Colombia: realising its potential post-Covid
By World Healthcare Journal-
Colombia featured in the second Central America edition of the World Economic Series, Rebooting the World Economy. The Colombian Ambassador in London, His Excellency Antonio José Ardila, and President of ProColombia Dr Flavia Santoro Trujillo were invited to speak by the Chair, Rt Hon Stephen Dorrell of Public Policy Projects (PPP), which hosted the event in conjunction with Diplomat magazine.
The World Economic Series examines how the global community is reinvigorating itself following the initial shock of the pandemic. HE Antonio José Ardila confirmed that, like most countries, Colombia was not equipped to deal with an unexpected pandemic, but the government reacted swiftly and imposed a mandatory quarantine on 17 March that has only recently been lifted.
As a result, the economic consequences have been enormous. Colombia’s two largest airlines filed for bankruptcy as the result of the border closures, whilst the resulting recession has been the deepest for a century, and unemployment has been rising. Life is slowly returning to normal since the country began to reopen on 1 September but the consequences are enormous.
“I would like to highlight the professionalism, sacrifice and dedication of the thousands of doctors and nurses and practitioners who, at great expense, risking their own lives, have continued to lead the country's response to the pandemic,” said Sr Ardila. “But all their effort would be lost had it not been for the government's speedy response to increase hospital infrastructure. ”
Rebuilding the economy
The Colombian government has committed to a new programme that brings together the public and private sector to boost social welfare and economic recovery. Costing 26 billion dollars, or around 10 per cent of GDP, it will be financed by the public and private sectors, with 60 per cent paid by the public sector and 40 per cent by the private sector. “According to the International Monetary Fund (IMF), our country has been one that has invested the most in the region as a percentage of GDP towards measures to mitigate the effects of a pandemic,” said Sr Ardila.
Colombia’s reliance on oil has fuelled one of the strongest economic growths in Latin America but, as reserves run out, the government is creating new strategies to reinvigorate the economy. The plan has four main pillars: job creation, clean growth through renewable energy, the emergency basic income programme, and a commitment to rural areas and populations.
The first aim is to create one million jobs due to the acceleration of critical infrastructure projects, including ports, airports and roads. There is also a programme to support digital industries, including the training of 100,000 programmers to boost entrepreneurship, so digital transformation can boost economic growth across all sectors in both the public and private sectors.
The second goal is to speed up 27 strategic renewable energy and transmission projects, as well as supporting sustainable mining through the modernisation of the legal framework to battle illegal mining. The aim is to move away from the hydro schemes of the recent past which are being affected by climate change, and to focus on wind power to generate 13 per cent of energy by 2022.
Thirdly, the government is committed to continuing to support the poorest and most vulnerable populations, which have been the most affected by Covid-19. One of the most complicated challenges to overcome is the fact that one in every two workers in Colombia belongs to the casual sector and therefore is hard for government institutions to reach. According to the Ambassador, for this group staying at home is not a possibility and they have been supported by the emergency basic income programme.
Set up in record time to reach more than three million Colombians who have never received any support from the government, this programme has been a resounding success and one that will be extended until June 2021. In addition, more than 200,000 subsidies will be provided for social housing and 100,000 for middle-income housing projects.
The final objective is a commitment to rural areas. Support for farmers will continue by increasing their access to credit and other incentives. A fundamental element of the programme is the rolling out of a multi-purpose land register which will transform land titling in Colombia. In addition, the investment of 500m dollars for tertiary roads will help thousands of farmers reach markets with their products.
“Covid-19 has had a major impact on the global economy, and growth in Colombia is no exception,” Sr Ardila said. “During the second quarter of 2020, Colombian GDP decreased by 50.7 per cent compared with the same period in 2019. However, the IMF and the Global and World Banks forecast that the Colombian economy will present one of the smallest contractions in 2020, both in Latin America and around the world, projected to be around 4.9 per cent.
“They estimate growth of the Colombian economy in 2021 to be around 3.6 to 4 per cent. This is some positive news in this very difficult year. So, in the middle of one of the worst situations humanity has ever lived through, the Colombian government continues to fulfil its commitment to improve livelihoods and continue to grow the economy so all our citizens can share in the benefits. ”
Foreign direct investment
Dr Flavia Santoro Trujillo is the President of ProColombia, a government agency promoting non-traditional exports, tourism and foreign direct investment into Colombia. She spoke of her belief that Colombia is a unique country that enjoys the solid foundations to become a regional leader in terms of foreign direct investment.
With political and economic stability, strategic geographic location, a skilled workforce, a strong innovation ecosystem and a dynamic and growing economy, Colombia receives favourable ratings from the three most important rating agencies in the world.
“Our country is the third-largest recipient of foreign investment in Latin America and now the opportunity to invest in Colombia has never been greater,” she said. “We are becoming a regional leader when it comes to technology and innovation and we are striving to become Latin America’s Silicon Valley. ”
According to Dr Santoro, Colombia has signed and enacted important commercial agreements that enable it to reach more than 1.6 billion consumers in the Americas, Europe and Asia. “We are in the middle of the continent which allows us to access several ports in short time periods at a relatively low cost,” she said.
From August 2018 to August 2020 government policy has contributed to 395 investment projects worth 50.4 billion dollars, estimated to have generated around 143,000 new jobs.
“As a world-class provider of non-mineral goods and services, we fostered the use of current trade agreements and the facilitation of trade to take over strategic and new markets,” she explained. “In 2019, agribusiness and service exports sectors reached sales worth around 7.3 billion dollars and 10 billion dollars respectively. ”
The programme offers strategic support for foreign investors with a comprehensive package of institutional, legal and financial advice centring around 709 opportunities with 71 potential investment projects.
With the support of the International Development Bank, ProColombia aims to be a single point of institutional contact for foreign investors. There is a particular focus on the export of knowledge-based services, the promotion of e-commerce as a key distribution channel for Colombian exporters, and the development of new business opportunities.
Colombia is well aware of the immense potential of the country and its world-beating destinations. “The Colombian government has defined the tourism industry as Colombia's new petroleum,” says Dr Santoro. “We are working towards this objective by promoting Colombia as a safe, reliable, sustainable and high-quality destination.
“In this sense, we're interested in attracting tourism that benefits not only travellers but also travel companies, the environment and of course, the communities. Colombia certainly has the potential to accomplish this ambitious goal. We have an amazing natural environment as we are the second most biodiverse country in the world. ”
The initial measures to boost tourism are the reduction of sales tax on tickets to Colombia by 85 per cent. International air connectivity has now resumed and the first flights linked Colombia to Fort Lauderdale and Miami in the US, as well as Mexico, Brazil, Ecuador and the Dominican Republic.
The government wants to send a clear signal that the reactivation of the international tourism industry is under way. It is reinforcing this message with a tourism biosecurity certification for Covid-19 to allow tourists to travel throughout the country with confidence.
“I would like to finish with a final message that we really remain optimistic about the future,” said Dr Santoro. “Colombia is a success story. And we want the world to be part of it. We keep moving forward with confidence. ”
About the World Economic Series
The Chancellor’s Global Message was the most recent session of the World Economic Series. Launched in June 2020, The Rt Hon The Lord Mayor of The City of London, Her Majesty’s Marshal of The Diplomatic Corps and UN Under-Secretary-General Inger Andersen opened the virtual series as keynote speakers. Together they emphasised the importance of the World Economic Series as a digital forum that is hosting an international discussion about the policy framework required by the changed circumstances created by the health pandemic. Since then, speakers have included the Ambassadors of Japan, the EU and Thailand, Colombia and the Deputy Director-General of the World Health Organization.
For any questions on the World Economic Series, please contact:
Venetia van Kuffeler, Editor, Diplomat magazine
Max Austin, Policy Director, Public Policy Projects E: email@example.com
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