Remarks by Angel Gurría
25 October 2019 - Bogota, Colombia
(As prepared for delivery)
Dear Mr Uribe, Ladies and Gentleman,
I am delighted to be involved in this meeting of EMnet, the network of multinationals working in emerging markets. I would like to thank the CEO of Bancolombia, Juan Carlos Mora Uribe, and his team for their warm welcome and for organising this important event. Let me also thank the EMnet team from out Development Centre.
On this occasion, EMnet will focus on the partnership between the OECD and Colombia, portraying it as a collaboration for competitiveness.
Strengthening Colombia's competitiveness is essential for promoting more inclusive and sustainable growth which can improve the well-being of Colombians. And we are pleased to see that the Colombian government is committed to this objective.
It should be acknowledged that Colombia has made significant economic and social progress in recent years. Between 2008 and 2018, the Colombian economy grew at an average annual rate of 3.5%, higher than the average in Latin America . The share of the population living on less than USD 5.5 a day dropped from 43% to 27% . In addition, the peace agreement opened up new opportunities and generated aspirations in social and economic spheres, not only for citizens, but also for business development.
Investors’ confidence has increased and the country has taken steps to position itself as a nation open to business and innovation. In 2017, the stock of Foreign Direct Investment reached over 57% of GDP, among the highest in the region and above the OECD average. Indeed, this presents great opportunities for the country's economic development. Thanks to improved digital connectivity and the adoption of specific sectoral policies, Colombia is now the fifth largest hub by number of start-ups in Latin America and the fourth largest by venture capital.
These advances are both a source of, and a reflection of, the increased competitiveness of Colombia's economy. In fact, Colombia climbed three positions in the World Economic Forum’s 2019 Global Competitiveness Index, reaching the best level in the country's history in this ranking.
This has to be welcomed. But above all, efforts must continue. Colombia continues to face great economic and social challenges that affect its competitiveness, productivity, economy and society. Allow me to highlight a few.
First, 27% of the Colombian population still live in poverty, and 39% in conditions of vulnerability. In addition, Colombia has one of the highest levels of inequality in the OECD, with a Gini index of 51.7. Another factor that undermines Colombia's competitiveness is the high level of labour force informality, which is close to 50%.
Second, Colombia continues to have low levels of productivity. The country's labour productivity is only one third of the OECD average. While progress has been made in sectors such as trade, manufacturing and the services sector, productivity in much of the economy remains constrained by heavy reliance on the primary sector. In 2017, commodity production and mining accounted for 80% of exports, only 10% less than in 1991.
Third, high levels of corruption. Despite significant efforts to contain it, 86% of the population perceives that corruption is widespread, a percentage higher than the averages for both the region (74.5%) and the OECD (54%). Corruption discourages investment and entrepreneurship; it affects trade, quality of services, and infrastructure.
Colombia is making efforts to address these challenges. And the OECD is ready to help Colombia accelerate the process. Yesterday we concluded two days of work in the framework of the International Conference on the Policy Uses of Well-being and Sustainable Development Indicators in Latin America and the Caribbean, with the objective of promoting more inclusive and people-centred policies. But these efforts should not only come from the public sector: the private sector also has an important role to play. That is why we have launched our Business for Inclusive Growth initiative, in which international companies have committed to addressing inequality and promoting diversity in their workplaces. Resolving these issues will strengthen inclusive growth, but it will also improve the competitiveness of the economy, of Colombian companies, of the labour force.
It is therefore crucial to support Colombia in strengthening equal opportunities and social inclusion by empowering the majorities, equipping them with the skills and abilities required by the twenty-first century labour markets. The OECD Centre for Skills and the Skills Strategies with which we work together with national governments can be of great help to Colombia. This must be accompanied by policies to create an institutional and regulatory framework that can increasingly contribute to labour formalisation, as we discussed yesterday at the International Conference on Well-being.
It is also necessary to continue to strengthen the territorial development policy, and to help local governments to adopt international best practices in public administration. We are already working with the National Planning Department and through our Territorial Studies.
The Colombian government should also promote more investment in quality infrastructures, measures to support R&D and innovation, more robust competition policies and more effective intellectual property rights. Colombia, like many countries in the region, needs to move from adopting technology to creating technology.
It is also essential to prepare the population, institutions and businesses to take full advantage of digitisation. The OECD review “Going Digital in Colombia”, which I presented this morning, reveals that Colombia still has the lowest broadband penetration in the OECD, with 52 mobile subscriptions and 13 fixed subscriptions per 100 inhabitants, compared to an OECD average of 110 mobile subscriptions and 31 fixed subscriptions per 100 inhabitants.
Finally, strengthening rule of law and the institutional framework is critical to boost investor confidence and encouraging investment. In addition, Colombia needs to develop a stronger public governance and justice system. This is crucial not only to increase fiscal legitimacy and encourage Foreign Direct Investment, but also to achieve the social contract. Last year, President Duque and I signed a Memorandum of Understanding to support the implementation of a National Anti-Corruption Strategy in Colombia, drawing on the OECD-LAC Action Plan and its recommendations in ten different policy domains.
These reforms and policies require close public-private dialogue. That is why communication platforms such as EMnet are so important. I invite you to make the most of these discussions.
Ladies and gentlemen,
The collaboration between Colombia and the OECD, hand in hand with business, can give a very strong boost to Colombia's competitiveness. But we should not forget that competitiveness is not an end in itself, but an instrument to promote investment, responsible investment; to promote trade, fair trade and respect for the environment; and growth, inclusive and sustainable growth.
We look forward to the completion of the last steps of the accession process and to working together for a more successful and competitive Colombia. Count on the OECD to design, develop and implement better policies for better lives. Thank you.