The Colombian government invests significant sums in Proexport – how do you justify the investment?
There are two ways to measure what’s going in terms of investment. One is the inward investment coming to the country. For example, last year Colombia had $15.8bn in foreign investment, a record. And this year the first-half figures show a growth of around 5%. In terms of Proexport we measure the number of cases that have been supported by Proexport. There are very strict rules about this – they must be projects that wouldn’t have happened if it hadn’t been for the help of Proexport. For this year in the first half there were 45 projects, worth $1.4bn and due to create 10,000 jobs over the full cycle of the investment. Moreover these are not plans or intentions but actual projects that have already begun. So we think the results are pretty good and show what Proexport is doing for the country.
We report to the Ministry of Trade, Industry and Tourism and have internal goals for investments and promotional activities. Moreover 25% of Proexport staff salary is tied to our success in achieving these results, which is very unusual for either a government organisation or a investment promotion agency.
Where are the most exciting investment opportunities in Colombia?
People often think of mining or oil and gas but these are very wide areas that hold much more potential than just extraction. There are lots of high-value niche industries around these areas. For example, in mining, there are Australian or Canadian service providers that started in Chile, then went to Peru and are now investing in Colombia.
Infrastructure is another area that people associate with Colombia. Again there is a whole value chain of opportunities. Indeed speaking of infrastructure people think about Colombia as having a bottleneck in infrastructure but it depends what type you are talking about. Colombia has some of the best telecommunication systems in the region and a great electricity generation and transmission system.
Another area is manufacturing. What’s interesting here is that Colombia has a significant local market with around 45 million consumers and a middle class that is expected to grow from 25% to 50% in the next 15 years or so. But the other element that excites investors is the opportunity to use Colombia as a platform to enter regional markets. So in areas such as auto manufacture, cosmetics and building materials there are opportunities in the domestic market and the chance to leverage Colombia’s free trade deals to export to other countries too.
The final area is services. We get great feedback on the quality of Colombian engineers, accountants, lawyers etc and we have seen a really important increase in the outsourcing of services for Spain and the US. Indeed companies are coming here not just to outsource, but also to do their whole back office and administration tasks. One good example of this is AIG which recently chose Colombia as their financial hub for Latin America.
How has international investors’ perception of Colombia changed in recent years?
As an agency we have seen a complete change in how the country is viewed by investors around the world. As part of my job I attend investor conferences and financial summits in many different countries and the interest in Colombia is very strong. In fact I have been doing this since 1998 and the change since then is enormous. Now when I speak to investors it is not a question of if they are going to invest in Colombia but rather they already have decided they will and they want to find the right opportunities.
Obviously it takes a bit longer to change the opinion of the wider public, which is influenced to an extent by the portrayal of the country in films. But even there we have seen a shift in attitude. For example if you look at the numbers of tourists visiting the country you see that Colombia is now a trendy destination.