May 2011 Economy, Investment, Business Climate and Tourism On August 7, 2010, Juan Manuel Santos was inaugurated as President of Colombia. He took the helm of a nation that has recently undergone great change and experienced significant progress in many areas. For the first time in many years, there is a true feeling of optimism and confidence in the future. As an emergent economy attractive to foreign investment and tourism, Colombia has joined a select group of countries, the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) dynamic economies with high prospects for growth in the coming decades. Colombia has also begun the process to enter the Organization for Cooperation and Development (OECD), something unthinkable a few years ago. The dream of a peaceful and safe country with low rates of poverty, and an educated population with ample employment opportunities, is the context that frames the National Development Plan 2010-2014 of the Santos Administration, themed Prosperity for All. Colombia has had excellent macroeconomic performance: In 2009, while world GDP decreased by 2.1 percent, the Colombian economy grew by 0.4 percent. In the last decade, Colombia s economy has grown faster than the world economy and forecasts show that the trend of above average growth will continue. Growing purchasing power: GDP per capita doubled since 2004, from $2,482 to $5,980 in 2010. 1
Colombia is an important market: It is the 36th largest world economy, the 3rd largest in South America and one of the largest non- OECD markets. Annual FDI net inflows have multiplied by four: The outstanding economic stability has fostered foreign direct investment (FDI). In only eight years, the flows increased 200 percent, from $2.1 billion in 2002 to $7.2 billion in 2009. During the first nine months of 2010, FDI increased 3.2 percent from $6.3 billion to $6.5 billion. Colombia is the 3rd ranking country in the region, after Chile and Peru, in attracting FDI. The United States continues to be the main source of FDI in Colombia. Variation Sep.2009 Sept. 2010: 3.2% *FDI by Exchange Balance ** Participation by country positive accumulated inflows. It does not include investment of profits in the oil sector. Source: Banco de la Republica, Proexport 2
Colombia is the 3rd most Business Friendly country in Latin America and the top reformer in the region, according to the World Bank (2011). Colombia is the fifth country in the world and first in Latin America in investor protection, according to the World Bank (2011). 3
Colombia s mining sector is booming. The oil and mining sectors have great potential for foreign investors. From 2009 to 2010, FDI in this sector increased by 17 percent. Ninety- two percent of U.S. FDI to Colombia is in oil and mining. Source: Banco de la Republica, Proexport Colombia is the 6th largest destination for investment in mining exploration in Latin America. President Santos Administration, through the National Development Plan, projects an increase in annual FDI to $13 billion by 2014. International visitors to Colombia have doubled. While tourism around the world fell 4 percent in 2009, in Colombia it increased by 10.2 percent. Source: Proexport and DAS Colombia is also the best option in Latin America for hotel development projects. International tourism is growing more rapidly than the world average. With Pacific and Atlantic coasts, Colombia offers a unique South American location with a remarkably diverse environment and culture. 4
Colombia has been recognized as one of the 41 places to go in 2011 according to The New York Times travel guide, and Colombia offers opportunities for fantastic recreational tourism according to Lonely Planet and Wanderlust. Bogotá, Cali, Medellín, the Caribbean beaches and the Amazon jungle make Colombia a fascinating country full of expansive historical and cultural heritage, beautiful landscapes and great culinary offerings. The Santos Administration s goal is to have five million tourists visit Colombia by the end of 2014. 5