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OECD ECONOMIC SURVEY
OF COLOMBIA 2017
Boosting inclusive growth
25 May 2017, Bogota
@OECDeconomy
@OECD
www.oecd.org/eco/su...
Main findings
 The economy has been resilient to the fall in commodity prices
 Raising productivity and making growth mo...
Living standards have improved
Source: World Bank, World Development Indicators database.
Poverty has declined
Source: DANE, Encuesta Continua de Hogares (2002-2005) y Gran Encuesta Integrada de Hogares
(2008-201...
Growth has been robust
Source: OECD Productivity Statistics database.
The shock to the terms of trade was large
95
100
105
110
115
120
125
130
135
140
95
100
105
110
115
120
125
130
135
140
Q1...
The peso depreciated significantly
Source: Banco de la República.
Inflation is coming down
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
2011 2012 2013 2014 2015 2016 2017
Y-o-y % changesY...
The tax reform is a step in the right direction but
more revenue is needed
0
5
10
15
20
25
30
35
40
0
5
10
15
20
25
30
35
...
Key recommendations
Further improve macroeconomic resiliency
• Raise more revenue in the medium term.
• Approve the law aw...
Creating better quality jobs
Informality is high
0
10
20
30
40
50
60
70
80
90
CHL CHN BRA TUR CRI ZAF ARG COL MEX
% A. Employees
0
10
20
30
40
50
60
70...
Self-employment is widespread
0
5
10
15
20
25
30
35
40
45
50
55
0
5
10
15
20
25
30
35
40
45
50
55
SWE
NOR
USA
DNK
EST
CHE
...
Formal workers earn much higher wages
0
300
600
900
1200
1500
0
300
600
900
1200
1500
2008 2009 2010 2011 2012 2013
Thousa...
Tax reforms have helped the formal job creation
-5
0
5
10
15
-5
0
5
10
15
2008 2009 2010 2011 2012 2013 2014 2015 2016
Y-o...
The female employment to population ratio is
below the OECD average
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
7...
The gender gap is declining, but still high
15
20
25
30
35
40
45
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20...
Key recommendations to create better quality jobs
• Further reduce taxes and fees on wages (non-wage
labour costs).
• Simp...
Enhancing the quality of education is
key
Productivity is too low to support growth
0
20
40
60
80
0
20
40
60
80
OECD EU CHL MEX BRA COL CHN IND
%
%
GDP per person e...
Income inequality remains high
0
2
4
6
8
10
12
0
2
4
6
8
10
12
DNK
ISL
NOR
CZE
FIN
SVK
SVN
SWE
AUT
NLD
BEL
FRA
LUX
CHE
DEU...
Many students do not attain basic skills
300
350
400
450
500
550
600
300
350
400
450
500
550
600
SGP
JPN
EST
FIN
CAN
HGK
K...
Improving skills will boost growth
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
EST
KOR
FIN
JPN
POL
CAN...
Few students enrol in professional and
technical degrees
0
10
20
30
40
50
60
0
10
20
30
40
50
60
ZAF
BRA
COL
GBR
KOR
LAC
J...
Skill mismatches remain high
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
90
High School Dimploma or less Techni...
The education system could do more to
promote social mobility
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
30
35
40
45
5...
Key recommendations to enhance the quality and
outcomes of education
• Provide more public support to skills training in r...
Boosting infrastructure and
improving the business climate
Public investment has increased
2
3
4
5
2
3
4
5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014...
The quality of infrastructure needs to be
improved
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
FIN
BEL
ESP
DNK
NZL
USA
NOR
DEU
GBR
SWE...
Business regulation remains restrictive
0
1
2
3
4
5
6
0
1
2
3
4
5
6
ScopeofSOEs
Gov'tinvolvement
innetworksectors
Directco...
Regulation is restrictive in the electricity,
transport and railway sectors
0
1
2
3
4
5
6
0
1
2
3
4
5
6
AUS
CRI
BRA
CAN
IS...
The court system is slow to resolve
commercial disputes
0
200
400
600
800
1000
1200
1400
1600
0
200
400
600
800
1000
1200
...
Key recommendations to boost infrastructure
investment and improve the business framework
• Sustain the increase in public...
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorit...
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Colombia 2017 OECD Economic Survey Boosting Inclusive Growth

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Since 2000, the quality of life of Colombians has improved markedly. Macroeconomic and social policies have sustained strong GDP growth and reduced poverty.

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Colombia 2017 OECD Economic Survey Boosting Inclusive Growth

  1. 1. OECD ECONOMIC SURVEY OF COLOMBIA 2017 Boosting inclusive growth 25 May 2017, Bogota @OECDeconomy @OECD www.oecd.org/eco/surveys/economic-survey-colombia.htm
  2. 2. Main findings  The economy has been resilient to the fall in commodity prices  Raising productivity and making growth more inclusive are key to lifting living standards  A solid macroeconomic policy framework sustained growth  The landmark 2016 tax reform will boost investment and reduce the dependence on oil revenues  Reforms to strengthen the business environment and the quality of education, to reduce informality and increase women’s work opportunities would raise productivity and reduce income disparities
  3. 3. Living standards have improved Source: World Bank, World Development Indicators database.
  4. 4. Poverty has declined Source: DANE, Encuesta Continua de Hogares (2002-2005) y Gran Encuesta Integrada de Hogares (2008-2015).
  5. 5. Growth has been robust Source: OECD Productivity Statistics database.
  6. 6. The shock to the terms of trade was large 95 100 105 110 115 120 125 130 135 140 95 100 105 110 115 120 125 130 135 140 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Index, 2007=100Index, 2007=100 LAC-4 Colombia Note: LAC-4 refers to the unweighted average of values for Argentina, Brazil, Chile and Mexico. Series calculated as a 4-quarter centred moving average. Source: OECD Economics Department database.
  7. 7. The peso depreciated significantly Source: Banco de la República.
  8. 8. Inflation is coming down 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 2015 2016 2017 Y-o-y % changesY-o-y % changes Inflation target range Inflation Core Inflation Inflation expectations 12-months forward Source: OECD Economics Department database and Banco de la República.
  9. 9. The tax reform is a step in the right direction but more revenue is needed 0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 40 IRL LVA SVN CZE HUN POL EST FIN ISL TUR GBR CHE DNK SVK SWE CHL KOR AUT ISR NLD NOR ESP CAN NZL GRC LUX PRT JPN AUS MEX DEU ITA COL** BEL FRA USA COL* % % Statutory corporate income tax rates as of 2016 Note: *COL refers to 2017 and **COL refers to 2019. Source: OECD Tax database.
  10. 10. Key recommendations Further improve macroeconomic resiliency • Raise more revenue in the medium term. • Approve the law awarding the financial superintendence regulatory powers over holding companies of financial conglomerates.
  11. 11. Creating better quality jobs
  12. 12. Informality is high 0 10 20 30 40 50 60 70 80 90 CHL CHN BRA TUR CRI ZAF ARG COL MEX % A. Employees 0 10 20 30 40 50 60 70 80 90 CRI MEX ZAF COL ARG %B. Self-employed 2013 or latest available year Note: Informality among employees is defined as the share of employees not contributing to the pension system. Informality among self-employed is defined as the share of self-employed who did not register their business. Source: OECD (2016).
  13. 13. Self-employment is widespread 0 5 10 15 20 25 30 35 40 45 50 55 0 5 10 15 20 25 30 35 40 45 50 55 SWE NOR USA DNK EST CHE HUN LUX AUS DEU FRA JPN FIN ISL LVA ISR AUT SVK ESP GBR CZE NZL OECD CAN PRT BEL IRL NLD SVN POL KOR MEX ITA TUR GRC COL %% Self-employment as a percentage of total employment, 2015 Note: Self-employment is defined as the employment of employers, workers who work for themselves, members of producers' co-operatives, and unpaid family workers. Source: OECD Economic Department Database and DANE, GEIH.
  14. 14. Formal workers earn much higher wages 0 300 600 900 1200 1500 0 300 600 900 1200 1500 2008 2009 2010 2011 2012 2013 Thousands Formal workers Informal workers Average worker Gross earnings in thousands of Colombian pesos, 2008-13 Note: Formal workers are employees and self-employed people aged 15-64 who pay pension contributions. Source: OECD calculations based on GEIH of DANE.
  15. 15. Tax reforms have helped the formal job creation -5 0 5 10 15 -5 0 5 10 15 2008 2009 2010 2011 2012 2013 2014 2015 2016 Y-o-y % changesY-o-y % changes Job creation at national level, annual changes Abolition health care contribution employers Abolition payroll taxesFormalisation and Job Creation Law Informal Formal Note: Formal job creation is defined as the year-to-year change in the number of workers (including employees and self-employed) contributing to the pension system. Source: OECD calculation based on GEIH data sourced from DANE.
  16. 16. The female employment to population ratio is below the OECD average 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 ISL SWI SWE NOR DNK DEU CAN NLD NZL GBR EST FIN AUT AUS LTV JPN ISR USA CZE PRT SVN LUX FRA OECD BEL HUN IRL POL COL SVK KOR ESP CHL ITA MEX GRE TUR %% Employment to population ratio of women aged 15-64, 2015 Source: OECD Labour Force Statistics database.
  17. 17. The gender gap is declining, but still high 15 20 25 30 35 40 45 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 % points CHL MEX OECD COL Male minus female employment to population ratios, in percentage points Source: OECD Labour Force Statistics database.
  18. 18. Key recommendations to create better quality jobs • Further reduce taxes and fees on wages (non-wage labour costs). • Simplify procedures for company registration and the affiliation of workers to social security. • Ensure the provision of affordable, good-quality child care and affordable long-term care for elderly relatives or those with disabilities. • Expand access to and make greater use of active labour- market programmes.
  19. 19. Enhancing the quality of education is key
  20. 20. Productivity is too low to support growth 0 20 40 60 80 0 20 40 60 80 OECD EU CHL MEX BRA COL CHN IND % % GDP per person employed, as percentage of the US, constant 2010 PPPs, 2015 Source: OECD Productivity Statistics database.
  21. 21. Income inequality remains high 0 2 4 6 8 10 12 0 2 4 6 8 10 12 DNK ISL NOR CZE FIN SVK SVN SWE AUT NLD BEL FRA LUX CHE DEU HUN IRL POL GBR NZL AUS CAN ITA KOR PRT LVA GRC JPN ESP EST ISR TUR USA MEX CHL CRI COL P90/P10 ratio, 2014 or latest available year Note: The P90/P10 ratio is the ratio of income of the 10% of people with highest income to that of the poorest 10%. Source: OECD (2016), OECD Employment Outlook.
  22. 22. Many students do not attain basic skills 300 350 400 450 500 550 600 300 350 400 450 500 550 600 SGP JPN EST FIN CAN HGK KOR NZL SVN AUS GBR DEU NLD CHE IRL BEL DNK POL PRT NOR USA AUT FRA SWE OECD CZE ESP LVA LUX ITA HUN ARG ISL ISR SVK GRC CHL URU ROM TUR CRI COL MEX IDN Student performance in sciences Mean science score in PISA, 2015 Source: OECD, PISA 2015 Database.
  23. 23. Improving skills will boost growth 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 EST KOR FIN JPN POL CAN NLD CHE DEU IRL SVN AUS DNK GBR USA CZE AUT PRT BEL NOR ESP NZL OE… HUN ISL LUX SWE FRA ITA SVK GRC ROU ISR CHL TUR CRI MEX MNE URY ARG BRA COL PER % points% points Long-run growth increase Note: "Long-run growth increase" refers to increase in annual growth rate (in percentage points) once the whole labour force has reached higher level of educational achievement. Source: OECD (2015), Universal Basic Skills: What Countries Stand to Gain, OECD Publishing.
  24. 24. Few students enrol in professional and technical degrees 0 10 20 30 40 50 60 0 10 20 30 40 50 60 ZAF BRA COL GBR KOR LAC JPN ARG NZL THA OECD HUN IRL MEX CRI RUS GRC ESP IDN DEU ISR EST FRA CHN ISL CHL TUR PRT DNK SWE NOR LUX FIN SVK CHE AUS SVN ITA CZE BEL AUT NLD %% Percentage of students in secondary education enrolled in vocational programmes Percentage of students in tertiary education enrolled in technical programmes Source: UNESCO Institute for Statistics. Data for 2012.
  25. 25. Skill mismatches remain high 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 High School Dimploma or less Technical degree Bachelor's degree Graduate degree %% Composition of labour supply and demand by level of education in Colombia Supply Demand Source: Colombian Atlas of Economic Complexity (Lora, 2015).
  26. 26. The education system could do more to promote social mobility 0 5 10 15 20 25 30 35 40 45 50 0 5 10 15 20 25 30 35 40 45 50 JPN EST FIN KOR ESP CAN PRT GBR LVA SVN POL DEU AUS USA NLD NZL IRL OECD CHE DNK BEL FRA ITA NOR AUT CZE SWE TUR LUX HUN GRC SVK ISL ISR ARG CHL URY MEX COL CRI BRA PER %% Share of resilient students across OECD and LAC countries As a percentage of all students Note: A student is classified as resilient if he or she is in the bottom quarter of the PISA index of economic, social and cultural status in the country/economy of assessment and performs in the top quarter of students among all countries/economies, after accounting for socio-economic status. Source: OECD, PISA 2015 Database, Table I.6.7.
  27. 27. Key recommendations to enhance the quality and outcomes of education • Provide more public support to skills training in regions lagging behind. • Establish a national curriculum for school education and professionalise teachers’ careers. • Provide more public support to increase enrolment rates of disadvantaged children in less developed regions. • Expand early childhood education.
  28. 28. Boosting infrastructure and improving the business climate
  29. 29. Public investment has increased 2 3 4 5 2 3 4 5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 %% Colombia OECD Source: OECD Economics Department database.
  30. 30. The quality of infrastructure needs to be improved 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 FIN BEL ESP DNK NZL USA NOR DEU GBR SWE CAN PRT JPN KOR IRL LVA FRA OECD CHL LUX AUS SVN CHE ZAF GRC CHN ITA TUR AUS MEX CZE IND IDN POL HUN ISR COL SVK CRI BRA IndexIndex Ports Note: Index scale 1-7, from lowest to highest quality. Source: World Economic Forum (2015).
  31. 31. Business regulation remains restrictive 0 1 2 3 4 5 6 0 1 2 3 4 5 6 ScopeofSOEs Gov'tinvolvement innetworksectors Directcontrol Governance ofSOEs Involvementin businessoperation Pricecontrols Commandand controlregulation Licensesand permitssystem Comm.and simplification Admin.burdens forcorporations Admin.burdens forsolepropr.firms Barriersin servicessectors Legalbarriers toentry Antitrust exemptions Barriersin networksectors BarrierstoFDI Tariffbarriers Diff.treatment offoreignsuppl. Barriersto tradefacilitation IndexIndex OECD average Colombia State Control Barriers to entrepreneurship Barriers to trade and investment Product market restrictiveness, 2013 Note: Index scale 0-6, from least to most stringent. Source: OECD, Product Market Regulation Database.
  32. 32. Regulation is restrictive in the electricity, transport and railway sectors 0 1 2 3 4 5 6 0 1 2 3 4 5 6 AUS CRI BRA CAN ISR PER CHE ARG AUT DNK FIN DEU IRL JPN LUX MEX NZL NOR SVK SWE GBR OECD HUN BEL CZE EST ISL KOR NLD POL PRT SVN ESP CHL GRC COL FRA TUR ITA IndexIndex Road Note: Index scale 0-6, from least to most stringent. Source: OECD, Product Market Regulation Database.
  33. 33. The court system is slow to resolve commercial disputes 0 200 400 600 800 1000 1200 1400 1600 0 200 400 600 800 1000 1200 1400 1600 NZL KOR NOR RUS LUX SWE JPN FIN MEX CHE AUS FRA HUN AUT DNK ISL USA EST PER DEU GBR CHN LVA IDN CHL BEL ESP NLD OECD PRT CAN TUR ECU ARG PRY VEN CZE IRL POL PAN SVK URY BRA CRI ISR ITA SVN COL IND GRC DaysDays Time required to enforce a contract, 2014-15 Source: World Bank, Doing Business Database, 2015.
  34. 34. Key recommendations to boost infrastructure investment and improve the business framework • Sustain the increase in public investment. • Finance more infrastructure programmes on a regional basis. • Implement the road infrastructure program (4G) and guarantee that Private-Public-Partnerships continue to have proper cost-benefit analysis. • Remove regulations on public ownership and vertical integration in electricity, vertical integration and market structure in rail. • Introduce a court or a division of a court dedicated solely to commercial cases and facilitate case management through electronic case management tools.
  35. 35. Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Follow us on twitter: For more information www.oecd.org/eco/surveys/economic-survey-colombia.htm OECD Economics OECD

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