TECHNOLOGY WITHOUT BORDERS
Colombia as a location for
software development and BPO
services exports

Reason # 1:
Qualified and cost competitive human resources

World Competitiveness Report (2006)
Availability of Qualified Engineers Availability of Competent Managers
(0= not available; 10= available) (0= not available; 10= available)
7 Chile Chile 3 Chile 7.40
8
22 Colombia Colombia 7.13
7 Colombia
6
27 Brazil
7 Brazil 6.02
Spain 29
38 6
Argentina 5.43
Venezuela 37
42 6
Mexico 5.23
Argentina 40
44 6
Mexico Venezuela 4.28
6 55
48
5.00 6.25 7.50 8.7510.00 0 2.25 4.50 6.75 9.00
Ranking (61 countries or regions) Ranking (61 countries or regions)
Source: The World Competitiveness Yearbook 2006-IMD

Competitive cost of qualified professionals
Colombia: Average monthly
Average Income of an IT developer
US$ annual (2005) income by job description
US$ monthly (2006)
Colombia 10,494
Position Monthly Average
Income US$
Argentina 10,512
Brasil 13,492 Support and
Technology Manager $4.123
Chile 14,500 Technical Support
Chief $2.053
México 14,738 Computer Engineer $1.540
Technical Support
Costa Rica 15,400 Engineer $1.268
0 4,500 9,000 18,000 Support Staff $552
Source:Economist Intelligence Unit, Pay Scale 2005 Source:Human Capital Consulting 2005-2006

University students enrolled in computer
engineering programs or similar degrees (2003-2005)
50,000
47,452 47,657
45,649
45,000
40,000
1
2003 2004
2005
32,428 students completed a degree in computer engineering or similar
programs between January 2001 and June 2004 *
* Includes technical and University degrees (undergraduate, Masters, PhDs)
Source: Ministry of Education and “Graduados Colombia”

Reason # 2:
Cost competitive and reliable infrastructure

Investment in telecommunications
infrastructure as % of GDP
Source: IMD World Competitiveness Year Book 2006
Some indicators (2005):
• Fixed Lines: 177 subscribers per1000 People.
• Mobile Telephone Users: 28 million users (60% penetration).
• PC’s penetration: 76 PC’s per 1000 People

Telecommunications cost
Cost of Residential Fixed Line
Phone (2005)
US$ monthly
Colombia 5,8
Costa Rica 5,9
Ecuador 9
Guatemala 10,5
El Salvador 12,9
México 15,5
Chile 16,4
0 5 10 15 20
Source: World Development Indicators 2006

Rapidly diminishing internet access cost
Cost of Internet access (2003) Colombia: Monthly cost of high speed US$
US$ per month -128 kpbs and 256 kpbs connections-
Colombia 18.6
• High speed internet users
90.0
Chile 21.8 increased 151% going from
127.113 subscribers in 2004 to
México 22.6 318.683 in 2005.
72.5
Costa Rica 25.8
Guatemala 31.2 55.0
Ecuador 31.8
37.5
El Salvador 48.1
0 12.025 36.075 20.0
2003 2004 2005 2006
256 kpbs 128 kpbs
Source: World Development Indicators 2006. Source: Comisión de Regulación de Telecomunicaciones

Connectivity and Redundancy
•3 d i f f e r e n t s u b m a r i n e
cables connecting with US to
ensure high speed connectivity
and redundancy . The Arcos-1
underwater optical fiber line
system connects Colombia
with the Americas, Europe and
Southeast Asia.
• Colombia counts with a
modern digital network of
satellite telephony, waves, and
optical fiber lines.
Source: PC WORLD, Instituto Geográfico Agustín Codazzi 2006

Quality of telephone infrastructure and
electricity supply
Source: Global Competitiveness Report (2006)

Reason # 3:
A local growing IT market and BPO industry

Colombia in numbers
The fifth largest economy in Latin America and the third largest in terms of population
GDP in Latin America (2005) Population in Latin America (2005)
Current Prices, US$ MM MM of persons
Brazil 792683 Brazil 184
Mexico 768737 Mexico 105
Argentina 181662 Colombia 42
Venezuela 132848 Argentina 39
Colombia 122610 Peru 28
Chile 113956 Venezuela 26
Peru 78576 Chile 15
Ecuador 33062 Ecuador 13
Costa Rica 19782 Bolivia 9
Uruguay 15926 Paraguay 6
Bolivia 9650 Costa Rica 4
Paraguay 7247 Uruguay 3
0 200000 400000 600000 800000 0 50 100 150 200
Source: International Monetary Fund and World Bank,
* Data for Colombia in 2005 from the Central Bank and DANE

Colombia: IT industry revenues
(2000, 2004 and 2009 f) US$ millions
3000
2370
2250
1513 1611
1500
1123
922 874
708 650
750
419 373
172 253
0
2000 2004 2009 (f)
IT Hardware Software IT Services
Total IT Revenues
Source: IDC Colombia, Business Software Alliance BSA, 2005

Colombia: IT professional services in 2004
(% distribution by category)
Integration and development
22%
Outsourcing
33%
Trainning and Education
2%
Support and Instaling Consulting
31% 12%
In 2004, the IT market of professional services reached sales of US$ 673 millions.
The estimate for 2005 was US$713 millions.
Source: IDC Colombia

Call Centers in Colombia
COLOMBIA CALL CENTERS
INDUSTRY REVENUE
A great variety of services are provided (in million COL PESOS)
in Colombia such as customer service,
telesales, collections, market research,
order taking and back office services.
Colombia is the Regional Contact
Center base for many US/International
multinationals such as HP, Microsoft, IBM,
TNT, McDonalds, Xerox, Citibank, Nestlé,
Kimberly-Clark, etc.

Reason # 4:
Strategic location, access to other markets
and incentives to investors

Strategic Location as a base for the Americas
(flight times to main cities)
Same time zone as the
United States’ East Coast
Source: Aviatur, U.S. Dept. of Agriculture

Incentives to foreign trade
Santa Marta • 10 Free Trade Zones (FTZ)
Barranquilla - Flat 15% income tax rate for industrial
Cartagena
Candelaria
users and no tax on remittances abroad.
- Tax exemption on duties and VAT on
imports of capital equipment and production
Cucuta inputs.
-Non restricted foreign exchange
management.
Rionegro
- Expedite and simplified procedures.
Quindio
Bogota
Pacífico • Large exporter regime (Altex)
Palmaseca - No payment of VAT on industrial
machinery that is not produced in the
region.
-Favorable customs procedures
• Vallejo Plan
- Imports of inputs and raw materials are
exempt from duties and VAT, if they are
used in production of goods that will be
exported.

Reason # 5:
Colombia’s improved business environment

Economic growth
Colombia has grown on average faster than the Latin American Region as a
whole. GDP grew 6.8% in 2006.
GDP Growth: Colombia vs. Latin America (1980-2006f) %
10.0 6.8
7.5
5.0
2.5
0
-2.5
-5.0
1981 1983 1985 1987 1989 1990 1992 1994 1996 1998 2000 2002 2004 2006f
Latin America Colombia
Source: Economic Commission for Latin America and the Caribbean (ECLAC), DANE, Forecasts ECLAC and National
Planning Department

Inflation and interest rates
Colombia’s inflation rate in 2006 (4.5%) was the lowest in 42 years. Interest rates
have remained low and stable since 1999.
Inflation Rate (1997 – 2006) Interest Rates (1997 – 2006)
% %
17.7
18 16.7 60
15
45
12
9.2 30
8.8
9
7.7
7.0
6.5
6 5.5
4.9 4.5 15
3
1997 1999 2001 2003 2005 0 2006
2006
1997 O M A F JL F JL F JL F JL F JL F J O M A F J O
Deposits
Source: Central Bank
Placements

Improved security indicators
Security levels have increased dramatically since 2002
Perception on Safety * (2002 – 2006)
100
95
90
85
80
Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
* Percentage of businessmen who believe security levels have improved.
Source: Opinion survey by the National Association of Industry (ANDI)

Increased security brings more visitors
The number of foreign visitors to Colombia doubled between
2002 and 2006
1.300.000
1300000
1300000
1100000 1050569
933244
900000
790940
700000 615623 624909
566761
500000
2001 2002 2003 2004 2005 2006 2007p
P: Proexport’s projection
Source: Departamento Administrativo de Seguridad - DAS

Improved stability indicators
People's safety and private property Risk of political instability
protection (0= not protected, 10= protected) (0= high, 10= low)
Chile 13 Chile 9.1
32 7
Colombia 39 6.6
50 4
Brazil 6.3
53 4 42
Mexico
56 3 51 4.9
Argentina
2 54 4.5
59
Venezuela
61 1 61 1.7
0 2.5 5.0 7.5 10.0
0 2.5 5.0 7.5 10.0
Ranking Ranking
(61 countries) (61 countries)
Source: World Competitiveness Yearbook 2006-IMD

Spread on sovereign debt
Emerging Markets Bond Index (EMBI) (2002-2006)
Basic Points
2006
Source: JP Morgan - National Planning Department forecast
Standard & Poor’s improved Colombia’s sovereign debt rating from BB
to BB+ on March 5, 2007, due to the country’s improved growth
prospects and fiscal performance

Market confidence
March, 2007 -
Standard & Poor´s
upgrades debt
rating from BB to
BB+

Exports
Colombia's total exports doubled in the last four years
Exports (1995 – 2007f)
US$ MM
54000
40500 27000
24391
21188
27000
16730
13158 12330 13128
11617 11975
9758 10582 11549 10865
13500
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007p
Columnas 3
P: Proexport´s Forecast
Non Traditional
Source: DANE, Proexport Traditional

Foreign Direct Investment
Colombia received in 2005 and 2006 the highest inflows of FDI
recorded to date
FDI Flows (1994-2006)
US$ MM
15000
10,255
11250 Sab Miller´s
investment US
$ 4,715 MM
7500
3750
5562 5540 6295 6000
3112 2829 2525 2139 1758 3084
1447 968 1508 2395
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*
* Proexport forecast
Source: Balance of Payments, Central Bank

Foreign investors present in Colombia
Almost 700 multinational companies have operations in Colombia

Main investors by country of origin (1994 – 2005)
USA
England
Spain
Panama
Virgin Islands
Cayman Islands
Bermuda
Netherlands
Mexico
Canada
Others
* Excluding the petroleum sector and reinvestment of profits
Source: Central Bank

Some recent articles on Colombia
“Colombia's strong fundamentals
stand out. Its $130 billion economy, a
world leader in the production of
coffee, petroleum, textiles, and
flowers, is growing at 6.8% a year,
two full points faster than the Latin
American average. In the past 10
years, Colombia has slashed its
inflation rate from 18% to 5%, and
since Uribe was elected,
unemployment has dipped from 16%
to 13%. The nation has never
defaulted on its debt or experienced
hyperinflation. And entrepreneurial
thinking is spreading”

Some recent articles on Colombia
“Colombia has been fighting to prove
that it is a safe and worthwhile
investment destination and has now put
itself firmly back onto the investment
map. Courtney Fingar reports from
Bogotá and Medellin”
FDI (A Financial Times publication)
December 2006/ January 2007 Issue

Londres
The Banker,
October –
November 2006.

The Economist
noted Colombia’s
increasing appeal as
a tourist destination
on its June 2006
issue

Further inquiries or questions
For more information:
Andy Hilliard
Director of Business Development
PSL
andy@oneworld-technology.com
U.S. 704.649.1087
TECHNOLOGY WITHOUT BORDERS