Improvement on Social Indicators
In addition to measuring the multidimensional poverty rate, the Colombian Government is now also measuring semiannually the monetary poverty rate (calculates those living below an absolute standard of what households should be able to count on to meet their basic needs. The GOC used a monthly income of less than COP 817,000 pesos – or about USD $ 408 for a family of four). For the period July 2012 – June 2013, the monetary poverty rate decreased to 32.2% from 32.9% the year before. For the period ending in June 2013 the extreme poverty rate reached 10.1%. The GOC also announced that the unemployment rate for August 2013 decreased to 9.3% from 9.7% in August 2012.
Colombia is the Second Biggest Flower Exporter
As a result of the implementation of the free trade agreements with the U.S., Canada and the European Union, Colombian flower exporters have been able to increase their exports. During the first semester of 2013, Colombian flowers exports totaled USD $740 million – a 9% increase over the same period of 2012. With these results Colombia consolidates itself as the world’s second biggest flower exporter with more of the 15% of the global flower market. President Santos stated this week, “We are the leading exporter of carnations and the second largest exporter of flowers in the world, surpassed only by the Netherlands”.
Colombian External Debt Totaled USD $ 83.8 billion
According to the Central Bank, Colombia’s external debt through June 2013 totaled USD $83.8 billion (USD $37.3 billion in private sector debt and USD $46.5 billion in public sector debt). This figure represents 21.6% of the country’s GDP, and a10% increase over external debt in June 2012.
Colombia to Start Accession Process for OECD
On September 19, OECD members approved the roadmap for Colombia’s accession to the organization. Technical committees will now undergo a formal review of Colombia’s efforts in areas such as health, education, environment, trade, investment, and the fight against corruption with the goal of bringing Colombia’s policies closer to OECD best practices, and make recommendations for improvements if needed. The Colombian government hopes to complete the accession process in about 3 years.
Economic Effect of the Peace Agreement
The Colombian National Planning Department (DNP) believes that if a peace agreement is signed between the Colombian government and the FARC, the Colombian economy will grow an additional 1-2% annually. The DNP is accounting for health coverage, reintegration costs, housing, and training in the planning of future national budgets.
Krispy Kreme to Enter Colombia
Following Starbucks’s recent announcement that it will open its first locations in Colombia in 2014, Krispy Kreme will follow suit. The doughnut company announced that as part of its first expansion move in Latin America, the chain will open 25 stores in the next five years. Krispy Kreme signed a franchise agreement with the Colombian company IRCC Ltda., the owners of the El Corral hamburger chain. Krispy Kreme expects to open its first stores in Bogota, Medellin, and Barranquilla.
Colombian Economy Grew 4.2% in Second Quarter 2013
The Colombian National Statistics Department (DANE) announced that GDP for the second quarter of 2013 grew 4.2% compared to 4.8% in the IIQ of 2012 and that for the first half of 2013 the GDP grew 3.4% compared to 5.3% for the first half of 2012. The sectors that grew the most during this quarter where: agriculture (7.6%), construction (6.4%), and utilities (4.7%). The quarterly growth was higher than expected by market analysts, who had predicted a growth of 3.3%.
New Secured Transactions Law
Colombia currently has more than 500,000 companies categorized as Small and Medium-Sized Enterprises (SMEs). Only 12% of SMEs have access to credit, however. The Colombian government issued Law 1676 in September 2013 in a move to support these enterprises by simplifying access to credit for SMEs and decreasing interest rates. The law complies with international standards. With this new law the SME’s can use as collateral: inventory, equipment, accounts receivable and intellectual property, which in the past were not accepted to guarantee credits.
Facebook to Open Office in Colombia
The company’s vice-president for Latin America, Alexandre Hohagen, announced that Facebook will open an office in Colombia in 2014. Colombia ranks 14 worldwide with 15 million Facebook users. The company will focus its operations in Colombia in generating sales and business for Small and Medium-Sized Enterprises and offering products and services to businesses to strengthen brand loyalty. Facebook already has offices in Brazil and Argentina.
For complete information please visit - http://bit.ly/1bu1Oci
Colombia Becoming Medical Tourism Destination
Colombia is becoming a prime destination for medical tourism. The country has 16 of the best 40 hospitals in the region, according to a ranking published by America Economia magazine. Colombia has respected doctors and facilities in the areas of eye surgery, dentistry, fertility, oncology, cardiology, neurology, and aesthetic orthopedic treatments. According to the Colombian Investment Promotion Agency (Proexport), in the last 5 years medical tourism has generated profits of more than US$ 140 million in Colombia. Proexport also noted that a patient from the United States can save up to 60% on some treatments in Colombia compared to the U.S. Colombia’s National Statistics Agency estimates that medical tourism has increased by 75% in the last two years.
National Agricultural Pact
After almost two months of strikes in various sectors, President Santos inaugurated a National Agricultural Pact on September 12 that aims to address the main problems affecting the country’s agricultural sector. As a first step in implementing the pact, President Santos issued seven decrees to formalize agreements reached with agricultural leaders. Agreements include the addition of 80 new staff positions at the Vice Ministry of Rural Development (Agricultural Ministry) and price controls for agricultural inputs such as fertilizers and pesticides. Of note, small agricultural associations that led the strikes did not participate in the inaugural event launching the National Agricultural Pact.
Starbucks to Enter Colombia
Starbucks, in partnership with the Mexican corporation Alsea, will initiate operations in Colombia in 2014. Starbucks will open 6 stores in Bogota next year and hopes to have 50 nationwide by 2018, at an estimated investment of US$ 25 million. Starbucks will work with USAID to invest US$ 3 million over three years in projects to improve the quality of life for 25,000 small farmers in the Colombian region of Nariño.
President Santos Appoints New Ministers
On September 5th, President Santos announced changes to his senior staff in response to ongoing national strikes and protests. In addition to newly appointed Ministers of Justice (Alfonso Gomez Mendez) and Interior (Aurelio Irragorri), there were several changes to portfolios on the economic side. Amylkar Acosta replaces Federico Rengifo as Minister of Mines and Energy; former Director of the National Environmental Licensing Agency (ANLA) Luz Helena Sarmiento replaces Juan Gabriel Uribe as the Minister of Environment and Sustainable Development; and Ruben D. Lizarralde replaces Francisco Estupinan as the new Minister of Agriculture and Rural Development.
Inflation for August 0.08%
For the first eight months of the year, accumulated inflation totaled 1.86%, about 0.17 points lower than the same period in 2012. According to this result, national strikes that took place in August seem to have had only marginal effects on overall inflation for the month. Food prices in August increased only 0.15%, according to the National Statistics Department.
Oil Production Continues to Increase
According to the Ministry of Mines and Energy, oil production for August reached an average of 1,031,000 barrels per day. This figure represents a 13.17% increase compared to average production in August 2012. The Ministry noted there were no disruptions to the operation of wells nationwide during August and highlighted there is extensive ongoing exploration in new wells.
Practical Manual for the Agricultural Sector
Producers, exporters or importers, the U.S. Agency for the International Development – USAID and Proexport, issued this manual in order to provide you with a conceptual and methodological tool for the application of the rules of origin for the Trade Promotion Agreement – APC, signed between Colombia and the United States of America.
The manual is illustrative and serves as a practical guide for the producer, exporter or importer, to determine the origin of goods and subsequently certifying their origin.
You can find the manual here – http://bit.ly/14KGRpf
Manual Practico (Sector Agricola) Reglas de Origen Estados Unidos – Colombia (http://bit.ly/14KGRpf)
World Bank’s Doing Business in Colombia Report
The World Bank, with support from USAID, issued its Doing Business in Colombia 2013 report. The report analyzed 23 cities in Colombia and ranked Manizales, Ibague, Bogota, Armenia, and Pereira as the top five cities with the most favorable business environments. Meanwhile, Cali, Barranquilla, and Palmira ranked as having the least business-friendly environments. Manizales maintained its first place ranking again this year due to the development of best practices that mirror those of developed economies. For example, it takes 11 days to register a property in Manizales, the same period of time as in South Korea and Denmark.
Ongoing national strikes have resulted in a shortage of basic food products in Colombia’s urban centers, leading to price increases and an expected rise in inflation. There has been a 50-150 percent increase in the price of staple goods at major food distribution centers in cities such as Bogota and Medellin, according to media reports. Increased food prices are expected to cause a rise in inflation for August. Numerous roads in several departments, including Boyacá, Cauca, Cundinamarca, Huila, Nariño and Putumayo, have been closed as a result of the strikes.
Pacific Alliance Progress
Colombian Ministers of Foreign Affairs and Commerce and their counterparts from Pacific Alliance member countries (Mexico, Chile, and Peru) concluded economic and commercial negotiations on August 26 in Cancun, Mexico. The final agreement establishes that 92% of goods included in the agreement will be tariff free immediately, and the remaining 8% of products will be duty free in the short and medium terms. After completing these negotiations to promote economic growth and competitiveness, the Alliance announced it will now prioritize strengthening relations with observer and third countries, especially those from the Asia-Pacific region.
Record Agricultural Exports Reflect Entry into Force of FTA
According to the U.S. Department of Agriculture, during the first semester of 2013, agricultural exports to Colombia totaled US$680 million – an increase of 81% compared with the same period of the previous year.
Industrial Production in June decreased 5.5%
According to the Colombian National Statistics Department, industrial production (excluding coffee threshing) fell 5.5% in June 2013. The sector showing the greater decrease was the automotive (- 52%).
President Santos Name New Colombian Ambassador in the U.S.
President Santos announced August 16 that he asked the president of the Colombian National Business Association (ANDI), Luis Carlos Villegas, to serve as the new Colombian Ambassador to the United States. Mr. Villegas has led the ANDI – the most powerful private sector association in the country – for 18 years.
A strike among various agricultural sectors, joined by some health care workers, truck drivers, teachers and others, has disrupted the country since August 19. There are currently more than 30 roadblocks in 11 departments.
For complete information please visit - http://bit.ly/13X0Gpx
National Strike on August 19
The national small coffee growers association will go on strike on August 19 despite the Colombian government’s efforts to avoid a national strike. The coffee growers association alleges the Government of Colombia has not complied with the agreement on subsidies and other benefits put in place in March after a previous 12-day strike. The Colombian association of truckers and members of the health sector’s union have also confirmed their participation in the August 19 national strike.
Coal Production Falls 13.4%
According to the Colombian Ministry of Mines and Energy, coal production during the 1st half of 2013 fell 13.4% to 40.5 million tons in comparison to the same period in 2012. It is expected that mineral exports in 2013 will decrease to USD 42 billion, a 10% decrease from last year’s figure. Drummond Colombia’s ongoing coal workers strike, low international prices, and a lack of infrastructure development are cited as the main causes for the expected decrease.
Central Bank expects GDP Growth between 3% and 5% in 2014
According to Central Bank manager Jose Dario Uribe, Colombia’s economy could register growth between 3%-5% in 2014. Growth for 2013 is expected to be between 3%-4.5%.
Pacific Alliance Meets U.S. Investors on September 25
President Santos and his counterparts from Pacific Alliance member countries (Mexico, Chile, and Peru) will meet with potential investors in New York on September 25 on the margins of the United Nations General Assembly.
For complete information please visit - http://bit.ly/16UK7P0
Exports Grew 5.6% in June
According to the Colombian National Statistics Department (DANE), Colombian exports totaled US $4.8 billion in June, a 5.6% increase over June 2012. This increase was mainly due to the 11.5% increase in exports of products from the extractive industry. In June, Colombia exported 23 million barrels of oil, a 14.4% increase compared to June 2012. The United States received 33.5% of total Colombian exports for June 2013.
Inflation in July 0.04%
The 0.04% inflation rate reflects an increase of 0.06% compared to July 2012 (-0.02%). The accumulated inflation rate for the first seven months of 2013 is 1.77%, which is considered low and consistent with the Central Bank’s projected inflation for 2013 of 2 to 4 percent.