Colombia should be viewed as an excellent country for U.S. business thanks to factors such as improvement security, continued prudent management of the country’s economy and a new free trade agreement with the United States, argues Joseph Finnin.
As the AmCham in Colombia, our outlook for business with Colombia is extremely optimistic. One reason for this opinion has to do with the conditions and issues that companies look at when considering doing business in a country.
Colombia is a country with:
- A continued improvement in security.
- A continued prudent management of the country’s economy.
- A continued decrease in unemployment.
- Respect for IPR and other issues of great importance to investors.
- A continued increase in international reserves, now close to $15 billion.
- The largest GDP growth in the last ten years - 5.13 percent for 2005.
- An increase of 29 percent in FDI in 2005.
- A continued stable democratic government.
- A fiscal deficit (private & public) of 0 percent in 2005.
- A stable local currency.
All of the aforementioned factors will, in all certainty, continue through 2006 and beyond. In addition to those, there are other factors that will help boost the Colombian economy, bring about greater security for the business community and tremendous new opportunities are in the works.
One of the issues that the Colombian government has been analyzing in an effort to make the country and its businesses more competitive and efficient has been the area of Trade Facilitation. The government’s 2019 plan of action for the country’s internal agenda focuses on the need to improve roads, ports, and airports, reduce red tape and the time it takes to nationalize or export goods. In addition to trade facilitation, there is a serious discussion regarding a comprehensive tax reform that will actually reduce corporate taxes.
On February 27, 2006 Colombia finalized the negotiations for a Free Trade Agreement with the United States, the other major issue which will affect businesses. Amongst the future steps to be taken to achieve implementation of the agreement will be the approval on the part of the Colombian and U.S. Congress as well as the Constitutional Court in Colombia.
Given all of these factors, it is easy to see why Colombia should be viewed as an excellent country for U.S. business. Colombia continues to move in the positive direction that businesses look for and that some other countries, frankly, are not offering.
Because of what has already been taking place and what is planned for the future in Colombia, some companies from the U.S. and other countries have already decided that Colombia is the place to do business. These companies are seeing that their businesses can grow within Colombia and in the rest of the region by having a physical presence in the country and using Colombia as a strategic place to provide, produce or purchase products or services. They are seeing great opportunities through the creation of strategic alliances with local companies to benefit from well established local brands, distribution systems and loyal customers.
Perhaps the most important factor that U.S. and other multinational companies are looking at is Colombia’s reputation as a country that provides well-trained professionals and skilled workers, a country that has demonstrated respect for foreigners and foreign investment, and a country that is one of Latin America’s oldest democracies with a history of strong institutions.
Those who look towards the future also see that the FTA with the United States will require clear rules of the game that will protect investors and others as well.
For all of these reasons, among many others, the outlook for U.S. business with Colombia is excellent and an opportunity that should not be overlooked.
© Copyright Latin Business Chronicle.
Joseph Finnin is the executive director of the Colombian American Chamber of Commerce. He wrote this column for Latin Business Chronicle.