If you were looking for a country to exemplify evolution, adaptation to a changing environment, you would do well to consider Colombia. Just one glance at the country’s history demonstrates that it is a country of change. Now, the government is determined to steer Colombia’s evolution in a direction that benefits all. The forthcoming Colombia Investment Summit 2020 is a significant element in engineering that evolution.
A visitor arriving by steamship in the port of Barranquilla in the early twentieth century would have found, on walking down the gangway, a country of barely four million mainly country-dwelling inhabitants who made their living from the land. Moving forward a century, the modern visitor, stooping out through the doorway of a jet airliner and into the warm, kerosene-scented air of the passenger boarding bridge, walks into a highly urbanised country of 50 million inhabitants, of which more than 70 percent live in the cities. Colombia now boasts one of the highest growth rates in Latin America. It is also one of the most ethnically and linguistically diverse countries in the world, a fact which may, by the way, help to explain the passion and drive of its people.
The economy of Colombia developed rapidly in the second half of the twentieth century, thanks largely to the country’s richness in natural resources. Now, the Colombian government is vigorously pursuing a policy of even more dynamic change, aiming to create, in the words of the president, Iván Duque, “an equitable country, based on legality and entrepreneurship”. The challenges are formidable but the elements are in place.
The central plank of the government’s strategy is that of attracting foreign investment, and a major conduit in that has been the annual, and increasingly successful, Colombia Investment Summit. This year’s event, for reasons that are all too depressingly familiar to most of us all around the world, will be conducted virtually. Over the course of three days, from 7 to 9 October 2020, the summit will see contributions by people from a range of political and business organisations. They are key personalities from across the gamut of stakeholders in the drive to leverage foreign investment to the mutual benefit of the investors themselves and also to the Colombian nation, through the generation of sustainable, responsible development. It is, as the organisers aptly describe it, an “investment matchmaking” event and will be led by the Ministry of Trade, Commerce and Tourism, and by the state organisation ProColombia.
What is ProColombia?
ProColombia is the government body charged with coordinating, promoting and facilitating the drive to attract FDI to Colombia and was set up as a principal component in the country’s drive towards the “internationalisation” of Colombia. It’s an initiative that recognises that the future of the country is one of full participation in the international political, economic and commercial community, and that there are mutual benefits to be derived from foreign involvement in the development of Colombia. ProColombia’s president is Ms Flavia Santoro, who will be delivering a talk as part of CIS 2020.
Colombia has long been associated with exports in the field of mining and extraction. But now the government’s ambition is to take full advantage of the country’s equally deep reserves in other fields: those of talent, creativity, resilience, the energy of the people, its resources in the form of nature, its potential for tourism of new and creative kinds.
To that end, ProColombia is at the forefront of supporting potential investors in the decision-making process with the goal of producing profitable projects with sustainable benefits to the country.
So, why Colombia? With so many countries around the world vying for foreign investment, what is it about Colombia that should make potential investors sit up and take notice?
It would be fair to say that Colombia has had some very thorny issues to deal with in its internal affairs, particularly in the second half of the twentieth century. And perhaps the resulting unfavourable perception of the country in the past is one impediment in the bid to attract foreign investors today. But they should not worry. The Colombia of today can justly claim to offer political, institutional and economic stability that is unrivalled in Latin America. The country’s recent access to the OECD is just one testament to this.
In fact, Colombia is a fully signed-up member of the international community, both regionally and worldwide. To name but a few, it is a member of the Pacific Alliance (which promotes the free circulation of goods, capital, services and people in the member area), the WTO, the OAS, and the Association of Caribbean States, and an associate member of Mercosur (which has similar aims to the Pacific Alliance, for the Latin America region). Colombia is also the “C” in the CIVETS group of countries, emerging economies that are acknowledged as “ones to watch” in the future (the others are Indonesia, Vietnam, Egypt, Turkey and South Africa).
The geographical location of Colombia almost shouts out its huge benefit in making the country a strategic location for business. Situated at the gateway to the South American continent, it boasts major ports on both the Caribbean and Pacific coasts, giving access for shipping routes to both seaboards of the US. The government is currently investing in infrastructure to improve internal road links with the major ports – such projects also being major opportunities for foreign investment themselves.
And geography bestows yet one more benefit on Colombia: its time zone, which corresponds to US Eastern Standard Time (EST) (although there may be some variation because of daylight saving). Why is the time zone important? Now is a good time to talk about nearshoring.
In the past, a lot of businesses moved parts of their operations to parts of the world where costs were lower, such as China and India – that is to say, outsourcing, in its various guises. In general, the objective of reducing costs was met, but there were flies in the ointment, in the form of unexpected issues of language and – yes – time zone. When there are things you need to discuss with your business partners in real time, there’s no point in calling when they are tucked up in bed, sleeping soundly.
So the principal idea behind nearshoring is that you move your business processes to a location that is in the same general region as your business, and hence in a similar time zone, but where the costs are still lower than in your home territory. An added benefit of this is that, in situations where goods have to be transported in one direction or the other, the logistics routes are much shorter.
The importance of such issues has been highlighted in recent times, as the world health crisis has strained supply chains to breaking point. In the face of this, companies are looking to establish supply routes that are not only shorter, but more resilient against unforeseen circumstances – in short, to “regionalise” their supply chains. From the point of view of the United States, Mexico is the nearest Latin American country and would be a strong contender for nearshoring, were it not for the fact that the poor relationship between the US and Mexico is anything but conducive to fruitful commercial partnerships.
Another critical factor in considering the nearshoring options is the flexible free-trade agreement that Colombia has with the United States, adding icing to the cake of geographical proximity. This, together with the country’s 114 free trade zones (the second-largest number in Latin America), is powerful medicine.
But does Colombia have a sufficiently skilled and educated workforce to make it feasible for foreign companies to consider moving their operations to the country? Well, yes, it turns out that indeed it does. As a result of its broad range of top-flight universities, research centres and other centres of excellence, Colombia possesses an admirable supply of trained, talented and multilingual people-power – and all at a lower cost than in, for example, Mexico. In the words of Erin Champlin, Vice President of Johnson and Johnson Global Services, which set up major offices in Bogotá, her company chose the location because of the availability of highly educated, multilingual talent and the presence of prestigious universities to recruit from. In fact, Colombia boasts a highly developed academic infrastructure and more than 3,950 research groups in science and technology.
Sectors with investment potential
In its mission to facilitate the selection and implementation of appropriate ventures by potential investors, ProColombia has identified an impressive range of opportunities for them to consider. More than 200 such opportunities are scheduled for presentation during CIS 2020, in initiatives spanning areas such as infrastructure, agro-industry, technology and tourism.
Colombia is a country composed of a number of regions, each with its own distinctive characteristics – geographical, commercial, social and academic. Such variety is, in itself, an opportunity, since any prospective investor is highly likely to find the specific features they are looking for in order to set up any given business undertaking. As a very rough guide, the regions of Colombia may be said to excel in the following fields, each ripe with potential for investment:
- Bogotá region: technology-based services; business process outsourcing (BPO); creative and cultural industries; cosmetics and personal care; health-related services.
- Caribbean region: port infrastructure; film and music festivals; plastics and petrochemicals; metals; agrochemicals; pharmaceuticals; tourism infrastructure (hotels, theme parks, eco-tourism, adventure tourism); beaches; biodiverse landscapes; jungle landscapes.
- Central region: coffee cultural landscape (UNESCO World Heritage-recognised); tourist infrastructure; 4.0 industries; IT technology; trained workforce for outsourcing; production of coffee, cocoa, cereals, fruit and vegetables; vehicle parts and accessories.
- Pacific region: expanding port infrastructure (multimodal port of Buenaventura); country’s largest agricultural producer; climate for year-round production; Cali international airport; seven free trade zones; academic infrastructure and R&D centres.
- Orinoco and Amazon: natural gas and oil reserves; agricultural capacity; biodiversity; tropical jungle; potential for eco-tourism; livestock and meat and dairy products; more than 385 renewable-energy projects.
- Eastern region: agro-industrial output (oils, fats, cocoa, dairy products, meat); investment potential for complex health services; advanced health cluster with trained professionals; construction materials (ceramics, clays, stone, glass); geographic location for supplying other Caribbean countries.
What does CIS 2020 consist of?
With all that background in mind, what can we expect from the Colombia Investment Summit 2020? As we mentioned earlier, it’s a virtual event taking place over three days in October (from the 7th to the 9th). Attending will be 550 investors from around the world; in total, some 1,200 to 1,500 people are expected to visit. There will be more than 1,000 online business meetings.
The main address will be given by the President of Colombia, Iván Duque. The keynote speaker will be former US president Bill Clinton. On the agenda for Day 1 will be discussions encompassing investment opportunities in Colombia’s regions, and also foreign direct investment and the outlook for capital markets.
Day 2 sees virtual discussions, taking in various sectors that will be of keen interest to potential investors in Colombia: chemicals and life science; infrastructure; tourism and hospitality (including large-scale special tourism projects); and metalworking. Also under discussion will be impact investment in the country.
On Day 3, we can look forward to discussions around the agribusiness sector, the energy sector and 4.0 industries.
Throughout the three days, delegates will have ample opportunity to forge meaningful business alliances by virtue of business meetings with local companies and interaction with projects to be financed, as well as with key entities having involvement in the setting up of businesses in Colombia.
CIS 2020 promises to be an exciting event, full of potential for initiatives that will be of enormous benefit to those who invest, as well as to Colombia as a whole. Colombia has evolved, and will continue to do so as it finds its place in a changing world. Now is a time of great opportunity to participate in meeting the challenges posed by those changes, and help Colombia towards an evolution that will bring benefits to all.
Those who are interested in participating in the virtual event should register with the ProColombia platform. www.colombiainvestmentsummit.co/en
The promotion of exports of non-mining energy goods and services in markets with potential, the expansion of Colombian companies, the attraction of foreign direct investment to Colombia, the positioning of the country as a tourist destination for vacations and meetings and Colombia Country Brand, are the main axes on which PROCOLOMBIA focuses it’s work.