Foreign Direct Inv

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  • Foreign Direct Inv

    1. 6. FOREIGN DIRECT INV. (2004) – BY SECTORS
    2. 12. OUTLOOK (2): “THE INTERNAL AGENDA” – SECTORAL COMPONENT <ul><li>GOODS </li></ul><ul><li>Textiles, Apparel. </li></ul><ul><li>Leather/Wear, Footwear. </li></ul><ul><li>Forestry, Wood, Furniture. </li></ul><ul><li>Pulp, Paper, Printing. </li></ul><ul><li>Sanitary, Cosmetics. </li></ul><ul><li>Automotive, Autoparts. </li></ul><ul><li>Home Appliances. </li></ul><ul><li>Electrical, Electronic. </li></ul><ul><li>Metal Industry. </li></ul><ul><li>Coal. </li></ul><ul><li>Jewelry. </li></ul><ul><li>SERVICES </li></ul><ul><li>IT, Telecommunications. </li></ul><ul><li>Energy. </li></ul><ul><li>Health Care. </li></ul><ul><li>Tourism. </li></ul><ul><li>Transp., Logistics. </li></ul><ul><li>Professional Services. </li></ul><ul><li>Financial Services. </li></ul><ul><li>Education. </li></ul><ul><li>Software </li></ul>Multiple projects and funding are expected in all or most of the following supply chains:
    3. 13. OUTLOOK (3): EXISTING INCENTIVES <ul><li>Foreign investors in Colombia may also benefit from additional, existing incentives: </li></ul><ul><li>Access to Free Zones with tax, duty and exchange incentives. </li></ul><ul><li>Access to Special Economic Zones: similar incentives for new, export-oriented projects. </li></ul><ul><li>Special financing facilities. </li></ul><ul><li>Availability of “Large Exporter” preferential treatment. </li></ul><ul><li>Import-Export duty-free treatment programs. </li></ul>
    4. 15. Source: World Economic Forum Despite recent improvements, a large group of countries still out-ranks us. COLOMBIA`S COMPETITIVENESS
    5. 16. SELECT COUNTRY ADVANTAGES
    6. 17. REDUCTION OF RED TAPE 10 Leading Reforming Countries (2003) Source: World Bank, International Financial Corporation
    7. 18. RISING EXPORT TREND
    8. 19. HISTORICAL FIXED CAPITAL FORMATION
    9. 21. FINANCIAL FACTS <ul><li>Colombia is not a major exporter of financial services. However, its financial sector’s current solidity and profit potential bode well for a renewed inflow of private capital, a precondition to any export strategy. </li></ul><ul><li>Colombia’s financial sector overcame its 1998-2000 crisis, and is currently back on the track of soundness and growth: </li></ul><ul><li>Demand for credit is on the rise: following annual average decline rates nearing 10% during the crisis, demand grew 10% in 2004 (13,3% recorded on April 2005). </li></ul>
    10. 22. FINANCIAL FACTS (CONT.) <ul><li>Financial asset quality has improved significantly. </li></ul><ul><li>Sustained increase of profitability. </li></ul><ul><li>Reversal of negative growth rates in the returns on equity: after falling 30% in 1998-2000, they grew 22% in 2004. </li></ul>
    11. 25. Total Asset Quality and Coverage Source: Superintendency of Banking Quality Indicator = Past due/Total loans Coverage Inicator = Loss reserves/Past due loans COLOMBIA’S FINANCIAL SYSTEM 16.3 3.4 2 4 6 8 10 12 14 16 18 Abr-95 Oct-95 Abr-96 Oct-96 Abr-97 Oct-97 Abr-98 Oct-98 Abr-99 Oct-99 Abr-00 Oct-00 Abr-01 Oct-01 Abr-02 Oct-02 Abr-03 Oct-03 Abr-04 Oct-04 Abr-05 Percentage 138.5 20 40 60 80 100 120 140 160 Abr-95 Oct-95 Abr-96 Oct-96 Abr-97 Oct-97 Abr-98 Oct-98 Abr-99 Oct-99 Abr-00 Oct-00 Abr-01 Oct-01 Abr-02 Oct-02 Abr-03 Oct-03 Abr-04 Oct-04 Abr-05 Percentage
    12. 26. Capital Adequacy Index Source: Superintendency of Banking COLOMBIA’S FINANCIAL SYSTEM 8 9 10 11 12 13 14 15 16 Ene-00 Abr-00 Jul-00 Oct-00 Ene-01 Abr-01 Jul-01 Oct-01 Ene-02 Abr-02 Jul-02 Oct-02 Ene-03 Abr-03 Jul-03 Oct-03 Ene-04 Abr-04 Jul-04 Oct-04 Ene-05 Percentage Solvencia con RM Mínimo: 9%
    13. 28. Public Participation as % of Total Assets * April 2005 Source: Superintendency of Banking COLOMBIA’S FINANCIAL SYSTEM 16.2 33.0 14 17 20 23 26 29 32 35 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* Percentage
    14. 29. Profitability and Efficiency (ROE) Return on Equity: Net Earnings/Equity (ROA) Return on Assets: Net Earnings/Assets Source: Superintendency of Banking COLOMBIA’S FINANCIAL SYSTEM -4 -3 -2 -1 0 1 2 3 4 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 ROA (Percentage) -40 -30 -20 -10 0 10 20 30 ROE (Percentage) ROA ROE
    15. 31. TOURISM – A BUSINESS OPPORTUNITY There is a great potential for tourism to increase its share in Colombian economy Source: National Tourist Registry Country Comparison Share of GDP (2003) 0 3 6 9 Colombia Ecuador* Costa Rica Argentina México %
    16. 32. TOURISM – LODGING CAPACITY Source: National Security Department Yearly upturns in the amount of incoming tourists point to the adequacy of lodging capacities. 520.000 600.000 680.000 760.000 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total incoming tourists
    17. 33. TOURISM DIVERSITY <ul><li>A world leader in destination diversity: </li></ul><ul><li>Ecological </li></ul><ul><li>Sun and beaches </li></ul><ul><li>Sports and adventure </li></ul><ul><li>Rural </li></ul><ul><li>Agrarian </li></ul>
    18. 34. PRODUCT DISTRIBUTION Source: National Tourism Registry
    19. 35. TOURISM IN NUMBERS Source: Central Bank, National Planning Department, Tourism Police 2.12% 2.08% 2.11% Hotels and Restaurants / GDP 624 551 590 Incoming Foreigners (thousands) 43.20% 1381 1209 2001 50% 43.4% % of Hotel Occupation 1061 1277 Incoming Colombians (thousands) 1363 1350 Total Sales (millons of US$) 2003 2002 INDICATORS
    20. 36. GUESTS – COUNTRY OF ORIGIN (2003) Source: National Tourist Registry
    21. 37. INVESTMENT INCENTIVES <ul><li>Income tax exemption for ecotourist services providers </li></ul><ul><li>30 – year income tax exemption for new hotel developments and refurbishing to be conducted in the next 15 years. </li></ul><ul><li>Tourist Duty Free Zones </li></ul><ul><li>Duty free treatment on imports for lodging facilities </li></ul>
    22. 38. SELECT INVESTMENT PROJECTS <ul><li>Pereira – Natural theme park (Design and Construction) </li></ul><ul><li>Barú Island – Tourism development </li></ul><ul><li>Armenia – Cultural Center (Construction) </li></ul><ul><li>La Virginia – Turistical Promenade (Construction) </li></ul><ul><li>San Andrés, Cali and Popayán – Convention Centers </li></ul>
    23. 40. COLOMBIA’S SOFTWARE INDUSTRY - OVERVIEW <ul><li>2004 Cross-Border IT Exports: US$ 13 mill. </li></ul><ul><li>65 companies registered IT services contracts in 2003, totalling US$ 14.086.000. </li></ul><ul><li>82 companies totalling US$10.001.905 (Jan.-Jul. 2004). </li></ul>Source: Central Bank, World Bank, Ministry of Trade, Industry and Tourism. Infrastructure 2001 1995 68.6 16.3 42.1 PCs / 1,000 people 1,154.0 Internet users (thousands)
    24. 41. INTERNATIONAL STANDING Source: Chudnovsky, D., López A. y Melitsko S., (2001) Country Comparison – Software Industry Growth Rate 1992-1999 0 4 8 12 16 20 Spain Mexico India Brazil Argentina Colombia %
    25. 42. MORE FACTS ABOUT THE INDUSTRY Source: DANE: EAM. EAC, Encuesta anual de servicios Constant innovation and accelerated development yield state-of-the-art solutions Sectoral Growth Rate – Annual Average 2000-2002 -1 3 7 11 Added Value Employment % Software Trade Industry
    26. 43. Source: Conectivity Agenda A MULTI – FUNCTIONAL INDUSTRY Software Demand by Economic Activity 0 16 32 48 64 80 Trade and services Industry Government Financial Education Health and Social Security Public Services Construction Transportation Agriculture Communications Others %
    27. 44. EXPORT PRODUCTS POTENTIAL <ul><li>Development of software for the following sectors: </li></ul><ul><ul><li>Telecomunications and domestic public services </li></ul></ul><ul><ul><li>Fixed and mobile telephone network, Cable television and Internet </li></ul></ul><ul><ul><li>Financial institutions </li></ul></ul><ul><ul><li>Personnel Management. </li></ul></ul><ul><li>Customer service mobile and wireless solutions </li></ul><ul><li>Information systems : </li></ul><ul><ul><li>Financial management and administration of physical resources </li></ul></ul><ul><ul><li>Accounting for the financial sector </li></ul></ul><ul><ul><li>Management of mutual, investment and retirement funds </li></ul></ul><ul><ul><li>Geographical information systems - GIS </li></ul></ul><ul><ul><li>Management evaluation systems </li></ul></ul><ul><li>Consulting services in: </li></ul><ul><ul><li>IT Project management, IT infraestructure diagnosis, computer centers. </li></ul></ul><ul><ul><li>SAP implementation in the education sector </li></ul></ul><ul><li>Software manufacturing services, transfer of physical information contained in documents to electronic media </li></ul><ul><li>Content managers, intranets and extranets </li></ul>Source: Proexport - Colombia
    28. 45. ANTI – PIRACY LAW ENFORCEMENT <ul><li>Colombia reduced software piracy from 74% in 1994 to 53% in 2003. (International Data Corporation (IDC)) </li></ul><ul><li>Piracy rate is below the average in Latin America - 63%. (Business Software Alliance) </li></ul>Only country in Latin America featuring a network of software development clusters (Parquesoft), where highly innovative technological projects are being pursued. Each regional cluster is composed by companies exclusively engaged in software development for different economic sectors. <ul><li>Bucaramanga </li></ul><ul><li>Cali </li></ul><ul><li>Tulúa </li></ul><ul><li>Bogotá </li></ul><ul><li>Eje Cafetero </li></ul>
    29. 46. <ul><li>Companies licensing software products with high national research content may benefit from a 10 year income tax exemption. (Law 788 of 2002) </li></ul>INCENTIVES FOR INVESTORS
    30. 48. <ul><li>The country’s health care system was ranked first in Latin America and 22 nd in the world (World Health Organization, 2000). </li></ul><ul><li>The industry is also credited by its Latin American peers as a leading regional provider. </li></ul><ul><li>Competitive costs and quality excellence. </li></ul>COLOMBIA’S PRIVILEGED STANDING
    31. 49. HEALTH CARE - ADVANTAGES Solid physical/ technological infrastructure Highly Qualified Human Capital Advantages Longstanding experience and prestige Low costs in highly complex treatments Diversified portfolio of export services
    32. 50. <ul><li>Recipient Markets </li></ul><ul><li>Costa Rica </li></ul><ul><li>Panama </li></ul><ul><li>Dominican Republic </li></ul><ul><li>Aruba and Curacao </li></ul><ul><li>Venezuela </li></ul><ul><li>Ecuador </li></ul><ul><li>Peru </li></ul>A PROMISING POTENTIAL <ul><li>Areas of Expertise </li></ul><ul><li>Kidney transplant </li></ul><ul><li>Bone marrow transplant </li></ul><ul><li>Endovascular transplant </li></ul><ul><li>Pediatrics </li></ul><ul><li>Obstetrics </li></ul><ul><li>Cardiovascular </li></ul><ul><li>Plastic surgery </li></ul><ul><li>Aesthetic dental practice </li></ul><ul><li>Fertilization </li></ul><ul><li>Ophthalmology </li></ul><ul><li>Cardiology </li></ul>
    33. 51. LOW COMPARATIVE COSTS FOR HIGHLY COMPLEX TREATMENTS AND INTERVENTIONS. ELECTRONIC TRANSMISSION OF DIAGNOSES AND MEDICAL OPINIONS. SIZABLE REGIONAL DEMAND FOR HEALTH CARE SERVICES SPECIAL DUTY TREATMENT FOR IMPORTS OF HEALTH-RELATED GOODS AND INPUTS O P P O R T U N I T I E S OPPORTUNITIES
    34. 53. ENGINEERING SERVICES HIGHLY COMPETITIVE ENGINEERING SERVICES Advantages Availability of highly qualified personnel (Master and PhD holders) Quality management expertise that meet or supersede international standards Technological and physical expertise necessary to undertake very demanding projects Ability to maximize the use of available resources. Reasonable compensation fees Extensive experience in overcoming topographical hardships
    35. 54. The industry’s abilities - in brief Development of Infrastructure projects Study and design preparation; supervision of construction projects; quality management of energy, transportation, irrigation, mining and manufacturing projects. Tariff estimation for specific projects, e.g., public services and toll systems. Variable size-scale development of telecommunications projects. Air photography, geodesy and topography, photogram try, cartography, photo interpretation, propriety surveys, evaluation and cadastre. ENGINEERING ABILITIES
    36. 55. FACTS The development of strategic domestic projects over the past years has put to test Colombia’s engineering abilities, while strongly positioning its industry to compete internationally. A 180-kilometer long highway (US $50,3 million) connecting several cities in the Colombian plainlands is only one example. Participation in foreign high-tech projects adds on to this record : Costa Rica: Hydroelectric projects, feasibility studies. Peru: Roads design and rehabilitation, transmission lines and basic sanitation. Dominican Republic : Roads concessions, environmental studies Mexico: Design of transmission lines systems. Venezuela: Hydrocarbon and gas transportation networks. Puerto Rico: E lectrical installation designing.
    37. 56. www.mincomercio.gov.co

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