the region as a percentage of GDP in 2012, at 26.2%. Five key engines for growth – mining, innovation, housing, infrastructure and agribusiness – are all set to receive a major boost as part of the government’s National Development Plan.
This chapter contains interviews with Juan Pablo Rivera, President, Bogotá Free Trade Zone; Sergio Díaz-Granados Guida, Minister of Commerce, Industry and Tourism; Karel De Gucht, EU Trade Commissioner; Gerardo Hernández Correa, Superintendent, Financial Superintendence of Colombia; Rubens V. Amaral Jr, CEO, Banco Latinoamericano de Comercio Exterior; Jim O’Neill, Chairman, Goldman Sachs Asset Management; and a viewpoint from Douglas L Peterson, President, Standard & Poor’s Rating Services.
Articles from this Chapter
Steady as she goes: Growth and greater stability point to a prosperous future
Enduring appeal: A flexible framework for free trade zones has paid dividendsOBGplus
If it were not for its history of crime and security issues, Colombia would likely be at the top of regional ease-of-doing-business rankings. Reforms implemented over the past 15 years have created an open environment conducive to an expanding private sector. One of the mechanisms for stimulating this expansion has been the implementation of a liberal legislative framework for the establishment of free trade zones (FTZs) around the country. BACKGROUND: As of June 2013 Colombia had 106 FTZs…
OBG talks to Juan Pablo Rivera, President, Bogotá Free Trade ZoneOBGplus
Interview:Juan Pablo Rivera What effect has business process outsourcing (BPO) had on the development of free trade zones (FTZs)? JUAN PABLO RIVERA: Some regions are shifting towards the development of BPO and knowledge process outsourcing (KPO) as part of their focus on economic growth. Bogotá Free Trade Zone (BFTZ) is about to start the construction of FZ Towers, a 110,000-sq-metre technology park with five towers that will be entirely oriented to the development of these sectors. Nearly…
The fight for second chair: A glance at economic development in urban centres around the countryOBGplus
Sustained macroeconomic growth in expanding uppermiddle-income countries such as Colombia depends on various of factors, one of which is the improved productivity of the internal economy. Economic efficiency in turn hinges on another set of factors, mainly the widespread deployment of infrastructure and the urbanisation of the population. What Colombia lacks in infrastructure development it makes up for with its large collection of growing urban centres. Unlike some regional neighbours, Colombia…
Mechanisms for improvement: OBG talks to Sergio Díaz-Granados Guida, Minister of Commerce, Industry and TourismOBGplus
Interview:Sergio Díaz-Granados Guida To what extent will the free trade agreement (FTA) increase your exports to the US? SERGIO DÍAZ-GRANADOS GUIDA: There are several ways in which the FTA with the US will generate benefits for Colombia, starting with permanent preferential access to our primary trading partner’s market. We now join the ranks of 20 countries with permanent commercial preferences and consequently obtain a relative advantage over other competitors. Quantifying an expected…
OBG talks to Karel de Gucht, EU Trade CommissionerOBGplus
Interview:Karel de Gucht How does the wave of expropriations and nationalisations in Venezuela and Argentina affect EU confidence in the legal stability of Peru? KARL DE GUCHT: Each country needs to be treated at on an individual basis, and companies are well aware of this. Businesses all over the world recognise the solid economic fundamentals and stable framework for investors that have been patiently created by Peru over the past decade. That is why trade and investment has increased so…
OBG talks to Karel de Gucht, EU Trade CommissionerOBGplus
Interview:Karel de Gucht How does the wave of expropriations and nationalisations in Venezuela and Argentina affect EU confidence in the legal stability of Peru? KARL DE GUCHT: Each country needs to be treated at on an individual basis, and companies are well aware of this. Businesses all over the world recognise the solid economic fundamentals and stable framework for investors that have been patiently created by Peru over the past decade. That is why trade and investment has increased so…
OBG talks to Gerardo Hernández Correa, Superintendent, Financial Superintendence of ColombiaOBGplus
Interview:Gerardo Hernández Correa In the wake of the 2008 financial crisis, what factors supported the country’s financial resilience? GERARDO HERNÁNDEZ CORREA: Our management of macroeconomic policies has historically been very successful. Colombia has been resilient to financial crises thanks to good administration of key elements such as public debt and inflation, which has led to adequate fiscal balance. The government applied countercyclical measures to reduce the effects of the…
Opening up: A raft of free trade agreements are steering the country toward an increasingly globalised economyOBGplus
Since the turn of the millennium, and in particular over the past few years, a number of bilateral free trade and investment promotion agreements have resulted in an increasingly globalised Colombian economy. Moreover, the establishment of regional trade blocs such as the Andean Community ( Comunidad Andina, CAN) and the Pacific Alliance have also furthered integration with nearer neighbours. Colombia’s exports broke the $60bn mark in 2012, registering $60.2bn for the year – though its…
OBG talks to Rubens V. Amaral Jr, CEO, Banco Latinoamericano de Comercio ExteriorOBGplus
Interview:Rubens V. Amaral Jr What will be the impact of Latin American banks expanding into regional markets? RUBENS V. AMARAL JR: We have seen a few acquisitions by Colombian banks taking place, so this could be a good case study. Maybe some banks identified limitations for expansion within the country in the short term, although if Colombia grows as it should, there is a lot of space for the financial institutions to mature. In general, the process follows certain phases: first, to follow…
OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset ManagementOBGplus
Interview:Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for emerging economies? JIM O’NEILL: We have started to see evidence of things slowing in many places, as well as falling job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But, I wonder whether there are bigger challenges ahead for some countries, and I do not just mean for the Brazil, Russia, India,…
OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset ManagementOBGplus
Interview:Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for emerging economies? JIM O’NEILL: We have started to see evidence of things slowing in many places, as well as falling job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But, I wonder whether there are bigger challenges ahead for some countries, and I do not just mean for the Brazil, Russia, India,…
A streamlined levy: Progressive fiscal reforms passed in late 2012 restructured the tax codeOBGplus
On December 26, 2012 Colombia’s Congress passed and approved Law 1607, a fiscal reform bill designed to modernise the tax system and in the process help stimulate job creation. The reform is also anticipated to have tangible effects in combating the high level of inequality by raising the top income tax rates and creating vehicles for increased social spending, while improving government tax revenue stability. The administration’s initial proposal for tax and fiscal reform called for changes…
Paradise offshore: Growing BPO sector is becoming an integral part of the wider IT marketOBGplus
Business process outsourcing (BPO) operations have become a focal point of growth within the broader IT market. As a platform for providing services within Latin America, the US and Spain, Colombia has several advantages, including an investor-friendly regulatory framework, competitive wages, a neutral Spanish accent and a variety of suitable locations. PROMISING GROWTH: BPO industry revenues reached $763m in 2011 and made up 41% of total IT services revenue, according to the International…
Douglas L Peterson, President, Standard & Poor’s (S&P) Rating Services, on re-entering international capital marketsOBGplus
Few countries have seen economic growth as consistently as Colombia, where I lived as a student in a university exchange programme in 1977 and 1978. Over the past 50 years, only once – in 1999 – did the growth take a negative turn. However, because of its recent history, challenged by security and drug-related conflicts, Colombia has been relatively isolated from international capital markets. Yet improved security, more conservative fiscal and monetary policies, and entry into free-trade agreements…
