Interview with Francisco Santos Calderon

Vice president of Colombia
15 th of May 2008

You have been Vice-President for 6 years already. Colombia has changed tremendously and has received a lot of foreign investment the last years. Could you explain how the country has changed?

Colombia is according to Businessweek of May last year, the hottest American market. Today Colombia has the best security of whole Latin America, especially in the cities where 95% of the population lives. We still have some problems, but they are very minor like every other country. Secondly, we improved the conditions of foreign investment. We reduced taxes, introduced free trade zones and improved the investors’ confidence. When it comes to security and investor’s confidence, Colombia transformed into the Latin American leader of FDI as a percentage of the GDP; 9 million dollars last year, 6 million two years ago and 10 million three years ago. Secondly, an economy needs investment, investment and technology means more jobs, so we make sure that the economy and the investments keep growing and maintain the levels we have right now. Five years ago the percentage of the GDP was between 10 and 11; today its 28%. And that’s why we are generating the best conditions for the investors. The economy has been growing with 7% last year, we have an independent central bank, we don’t have a debt problem and we reduced the fiscal deficits. Thanks to all these conditions, the unemployment decreased from 18% to 11%.

We also have set an objective on the long term which we call “Chilealizar” the economy. This means that we are taking the economy of Chile as an example. We are negotiating with the United States, the northern Central-American countries, Mercosur and the European Union and we are about to finalize our negotiations with Canada. We are also negotiating with China and India about investment treaties. So we are assembling a portfolio of possible export opportunities for Colombia. Basically we are diversifying our markets. We have an immense internal market of 44 million people, with a great growth potential. The problems with Venezuela and Ecuador are temporarily and I think they are very interesting markets. Colombia is a very political stable country, which has a democracy since 1837. So we are the oldest democracy of Latin America with very strong institutions.

Which are the sectors that need investment the most?

Infrastructure, which is what we are doing. Today we are opening a tunnel in the central Cordillera, of 300 million dollars. We are about to launch a licitation for 1500 million dollars for a double highway of more than 1.000 kilometres from Bogotá to the coast. The government is approving some additions to construct double highways in the north of the coast. Right now they are also building a double highway of 150 kilometres from Bogotá to the west to the pacific coast. These projects are financed by concessions of private companies.

What are the future plans of the government for the next 4-5 years? What are its social and economic objectives?

At economic level, consolidation of the growth with consolidating and improving the conditions of investment. Also, to maintain the economic growth with the consolidation of free trade. To continue the rhythm of export, especially non-traditional exports, like petroleum, gas, mining. The export of Colombia has doubled and almost tripled in the last 6 years, from 12 million to 30 million dollars. An interesting fact is that the balance of traditional and non-traditional export remained. So we have to make sure this will stay in balance, however, Colombia is a great exporter of energy, which is very cheap and one of the challenges is to use this to attract new investment. We also have to be careful with the inflation and to consolidate the infrastructure.

Observers are saying that the economic growth will decrease to 4 or 5%. What is your opinion?

It is possible. According to our calculations we need a growth of 5%. Though, the first trimester of this year, we had bigger growth. We have to have confidence and keep doing the same things but carefully. When it comes to the social situation, we have to keep improving the security. If there is no security, there is nothing. Also the education, we want a universal education in Colombia, and also an universal medicine care, those are our goals for the year 2010, which is fundamental. All this goals we can reach if we take care of the private sector and the growth of the economy. Here in Colombia, it is very clear to us, that if you don’t have a strong, growing, private sector, with support of the government to grow, you don’t generate a social growth.

What are the strengths of Colombia?

It’s internal market, it’s geographic location, it’s energy costs; which is the most cheapest of Latin America, the quality of the employees; Colombia is number one of availability of qualified employees, and the institutions.

What is the image that people you meet abroad have?

They have a totally negative image. But when they come to Colombia, they say something completely different. This is something we are working on, to get more people to come Colombia. A goal on short-term is to get 4 million tourists. I think it’s difficult, but if you don’t put a high objective, there is no pressure to accomplish. We have a problem right now, that the Colombian Peso is strong, which makes Colombia more expensive. However, Colombia is an unexplored country with a lot of potential.

What is your personal message to our readers?

Colombia is a very different country. It is a friendly, serious, safe, modern country, which is leaving all its problems behind. Moreover, it is a country which is very open to foreign investment and we receive foreigners with open arms.