1. Colombia and
Latin America
The challenges ahead
ÁlvaroUribeVélez
Toronto, Canada
September 2011

2. Issues to be covered
 Where is Colombia today
1. From Democratic Security to Democratic
Prosperity
2. The current challenges
 The regional picture
1. Opportunities, Challenges and risks
2. The Future is now
 Canada's role in the Americas

3. Where is Colombia Today?

4. Where is Colombia today?
From Democratic Security to Democratic
Prosperity
Ten years ago Colombia was a fragile state…
The Colombian Paradox: a long and stable democracy in a permanent
threat from terrorist groups, drug dealers and organized crime…
Security
28.837 homicides
28882 kidnappings
69 homicides per 100.000 habitants
1645 terrorist attacks
350 mayors out of their
municipalities
158 municipalities without police
Economy
Average Economic Growth 1994-
2001: 2.1%
GDP per Capita: US$2377
Investment as % of GDP: 16.5%
Exports: US$11.975 million
FDI: US$2.100 million
Inflation: 6.99%
Fiscal balance: -3.2%
Social
Unemployment: 16.2%
Health Coverage: 25 million
Colombians.
Pension affiliates: 4.5 million
Poverty: 57%
Education Coverage: Primary 97%,
High school: 57%, University: 24%.
Mobil Phone Lines: 4.6 million
Internet coverage: 1.9 million

5. 1. From Democratic
Security to Democratic
Prosperity
Building Confidence became our priority
Colombia faced a Confidence Deficit
The elusive quest for peace
Many governments exhausted
all their political capital
attempting to reach peace
through political dialogue…the
result was military
strengthening from illegal
armed groups and a rapid
growth in their criminal
activities (68% thought the
country was going in a
negative track)
Terrorist Groups (Guerrillas
and Paramilitaries) had
created a sense of defeat in
the Colombian people
Fear impacted in the
Colombian people Mindset
The lack of investment
The drain of human capital
The sense of danger in
Colombian roads
The expansion of massive
kidnappings created an
emotional domino effect

6. 1. From Democratic
Security to Democratic
Prosperity
Our vision was to build a Comunitary State:
 CONFIDENCE was our main goal
 Without Confidence:
• No investment
• Unemployment
• Lack of opportunities
• Brain Drain (Young people wanted to leave
without a return ticket)
 Three main Policies:
 Democratic Security
 Investment with fraternity
 Social cohesion
 For the First Time a National Development Agenda had Security as a driver of Development
(Security = Investment = Social Cohesion)
 No more a debate between left and right

7. The strategy was clearly oriented towards results in each of the main policy pillars
Democratic
Security
Security for All
Fight all forms of crime
Security without Martial Law
Security with liberties and Human
Rights
Victims recognition
1. From Democratic
Security to Democratic
Prosperity
Investment
with Social
Responsibility
Investor Security (Human, Legal and
Political)
Sound Macroeconomics
Incentives
Access to markets
Competitiveness Factors
(Infrastructure, Connectivity,
Banking,)
Social
Cohesion
Education Revolution
Health with coverage and
quality
Access to credit (Banca de
oportunidades)
Vocational Training
Conditional Cash Transfers

8. 1. From Democratic
Security to Democratic
Prosperity
The combination of our Policies produced significant results: Lowest violence levels in
two decades, highest levels of social coverage in Colombian History and highest levels
Security Economy
Indicator 2002 2010
Homicides 28838 7400
Kidnappings 2882 123
Homicides per
100K Habitants
69 16.3
Terrorist attacks 1645 250
Municipalities
without mayors
presence
350 0
Municipalities
without police
158 0
Indicator 2002 2010
Average
Economic
Growth
2.1% 4.3%
GDP per
Capita
2377 5300
Invest % GDP 16.5% 24.6%
Exports US$11.
000
US$
39.000
FDI US$2.1
00
US$ 5.000
Inflation 6.9% 2.5%
Social
Indicator 2002 2010
Unemployment 16.2% 11.6%
Health
Coverage
25.1 million 43.1
million
Pension
affiliates
4.5 million 7.1
million
Poverty 53% 43%
Education
coverage (Primary,
Hs, University)
97%
57%
24%
100%
79.4%
35.5%
Mobile phone
users
4.6 million
lines
41
million
lines
of Exports and FDI in more than 5 decades

9. 1. From Democratic Security to
Democratic Prosperity
Historical country conditions were crucial to achieve results…
Democratic
Tradition
Country
Conditions
Matter
Colombia
Professional
Armed
Forces
Vibrant
Private
Sector
Rule of law
Active and
courageous
middle class

10. 2. The current challenges
Colombia has improved significantly and it must face new challenges
Security
Maintain Macro-Vision and
Micro-Management
Continue dismantling all
terrorist organizations
Continue dismantling drug
cartels apparatus.
Strengthen Citizen Security
agendas with local
authorities
Economic
Face new trends of
currency appreciation
Maintain and increase FDI
flows (Security, incentives
and stability rules)
Fiscal Policy to face new
countercyclical challenges
Increase tax collections
Expand new trade markets
through FTA’s
Social
Cohesion
Fight labor informality and
create quality jobs
Insure education and health
quality
Expand vocational training
coverage
Create Entrepreneurial
Family Transfers program
Political
Judicial reform
Strengthen Democratic Center
Improve local institutional
capacity
New law implementation
(Victims and land)
Prevent the emergence of
populist movements

11. Colombia is an attractive investment destination due to multiple reasons
Structural
Elements
Political Stability
Sound Macroeconomic
Management
Human, Political and Legal
Security
2. The current challenges
Competitive
elements
Investment incentives
Access to markets (Canada, EU,
EEUU, MERCOSUR, etc)
Free Trade Zones
Logistical advantages
Comparative
elements
Investment Grade
Stable institutions
Growing internal
demand
Complementary
Human Capital
New World Class
Sectors incentives.
Strong financial
system

12. 2. The current challenges
In 2002 it was believed that
by 2009 Colombia oil
production will not be able
to attend national demand
In 2003 the oil and gas
sector restructuring was
designed
ECOPETROL undertook a
strategy shift to become a
more competitive and
professional corporation
The National Hydrocarbon
Agency was created
The case of the oil sector in Colombia: Change is possible
From 2002 to 2010
successful exploration
passed from 40% to 61.4%
Between 2002 and May
2010 447 new fields were
explored
In 2007 ECOPETROL was
capitalized by 10% through
local capital markets.
486.000 Colombians
bought shares
Between 2002 and 2010
341 exploration and
production contracts were
signed
Seismic exploration in the
country (Onshore, Offshore
and 2 dimensions)
increased by more than
250%
Colombia is currently close
to produce 1 million oil
barrels per day
Success triggers
Security: Investment,
exploration
Government Reform: New
ECOPETROL and ANH
Investment target policies:
New players and new
exploration and production
contracts

13. 2. The current challenges
Economic Fundamentals keep strengthening…
Indicator 2007 2008 2009 2010 pr 2011 pr
Nominal GDP in US$ Millions 213.957 214.405 248.793 280.488 339.449
Per capita GDP 4986 4899 5573 6160 7309
Inflation
(IPC Dic-Dic)
5.7 7.7 2.0 2.6 3.2
Interest Rates(Banrep) 9.5 9.5 3.5 3.0 4.5
Interest Rate Fix Deposit Rate (90 days) 9.0 10.1 4.0 3.5 5.0
Consumption interest rate 24.9 25.5 20.5 17.0 18.0
Preferential Interest Rate 14.1 15.6 7.5 7.3 7.5
Currency Exchange 2.015 2.244 2.044 1,950 1.750
Currency devaluation % -10.0 11.4 -8.9 -4.6 -10.3
Trade Balance US$ millions -824 470 -45 100 2300
Exports US$ mill FOB 29.991 37.626 32.853 39.400 45.300
Imports US$ mill FOB 30.816 37.155 32.898 39.300 43.000
Current Account US$ mill -5.819 -6.857 -5.146 -5.963 -6.600
Current account as a % PIB -2.7 -3.2 -2.1 -2.2 -1.9
International Reserves US Mill 20.601 23.660 24.983 28.500 30.300
Fiscal Deficit %PIB (FMI) -0.8 -0.1 -1.8 -3.2 -3.6
Urban Unemployment% 10.2 10.9 12.3 11.1 10.0

14. The Regional Picture

15. 1. Opportunities,
challenges and risks
The regional silent evolution
 Commentators and analysts continuously talk about Chinas
transformation and praise its effort for becoming the World second
largest economy and by being able to allow 400 million people come out
from the poverty trap
 However in our region a silent process of change has also occurred and
today Latin America is an active contributor to the Emerging Nations
Century:
 In the last three decades Latin America has increased its population by
240 million people and today counts with almost 600 million habitants
 Our average age variates between 26 and 28 years while Asia’s average
is closet to 34 years
 64% of our population is part of an expanding middle class
 Our per capita GDP in purchasing power is close to ten thousand
dollars while in the rest of emerging economies is close to six
thousand dollars
 During the last decade 40 million people have left the poverty line

16. Between 1980 and 2010 we have experienced an outstanding improvement
of our social indicators in what can be called a social transformation:
 Life expectancy has increased from 65 to 75 years
 Child mortality has been reduced by 50 per cent
 Literacy rates are above 94%
 Mobile phone penetration has increased by 78 per cent
 Internet access has increased by 33%
 Healthcare coverage has increased by 50 percent
 And water and sanitation coverage has reached on average 80 per cent
in the region
1. Opportunities,
challenges and risks

17. Latin America is also a land of opportunities
 Latin America is a region with a vast number of natural resources that
will help the World attend great part of the demand patterns.
 We count with:
 10 percent of the World oil reserves
 6 percent of the World Gas reserves
 Almost 50 percent of the World cooper reserves
 50 per cent of the World silver reserves
 13% of the World iron reserves
 26% of the World fertile land
 24% of the World beef supply
 Almost 50% of the World potable water supply
 Approximately 20 per cent of the World Biodiversity is
concentrated in the Amazon ring

1. Opportunities,
challenges and risks

18. 1. Opportunities,
challenges and risks
The SECRET BEHIND Latin American Success
 This change process is a consequence of the principles that a group of countries have adopted as their
policy cornerstone. Brazil, Mexico, Colombia, Chile, Peru and Uruguay represent 70 per cent of the
region’s population and 75% of the regional GDP.
 This group of countries have common characteristics that explain their outstanding performance:
1. The strengthening of Liberal Democracy
2. The adoption of an institutional Framework in favor of foreign and national investment
3. The construction of a sound and sustainable social safety net
4. The expansion of export markets and the commercial integration with the World (FTA’s)
5. A public administration driven by results
6. A sound Macroeconomic Administration driven by fiscal and monetary prudence
7. Better regulatory environment
8. Construction of strategic infrastructure
9. The consolidation of an innovation agenda leaded by an improvement in education
10.A well capitalized financial sector and the constant expansion of financial services
 Today countries like Panama, Dominican Republic, Costa Rica, Salvador, Guatemala, Honduras,
Belize, Paraguay, as well as most of the Caribbean States, are following that line of behavior

19. Building Modern
Democracies
(5 parameters)
Security
Freedoms and Private
Initiative
Independent Institutions
Social Cohesion
People Participation
A dynamic
Economic
transformation
Investment Target
Policies
Maintaining Fiscal and
Monetary transformation
Integrate commodity and
knowledge based
economies.
Expand export markets
Create an
Entrepreneurship culture
(Innovation agenda)
Closing Social
Gaps
Improve education
(quality, coverage,
vocational)
Insure Universal
Healthcare
Formal Job creation
Access to Finance
Climate Change,
Environment
and Energy
Sustainability
Expand renewable
sources
Install an energy
efficiency conscience
Improve waste
management
Protect the Amazon Ring
Reduce Co2 Emissions
1. Opportunities,
challenges and risks
Challenges

20. Economic
Risks
More Sovereign Debt
restructuring in Europe
Higher inflation in Emerging
Markets and exploding
bubbles
Real State Bubbles in China
Rapid Expansion of
commodity Prices
Currency volatility
Geopolitical
Risks
Terrorism
Illicit Trade (Drugs, arms,
counterfeiting, organs,
persons)
Organized Crime (Central
America, Mexico, Colombia,
Brazil, etc)
Lagging Democracies and
fragile States (Venezuela,
Haiti,Bolivia, Cuba)
Nuclear weapons
Environmental
Risks
Earthquakes and Tsunamis
Flooding
Deforestation and
Biodiversity Loss
Climate Change
Social Risks
Demographic Challenges
Food Security
Massive Migration
Infectious Diseases
Economic Inequality
1. Opportunities,
challenges and risks
Risks

21. 2. The future is now: The
emerging markets as engines of
growth
A new historical dynamic
Emerging
economies
have become
engines of
economic
growth
Since 1980
the world
population
has increased
by 2.500
million
people. 95%
of that
expansion
has taken
place in the
developing
world
In 1980
developing
economies
represented
33% of the
world
GDP…today
the represent
46%
By 2025 8
countries
(India, China,
Brazil,
Russia,
Indonesia,
Korea,
Mexico and
Turkey) will
be
responsible
for the largest
share in
world
economic
growth
By 2030
emerging
economies
will represent
68% of the
world
economic
growth
By 2050 19 of
the 30 largest
economies
will be
countries
known today
as emerging
markets
By 2050
China and
India will be
the first and
third worlds
largest
economies

22. 2. The future is now: The
emerging markets as engines of
growth
New trends will take place
Trade: in
1980 global
exports
were one
sixth of the
world GDP.
By 2030
they will be
one third
By 2025
urban
middle
class will
represent
40% of the
world
population
By 2030
food
demand
will
increase by
50%
By 2030
water
demand
will
increase by
35%
By 2030
energy
demand
will
increase by
40%

23. The most important Emerging Markets Description
País PIB, precios corrientes US$ PIB per capita, precios
corrientes US$
Población Millones Territorio Millones de KM2
Argentina 370.269 9.138 40.159 2.767
Brasil 2.090.31 10.816 193.253 8.512
Chile 203.232 11.827 17.19 0.757
Colombia 285.511 6.273 45.512 1.42
México 1.039.12 9.566 108.267 1.973
Perú 152.83 5.171 29.5 1.285
Venezuela 290.0678 9.960 29.183 0.912
China 5.878.26 4.382 1.341.41 9.561
India 1.537.97 1.264 1.215.94 3.287
Indonesia 706.735 3.015 234.77 1.904
Malasia 237.959 8.423 28.251 0.333
Tailandia 318.85 4.991 63.878 0.513
Filipinas 188.719 2.007 94.0 0.300
Corea del Sur 1.007.08 20.590 48.9 0.09
Rusia 1.465.08 10.437 140.367 17.075
Polonia 468.539 12.300 38.0 0.313
Hungría 128.96 12.879 10.013 0.09
República Checa 192.152 18.288 10.5 0.07
Turquía 741.853 10.398 71.341 0.779
Egipto 218.466 2.788 78.336 1.000
Suráfrica 357.259 7.157 49.912 1.226
EAU 301.88 59.716 5.0 0.08
Marruecos 103.482 3.248 31.8 0.447
Nigeria 216.803 1.389 156.051 0.924
Vietnam 103.574 1.173 88.257 0.331

24. 2. The future is now: The
emerging markets as engines of
growth
Latin America most vibrant emerging economies have consolidated the right
fundamentals to succeed in a world of new patterns…
Natural Resources
Growing
Entrepreneurial spirit
Human Capital
Democratic values
Sound Economic
Management

25. 2. The future is now: The
emerging markets as engines of
growth
Colombia has the elements to become the region third largest economy,
attracting long term investment and expanding trade markets for the future…
Natural resources
Entrepreneurial spirit
Increasing Middle class
Independent Institutions
Political Stability
Rule of law
Security

26. Canada’s role in the Americas

27. Canada’s contribution for the region
Canada
in the
Americas
Boost investment in
strategic sectors
Become a
consolidated market
for the region
largest economies
Promote
Democratic values
Contribute in the
strengthening of the
Inter-American
System
Attract Human
Capital for
specialized training
(Scholarships and
temporary work
opportunities)
Transfer knowledge
in world class
sectors
Provide incentives
for regional
corporations to be
listed in the
Canadian Capital
Markets

28. Colombia and Canada
Canada has become a key player in Colombia and the bilateral relation will
continue to improve ….
General
Canada is the world second largest Country
with a smaller population than Colombia
Canada has FTA’s with Mexico, Costa Rica,
Panama, Peru, Chile and Colombia
68% of the Canadian Economy is based in
the provision of services, while 29% is
based in aggregated value manufacturing.
Agriculture only represents 2.5% of the
Economy
Investment
Canada is the world 9th largest FDI
provider
Canada is the second largest FDI
provider in Latin America with 15.7%
of regional FDI
Colombia is the 14th largest Green
field Canadian investment
destination in the world
FDI
Canada is the 8th largest source of
FDI for Colombia
Mining, trade, furniture and
agriculture have concentrated 92%
of Canadian FDI in Colombia during
the last 3 years

29. Canada and Colombia Success Stories
Greystar • Mining
Medoro • Mining
McCain • Food Industry
SYNERGEX • Logistics and Software
PSP Investments • Private equity investments
Kruger • Forestry
Talisman Energy • Oils and Gas
Petrolifera Petroleum • Oil and Gas

30. www.alvarouribevelez.com