Bogota Colombia; Capital Showcases a Progressive Thinking Government, Diverse Investment Opportunities and Ambitious Infrastructure Plans to Accommodate a Growing City

 

“We run this economy with the main objective of making sure the business sector has an adequate environment to operate”- Finance Minister Mauricio Cardenas

 

Point Roberts WA, NEW YORK, NY – July 24, 2015 - Investorideas.com, a global news source covering leading sectors including Latin America releases the second in a series of articles following a recent trip to Colombia hosted by  PROCOLOMBIA, the government’s promotion agency. The trip was a fast-paced four-day tour of some of Colombia’s largest cities including Bogota, Medellin, Barranquilla and Cartagena.

 

The day in Bogota included a meeting with PROCOLOMBIA’s Juan Carlos Gonzalez, Investment Promotion V.P, *interviews at the Ministry of Finance with Mauricio Cardenas Santamaria, Minister of Finance and Public Credit,  **Milena Lopez Rocha, Director General de Credito Publico y Tesoro Nacional Republica de Colombia and presentations from Invest in Bogota.  

 

Read the full release at http://www.investorideas.com/news/2015/main/07242.asp

 

Finance Minister Mauricio Cardenas was preparing to introduce his budget plan the following day that included austerity measures influenced by falling oil prices. With Ministers waiting outside the door, he shared insight on Colombia’s present position and its future.

 

In an interview he told us, *“We run this economy with the main objective of making sure the business sector has an adequate environment to operate. Of all the indicators that we have had in the past few years, the one that reflects that emphasis is the “Doing Business Report”, where we now rank number one in Latin America. This means we run this economy with a deliberate effort to make sure the business sector has incentive and is encouraged to invest.”

 

“How do we do that?  We are the opposite of fiscal populism, we avoid large deficits, large public debt. We want to keep an economy with moderate, very fiscal deficit, very responsible fiscal policies and very tight discipline.”

 

“How do we do that? We have a Fiscal R Rule that is a strait-jacket that forces us to have a low deficit and to reduce that deficit and to reduce that deficit year-after-year.  We follow that rule very strictly. That means whenever it is necessary, when there is a loss in revenues like we are having now with declining oil prices, we have to cut the budget.”

 

“But we think that sends the right signal to markets. It sends the signal of confidence and credibility in our micro-economic frame.”

 

Milena Lopez Rocha, Director General de Credito Publico y Tesoro Nacional Republica de Colombia explains the Fiscal Rule (see video) and how the Government is dealing with decrease in revenue from falling oil prices.

 

She told us, “Fiscal Rule is legislation by which there is a limit to the fiscal deficit that the country can incur at any given point in time. It basically has three components. The first one is structural fiscal deficit which is around 2.2%. It is the fiscal deficit the country is allowed to have when the economy is operating at full capacity. There is an incremental margin that it can increase if economic growth is below its potential rate, which is called the economic cycle. The third is the energy cycle which allows an increase in deficit in order to absorb the shock from oil prices.”

 

*Video: Finance Minister Mauricio Cardenas:

https://www.youtube.com/watch?v=8dwsmChflkI

 

**Video: Milena Lopez Rocha, Director General de Credito Publico y Tesoro Nacional Republica de Colombia explains Fiscal Rule.

https://www.youtube.com/watch?v=hYu2936MOyU

 

PROCOLOMBIA’s Juan Carlos Gonzalez, Investment Promotion V.P shared  insight into Colombia’s Free Trade Zone incentives including the ability to sell to Colombia and export from Colombia with an attractive 15% corporate tax rate. “There is no difference with Colombian companies or foreign companies operating out of Free Trade Zones to either sell to the local market or to export”, he said.

 

He also noted, “You can find a Free Trade Zone almost anywhere in the Country.”

 

He explained what is key about Colombia is its ability to “manage and solve problems.”

 

When asked if they look to other countries as models he told us, “We look at Chile as to what they did in the health sector and with pension funds. We also use Spain’s handling of infrastructure and telecom as a good example.”

 

Invest in Bogota, a public-private partnership between Bogota’s Chamber of Commerce and the city’s Government told us in a meeting that Bogota has the “best business environment in Latin America.” Bogota represents 16% of the population of Colombia and 24% of its GDP.  Juan Carlos Jimenez and Carolina Hernandez gave us a compelling presentation of why companies should consider establishing a base and/or invest in Bogota.

 

Some of its claims to fame; it has an urban/rural ecosystem that is working together, the largest music festival in the world, the most important consumer market in Colombia, 100,000 students graduating annually,  friendly business environments and access to banks, legal, airlines and a metro population of over 10 Million people. 

 

The city is also very pro-environment with a large allotment of parks and green spaces and a plan to roll-out green/electric taxis and cars. We were told, “The Mayor wants Bogota to become a hub for hybrid/electric manufacturing and assembly.”

 

The city is also betting big on infrastructure saying, “infrastructure development will make the economy grow into the future.”

 

The day in Bogota left us with an impression of entrepreneurial optimism blended with a very practical and responsible fiscal approach; a recipe for success.  And speaking of recipes; Colombian food is fantastic. Lunch at Casa Vieja restaurant with suggestions from PROCOLOMBIA’s Juan Pablo Gaviria was just perfection.

 

About PROCOLOMBIA:        

PROCOLOMBIA is the government promotion agency in charge of promoting trade, investment, tourism and country brand. For more information, please visit www.procolombia.co.

 

Recent interview with ProColombia's President Maria Claudia Lacouture:

http://www.investorideas.com/news/2015/main/06291.asp

 

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