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Macroeconomic stability
In 2007 the consumer price index was 5.69 %, the highest since 2003, 1.69 points over the goal fixed for 2007 by the Board of directors of the Banco de la República (JDBR) that was between 3 % and 4 %. During the first months of 2008 , January to April this increasing trend has been averaging 5.12%.
According to the DANE increased inflation has been accompanied with an important increase in the Gross Domestic Product (PBI) of Colombia, which in 2007 increased 7.62 %. This adds Columbia to the list of the countries with major economic growth in Latin America.
The economic activity has affected consumers and investor confidence. Investor’s investments added to development and improvements in productivity. Essential to this increased growth were the low interest rates given in 2007 and the liquidity of Banco de la Republica. Among the external factors that contributed to the economic dynamism was constant and stable growth of the principal commercial associates of Colombia. Favorable terms of exchange and the increased flow of capital, principally from foreign direct investment (IED) had a significant impact. It is reasonable to assume this will continue into the future.
Surveys of companies and homes owners show high levels of confidence, which indicates the increase in private expenditure will continues throughout 2008. Private investment in the important machinery and equipment sector will translate into increased earnings in manufacturing. The reduction in unemployment, the real growth of the salaries and the expansion of credit will stimulate consumption.
Projections show that with this increase in production and consumption our involvement in the world economy will continue being favorable and we will see an increase in exports.
The supported growth of the Colombian economy in recent years has generated social benefits in terms of reduction of the unemployment and the poverty. In effect, in the last 5 years the rate of national unemployment has diminished to15.6 % in 2002 and 11.1 % in 2007. According to the Department National de Plantation (DNP), the proportion of the population who is below the line of poverty diminished from 54 % to 49 %.
In order to consolidate these advances, the principal challenge that the economic authorities face consists in guaranteeing a high and supported growth of the Colombian economy. To achieve it, it is important to identify the risks that might affect negatively the rate of economic growth. An economy that experienced the expansion as obtained in 2006 and 2007, that strengthened the economy and reduced its vulnerability may also experience new risks and its necessary for government recognize these changes and to capitalize on the opportunities.
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Political stability
All the presidents have been chosen democratically, with the exception of a short period (1953 - 1957) of military dictatorship.
According to the World Competitiveness Yearbook 2005, Colombia occupies the second place in consistency of her policies.
The current President of the Republic, Alvaro Uribe Vélez, has more than 70 % of popularity after 6 years of mandate. |
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Human Qualified and Competitive resource
The Colombian labor force is considered the best in the Andean Community and is one of most qualified in managerial and operative level of Latin America.
The rate of literacy of Colombia is one of the highest of Latin America.
The labor force of Colombia is competitive in terms of labor costs.
The salaries on the services sector and the payment per hour in the manufacturing sector are highly competitive, when it is compared with other countries.
In Colombia, particularly at the professional level, it is any discrimination against the woman.
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Labor Flexible regime
Colombia has one of the most flexible labor regimes of Latin America
A labor day goes from 6 a.m. until 10 p.m. For this reason, the employer can contract two shifts of work without pay overtime or night surcharges.
The modality of apprentices contracting of the National Service of Learning (SENA), throw a contract of rendering services and without labor entail (links) with the company.
Hereby the employer does not have the obligation to pay social security.
Amount of indemnifications for dismissal without just reason reduced. |
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Strategic location
Colombia is located strategically as intermediate point between North America and South America.
It has coasts in the Pacific and Atlantic Ocean and possesses a modern port infrastructure.
It has easy access to the North American, European, Asian and Latin-American market.
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Platform of Exportation and Access Favored to World Markets
Thanks to different agreements of free trade and tariff unilateral granted preferences, Colombia has access to a market of 1,200 million persons:
Agreements of Free Trade (Acuerdos de libre Comercio)
- TLC with The United States in process of ratification
- Andean Community of Nations - CAN (Colombia, Bolivia, Ecuador and Peru).
- G-3 (Colombia, México and Venezuela).
- CAN-MERCOSUR.
- Colombia - Chile.
- Colombia - CARICOM
- Tariff Preferences
- With The United States: ATPDEA.
With the European Union: Andean SGP |
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Special regimen of foreign commerce
- 10 Duty-free zones that offer exchange, fiscal and customs incentives.
- 5 economic special Zones of exportation that offer exchange, fiscal, customs and labor incentives.
- Incentives for highly exporting users
- Special systems of import – exportation.
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Multiple Growth points
Colombia has the third population of the region with more than 45 million inhabitants:
- 1 city of more than 7 million inhabitants.
- 3 cities of more than 2 million inhabitants.
- 4 cities of more than 500.000 inhabitants.
- 23 cities of more than 100.000 inhabitant.
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Physical infrastructure
Colombia has one of the highest percentages of coverage in public services in Latin America.
- It possesses a modern infrastructure of telecommunications.
- It has done increasing investments in infrastructure of transport.
- 6 maritime ports in the Caribbean and two in the Pacific Ocean
- 5 international airports
- 91 % of main national paved networks.
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Confidence of Foreign Investors
The Foreign Direct Investment has grown significantly during the last years, according to information of Proexport the IED for 2007 is placed about the US$9.000 million.
More than 1000 multinational companies have investments in Colombia.
Recently, other multinationals have given a vote of confidence in Colombia.
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