Download to read offline
Uploaded byAlvaro Uribe V.
Colombia and latin america - The next challenges
The document discusses Colombia's progress over the past decade and challenges ahead. It summarizes that Colombia has transitioned from a fragile state plagued by violence and poverty to a stable democracy and growing economy through policies promoting security, investment, and social cohesion. Key results include significantly reduced homicide and kidnapping rates as well as increased economic growth, exports, social services, and living standards. However, challenges remain regarding security, the economy, social issues, and regional risks like crime and environmental threats. The future looks promising if countries continue strengthening democratic institutions, economic growth, social development, and addressing risks.
More Related Content
Similar to Colombia and latin america - The next challenges
More from Alvaro Uribe V.
Colombia and latin america - The next challenges
- 1. Colombia and LatinAmerica The challenges ahead ÁlvaroUribeVélez Toronto, Canada September 2011
- 2. Issues to becovered 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 ColombiaToday?
- 4. Where is Colombiatoday? 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 wasclearly 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 DemocraticSecurity 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 currentchallenges 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 anattractive 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 currentchallenges 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 currentchallenges 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.
- 15. 1. Opportunities, challengesand 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 and2010 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 isalso 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, challengesand 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 MoreSovereign 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 futureis 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 futureis 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 importantEmerging 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 futureis 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 futureis 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 inthe Americas
- 27. Canada’s contribution forthe 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 ColombiaSuccess 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.