Colombia: Presentación Colombia – Investment Environment and Inglés Business Opportunities z Andrés Sarmiento May - 2015
PROCOLOMBIA
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Colombia at a glance
General Facts • With an extension of 48 Million inhabitants • 1,141,000 km2 more than 3 3rd largest population times the size of Germany and in Latam twice the size of France . only Colombia is the 55% country in South America with access to both, the Under 30 years old. Atlantic and the Pacific • 9 cities with over 500 ocean. thousand people.
Times of great economic achievements GDP 2014 : +4.6% GDP 2013: + 4.9% Higher than the Latin American average growth (1.3%). Controlled Inflation FDI 2014: US$16,053 2014: 3.66% FDI 2013: US$ 16,200 Below target inflation Figures in US Millions Unemployment rate 2014 : 9.1% Unemployment rate 2013: 9.6%. Lowest in 14 years
The highest growth in 2014 among Latam’s major economies Gross Domestic Product Growth, 2014 Latin America and Caribbean (Average 4.6%* growth) 2,5% 2,1% 1,7% 1,2% 0,1% -0,4% -4,0% High investment in housing and infrastructure (12% growth) Colombian growth Growth in private consumption (4.6%) drivers according to Solid labor market OECD Public expenditure *For Colombia data corresponds to real GDP growth reported for 2014 according to DANE. For the rest of L.A data corresponds to the expected growth for 2014 according to IMF (World Economic Outlook Update – October 2014).
Peru and Colombia, the top growing economies in the coming years Gross Domestic Product, average growth 2015e 4,00% 3,80% 3,20% 2,80% 1,30% 0,30% -1.30% -7,00% Source: IMF (World Economic Outlook – January 2015) e = estimated
During the last 10 years, Colombia increased threefold its exports Exports. 2000 – 2014 Top export non – traditional products FOB Values US$ millions 2014 56 954 58 822 54 795 Fresh Flowers 2.5% 37 626 24 391 Plastic in primary forms 16 730 1.9% 13 158 Banana 1.5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 United States China Panama Spain 25.7% 10.5% 6.6% 6% Source: DANE Traditional and Non – traditional products are included
Major Finnish companies have trusted in Colombia Office in • Software & IT Services Bogotá Plant in • Machinery & Equipment Ibagué Communications Office in • Bogotá Consumer products
FDI & some reasons for its behaviour
In 2013 Colombia reached a new record in FDI: Nearly 10 times of what it received 10 years ago Top Investing Countries in FDI Inflows. 2008 – 2014 Oil and mining Colombia 2000 – 2014 US$ million Other sectors United States 16,200 16,054 • US$ 27,499 million 15,039 14,648 • 22% 6 419 United Kingdom* 8 089 • US$ 16,826 million 7 180 7 945 • 13.8% 8,343 Spain • US$ 10,437 million 5 236 • 8.4% 9 634 8 111 7 468 7 095 Switzerland 3 107 • US$ 7,440 million • 6% Average 2008-2010 2011 2012 2013 2014 Source: Balance of Payments - Banco de la República. Share of all countries with positive cumulative investment, The information includes reinvested profits or investments in the oil sector Note: the list of the top countries investing in Colombia does not include Panama. *United Kingdom includes England and Wales
Macroeconomic stability and strong economic performance in the long term GDP Growth, Inflation and unemployment Rate 2002 – 2018p (%) Unemployment rate GDP 15.6 Inflation 14.1 13.7 12.0 12.0 11.8 11.8 11.3 11.2 10.8 10.4 9.6 9.1 9.0 8.9 8.9 8.6 7.7 6.9 6.7 6.6 7.0 5.3 4.9 4.8 6.5 4.7 4.7 4.7 4.6 4.6 5.7 4.0 4.0 5.5 3.5 4.9 4.5 2.0 2.5 3.9 3.7 3.6 3.6 3.5 3.4 3.3 2.4 1.9 1.7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p 2015p 2016p 2017p 2018p P: Projected Source: DANE; Banco de la República; Fedesarrrollo July 2014, EIU - Economist Intelligence Unit . 2014 * 2014 inflation given by DANE
Colombia's per capita income has nearly doubled since 2000 Per capita National Income (PPP) 2000 – 2018p, US$ Income 16 000 14,110 High Income 14 000 12 000 10 800 10 000 8 850 Middle High 8 000 Income 5,805 6 000 4 000 Middle Low Income 2 000 Low Income 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p 2015p 2016p 2017p 2018p Source: EIU – Economist Intelligence Unit. PPP = purchasing power parity. Economies are divided according to 2012 income per capita, calculated using the World Bank Atlas method. The groups are: low income, US$1,035 or less; lower middle income, US$1,036 - US$4,085; upper middle income, US$4,086 - US$12,615; and high income, US$12,616 or more.
Significant progress in terms of purchasing power Index of GDP per capita at current prices, 1999 – 2019e 1999=100 445,9 345,5 301,9 237,4 264,2 218,9 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 2019e Colombia Latinamerica World Source: IMF – World Economic Outlook, October 2014 e = estimated
A rapidly expanding middle class Middle class* in Colombia as a percentage Average real growth of consumer of total population expenditure, 2014 – 2018 46% 5,5% Million inhabitants 37% 4,7% 25% 24.7 4,2% 19.0 16% 11.6 4,1% 6.7 2,9% 2002 2012 2020 2025 * Calculus based on a 4.6% GDP growth Middle class: Monthly household income between 3.2MW and 13MW (MW) Minimum wage in Colombia 2014: USD 320. Source: Fedesarrollo (2013) and Euromonitor
Economic growth, Investor Confidence and Security Peace talks started 30,0 25,0 15 years of security 20,0 improvement 15,0 10,0 5,0 0,0 -5,0 Insecurity perception** * Figures do not include FDI registered for SabMiller adquisition of Bavaria in 2005 (USD 4,800 MM). ** Perception of insecurity as a key issue affecting industrial growth in the country. Monthly Industrial Survey -ANDI. Source: National Business Association of Colombia - ANDI. Balance of Payments – Banco de la República.
Colombia tops the region as the best country for doing business in 2015 Getting credit • Investor protection • Colombia , 34 * Registering property • Peru , 35 * 19 and construction permits Mexico , 39 * -1 Chile , 41 * +4 Panama , 52 * -2 +3 Ecuador , 115 * Position out of 189 economies Change in rank 2014 – 2015** Brasil , 120 * 0 +3 Source: Doing Business Report 2015. World Bank * Position between 189 economies. ** Positive numbers indicate an improvement in the business environment
Colombia, an investment-grade country with positive outlook Rating Rating Date Outlook Agency BBB 24 – Apr- 2013 Stable 5 – Mar - 2007 BBB + BBB 13 – Dic- 2013 Stable BBB+ 22 – Jun - 2011 Positive Baa2 28 – Jul - 2014 The key drivers for Moody ´ s upgrade on July 2014 were: 1. Expectations of continued strong growth dynamics despite external headwinds and robust long-term growth prospects supported by the fourth generation (4G) infrastructure investment program; 2. Sound fiscal management that has led to moderate fiscal deficits coupled with continued compliance with the fiscal rule and expectations that this will continue. Source: S&P Ratings; Revista Dinero, Colombian Treasury.
Colombia: A gateway to the Pacific Alliance Mexico Population of 214 million Almost Brazil ´ s Population Colombia 47% of the regional FDI FTAs with 60 countries Total FDI of US$ 85,488 Access to benefits of million (2013) markets that represent 85.7% of the World GDP Peru GDP of USD 2,123 billion The members generate 35% of the region ´ s GDP Chile MILA is the first cross border initiative to integrate equities markets, without any sort of merger or global corporate integration, using only technological tools along with Listed companies: 590 Source: MCIT, 2013
Colombia has access to more than 45 countries and 1,500 million consumers through its network of FTAs. Norway Island Canada Liechtenstein European Switzerland Union South Korea United States Japan Turkey Israel Mexico Cuba* Guatemala Costa Rica Honduras Venezuela* Nicaragua* Panama El Salvador Ecuador Brazil Peru Pacific Alliance Bolivia Paraguay In force Chile Uruguay Signed Argentina In negotiation *These are Partial Scope Agreements (PSA) - - - The dotted line refers to member countries of The Pacific Alliance other than Colombia. – Chile, Peru and México. Source: Colombian Ministry of Commerce, Industry and Tourism. 2015.
Opportunity sectors
Sectors of opportunity – Infrastructure: A major drive for growth Fourth Generation of PPP’S (4g) – Roads : US$ 24 Bill. -Intervention of 8.000 Km of Roads - 1.300 Km of new Roads - 40 new concessions Ports: US$ 2,1 Bill. (2015-2018) Improvement of the Opportunities to develop Magdalena river navigability: air, road, river and airport US$ 1.3 Bill. infrastructure Airports: interventions US$ 1.8 Bill (10 projects) and constructions US$ 2.3 Bill (2 projects) . (2015-2018) Step Rail Ways Concession Program (feasibility study – step 2) US$ 4.2 Bill. Source: Ministry of Transport
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