Question 1: The triggers of the Colombian transformation? Question 2:How would you judge Colombia’s investment climate and public-private relations? Question 3:Colombia’s current challenges and opportunities Question 4:Colombia in the regional context

1. 
Colombia: The turning point
Remarks by Alvaro Uribe October 2013

2. Question 1:
The triggers of the Colombian transformation?

3. Colombia’s Picture in 2002
Security
28.837 homicides
2.882 kidnappings
69 homicides per 100.000 habitants
1.645 terrorist attacks
350 mayors out of their municipalities
158 municipalities without police
Economy
Average Economic Growth 1994-2001: 2.1%
GDP per Capita: US$2377
Investment as % of GDP: 16.5%
Exports: US$11.975 million
FDI: US$2.100 million
Inflation: 6.99%
Fiscal balance: -3.2%
Social
Unemployment: 16.2%
Health Coverage: 25 million Colombians
Pension affiliates: 4.5 million
Poverty: 57%
Education Coverage: Primary 97%, High
school: 57%, University: 24%
Mobil Phone Lines: 4.6 million
Internet coverage: 1.9 million
Eleven years ago Colombia was a fragile state…
The Colombian Paradox: a long and stable democracy in a permanent threat from terrorist groups, drug dealers
and organized crime…

4. Colombia faced an Confidence Deficit
Confidence Deficit
The elusive quest for peace
Many governments exhausted all
their political capital attempting
to reach peace through political
dialogue…the result was military
strengthening from illegal armed
groups and a rapid growth in
their criminal activities (68%
thought the country was going in
a negative track)
Terrorist Groups (Guerrillas and
Paramilitaries) had created a
sense of defeat in the Colombian
people
Fear impacted in the Colombian
people Mindset
The lack of investment
The drain of human capital
The sense of danger in
Colombian roads
The expansion of massive
kidnappings created an
emotional domino effect

5. Facing the problem
VISION
Our vision was to build a Comunitary State:
 CONFIDENCE was our main goal
 Without Confidence:
• No investment
• Unemployment
• Lack of opportunities
• Brain Drain (Young people wanted to leave without a
return ticket)
 Three main Policies:
 Democratic Security
 Investment with fraternity
 Social cohesion
 For the First Time a National Development Agenda had Security as a driver of Development
(Security = Investment = Social Cohesion)
 No more a debate between left and right

6. Policy Vision
WE INTRODUCED A COMPREHENSIVE POLICY FRAMEWORK…
Social
Cohesion
Investment
with
fraternity
Democratic
Security
Confidence
Security as a Democratic Value
Security for all
Confront all
criminal
organizations
Security
without
martial law
Security with
freedoms and
human rights
protection
Security in
coordination
with the
people
Investment Target
Security:
Human
Legal
Political
Sound
Macroeconomics
Incentives
Access to
markets
Competitiveness
factors:
•Infrastructure
•Regulation
•Connectivity
•Logistical chain
Social Cohesion
Highest quality
in education
Universal
healthcare
Access to
Finance
Stable Jobs and
entrepreneurial
spirit
Connectivity

7. Security as a development cornerstone
Innovation in Security
Recovering Security
1. Macro Vision and Detailed Follow up:
• Daily commitment to monitor security in every region
• How citizens had the President Mobile Phone Number
2. Early Victories :
• Road caravans
• Massive kidnappings are over
3. Strategic Force Integration
• All Forces working together
• Share success
4. National Informant Network
• Citizens became active in denouncing criminals
• Reward Mondays
5. Commander in Chief assumes responsibility
• The Granda Story
• Operation Fenix: Fire the Air Force Commander
• Operation Jaque: The pressure for a humanitarian exchange and the final outcome
6. Smart Weapons:
• The importance of strategic warfare
7. Extradition:
• The decision to extradite the Paramilitary Kingpins

8. A viable country for long term investment
We made Colombia a viable country for FDI due to a multiplicity of factors…
Structural Elements
Political Stability
Sound Macroeconomic
Management
Human, Political and Legal
Security
Competitive elements
Investment incentives
Access to markets (Canada, EU,
EEUU, MERCOSUR, etc)
Free Trade Zones
Logistical advantages
Legal stability agreements
Comparative elements
Investment Grade
Stable institutions
Growing internal
demand
Complementary
Human Capital
New World Class Sectors
incentives
Strong financial system

9. Social Cohesion was our ultimate objective
Social
Cohesion
National Learning
System –SENA-Conditional
Education
Coverage and
quality
Cash
Transfers
Access to Finance
(Banca de
Oportunidades,
Micro-Credit)
Financial Sector
Downscaling
Public Utilities
Coverage
Rural
Development
Breaking the
communication
and technology
gap

10. Oil and gas a success case
In 2002 it was believed
that by 2009 Colombia oil
production will not be
able to attend national
demand
In 2003 the oil and gas
sector restructuring was
designed
ECOPETROL undertook a
strategy shift to become a
more competitive and
professional corporation
The National Hydrocarbon
Agency was created
From 2002 to 2010
successful exploration
passed from 40% to 61.4%
Between 2002 and May
2010, 447 new fields were
explored
In 2007 ECOPETROL was
capitalized by 10%
through local capital
markets. 486.000
Colombians bought shares
Between 2002 and 2010,
341 exploration and
production contracts were
signed
Seismic exploration in the
country (Onshore,
Offshore and 2
dimensions) increased by
more than 250%
Colombia is currently
close to produce 1 million
oil barrels per day
Success triggers
Security: Investment,
exploration
Government Reform: New
ECOPETROL and ANH
Investment target policies:
New players and new
exploration and production
contracts
The case of the oil sector in Colombia: Change is possible

11. Results oriented administration
Indicator 2002 2010
Homicides 28.838 15.000
Kidnappings 2.882 228
Homicides per 100K
Habitants
69 35
Terrorist attacks 1.645 250
Municipalities
without mayors
presence
350 0
Municipalities
without police
158 0
Our policy achievements generated a turning point
Indicator 2002 2010
Average Economic
Growth
2.1% 4.3%
GDP per Capita 2377 5.300
Invest % GDP 16.5% 24.6%
Exports US$11.0
00
US$
39.000
FDI US$
2.100
US$ 7.000
Inflation 6.9% 2.5%
Indicator 2002 2010
Unemployment 16.2% 11.6%
Health Coverage 25.1 million 43.1
million
Pension affiliates 4.5 million 7.1 million
Poverty 57% 38%
Education coverage
(Primary, Hs, University)
97%
57%
24%
100%
79.4%
35.5%
Mobile phone users 4.6 million
lines
41 million
lines
• Reached the highest economic growth in more than
20 years
• The largest education, health and connectivity
coverage in its history
• The largest poverty reduction in Colombian history
• The biggest FDI rates in history
• The lowest violence records in 30 years
• Expanded the middle class
• Highest exports in Colombian History.
• Paramilitary groups dismantled
• FARC structure severely dismantled
• Per Capita income more than doubled

12. Question 2:
How would you judge Colombia’s investment climate
and public-private relations?

13. Colombia has mixed results in Business Climate
Indicators
 Colombia in comparison to the Region best and worst
performers…
Indicator Brazil Chile Mexico Colombia Peru Venezuela
Starting a Business
(Proceadures)
15 8 6 9 6 17
Starting a Business
(Days)
120 22 9 14 27 141
Days for Construction
Permits
411 155 105 50 188 395
Hours devoted to pay
taxes (Hours per year)
2.600 316 404 208 380 864
Days to enforce a
contract
616 480 415 1346 428 510
Enforcing Contracts
(Cost % Claim)
16.5 28.6 32 47.9 35.7 43.7
Cost to export US$
per Container
US$
1.730
US$745 US$1.420 US$1.770 US$860 US$2.590

14. Colombia in the Doing Business Report
Colombia is one of the best regional performers in the Doing Business Report. Its performance has been consistent
over the last four years, although a reduction in the ranking has been the characteristic
Country DB 2013 DB 2012 DB2011 DB2010
Mexico 48 53 35 41
Peru 43 41 36 46
Colombia 45 42 39 38
Chile 37 39 43 53
Argentina 124 113 115 113
Uruguay 89 90 124 122
Ecuador 139 130 130 127
Brazil 130 126 127 124
Venezuela 180 177 172 170

15. Colombia risk perception
Colombia is perceived by the financial markets as a low risk country…

16. Public – Private sector relations in Colombia
The Colombian government and the private sector have been working closely in strategic areas…
Security
Partner with communities to denounce
criminal activities
Financial services
Forest Guards Families
Cajas de compensación Cooperatives
Infrastructure
Work with the private sector to expand
telecommunication coverage
Banca de oportunidades (Corresponsales no
bancarios)
Dorado Airport and others Second Generation road concessions
Energy
Port Development in Cartagena, Barranquilla
and others
Ecopetrol IPO ANH with a new partnership vision Mining Concessions

17. Characteristics of the Colombian entrepreneur
Colombia’s private sector leadership counts with valuable trends and principles…
Highly
prepared to
deal with
adversity
Trends Well
educated
professional
Result based
manager
Socially
Conscious
Politically non
radical
Policy
awareness
Supports
access to
markets
through FTA’s

18. Public –Private institutional governance
The relation between public and private sector has positive characteristics that favor a sustainable institutional
Characteristics
ANDI and other
representative
groups actively
participate in policy
Open policy dialogue
with representative
groups
discussions
Government
executes market
oversight through
specialized agencies
Government and
private sector
discuss employment
policies like
minimum wage,
among others
The National training
system is managed
according to private
sector demand
Congress and the
Judicial System have
respect towards
privates sector
initiative
environment…

19. Investor confidence policies 2002-2013
The relation between public and private sector has positive characteristics that favor a sustainable institutional
Investor
Confidence
Free Trade Zones
Tax Incentives
Legal stability
agreements
Human and
infrastructure
security
Dialogue with
investors
Constant Market
development
reforms
Access to
markets
Drop double
taxation
agreements
Internal
competitiveness
agenda
environment…

20. Question 3:
Colombia’s current challenges and opportunities

21. Colombia’s main challenges
Colombia faces challenges that will determine the future of institutional and investment
Security
Maintain Macro-Vision and
Micro-Management
Continue dismantling all
terrorist organizations
Continue dismantling drug
cartels apparatus
Strengthen Citizen Security
agendas with local authorities
Economic
Face new trends of currency
appreciation
Maintain and increase FDI flows
(Security, incentives and
stability rules)
Fiscal Policy to face new
countercyclical challenges
Increase tax collections
Expand new trade markets
through FTA’s
Social
Cohesion
Fight labor informality and
create quality jobs
Insure education and health
quality
Expand vocational training
coverage
Create Entrepreneurial Family
Transfers program
Political
Judicial reform
Strengthen Democratic Center
Improve local institutional
capacity
New law implementation
(Victims and land)
Prevent the emergence of
populist movements
climate…

22. Economic sectors with Growth Potential
There are 4 sectors with a big potential among many other…
Oil and gas: Colombia has been growing its
production reaching 1 million barrels per day. New
exploration will expand…
Mining: Colombia’s mining potential continues to
grow expanding opportunities in sectors like
emeralds, gold, cooper, nickel, iron, coal, among
others
Agribusiness: Food demand in the world would
trigger new opportunities in the Colombian rural
areas. These opportunities ought to be faced with a
genuine agribusiness model that integrates small
producers and industrialized structures
Services and creative industries: The constant
expansion of the middle class and the per capita
income will boost the service sector and turn the
country into a larger consumer of creative content in
T.V., Cinema, magazine, radio, arts, jewelry, design,
etc
The Big Four Sectors

23. Opinions about specific sectors
Infrastructure
Requires a profound interaction with local
capital markets in order to achieve long term
financing
Access to finance for infrastructure
development is critical
Government Procurement must turn more
expedite
The sector has a growing potential for
investment, considering Colombia's growth
and the need to improve logistical networks.
Oil and mining
Environmental licenses must be more expedite
without affecting effective oversight
Labor conditions and social investment are
crucial for the sector to build a community in
areas of operation
Sector must become a leader in environmental
standards
Partnership agreements with the government
are positive operational conditions.
Creative sectors
Advertising services exports are 1.5 times
bigger that tobacco exports
Creative services exports are bigger than
natural gas exports
Arts and craft exports are bigger than electrical
energy exports
Content consumption will boost advertising,
music, animation and other industries
Reflections on some market conditions…

24. Economic Growth
Colombia must reach a growth rate above 5% to achieve its social
cohesion goals
Economic growth will require structural reforms in the taxing,
investment, pension, judicial and labor system
Colombia requires and significant constant investment rate to
expand markets and finance its social safety net
Certainty will be the mantra of long term investment. Certainty
depends on the institutional architecture of the country

25. Question 4:
Colombia in the regional context

26. Regional opportunities
Policy Changes since 1980 match four range of opportunities
Population
Close to 600 million
people
Average age
between 24 and 28
Per Capita Income in
PPP close to
US$10.000
Poverty
reduction
64% of our population is a expanding
middle class
During the last decade 40 million people
have left the poverty line
Life expectancy has increased from 65 to
75 years
Child mortality has been reduced by 50 per
cent
Literacy rates are above 94%
Mobile phone penetration has increased by
78 per cent
Internet access has increased by 33%
Healthcare coverage has increased by 50
percent
Water and sanitation coverage has
reached 80%
Commodities
in time of
Demand
10 percent of the World
oil reserves
6 percent of the World
gas reserves
Almost 50 percent of the
World cooper reserves
50 per cent of the World
silver reserves
13% of the World iron
reserves
26% of the World fertile
land
24% of the World beef
supply
Bio Reserves
20 per cent of the
World Biodiversity is
concentrated in the
Amazon ring
Almost 50% of the
World potable water
supply
57% of the world
primary forest

27. The model of transformation
The change process is a consequence of the consistency, congruence and sense of urgency that a group of countries have
adopted as their policy cornerstone. Brazil, Mexico, Colombia, Chile, Peru and Uruguay represent 70 per cent of the region’s
population and 75% of the regional GDP
The strengthening of
Liberal Democracy
The adoption of an
institutional Framework
in favor of foreign and
national investment
The construction of a
sound and sustainable
social safety net
The expansion of export
markets and the
commercial integration
with the World (FTA’s)
Construction of
strategic infrastructure
Better regulatory
environment
A sound
Macroeconomic
Administration driven
by fiscal and monetary
prudence
A public administration
driven by results
The consolidation of an
innovation agenda
leaded by an
improvement in
education
A well capitalized
financial sector and the
constant expansion of
financial services
Today countries like Panama,
Dominican Republic, Costa
Rica, Salvador, Guatemala,
Honduras, Paraguay, as well
as most of the Caribbean
States, are following that line
of behavior

28. The two regions
 The regional current Political
But not all the socio-economic models are a success story…
Map is a “Tale of two cities” like
the Charles Dickens Book… (The
ALBA ALBA and the non Alba Model)
(Leaders: Venezuela,
Ecuador, Bolivia, Nicaragua
and Cuba)
Anti-U.S.
Anti-Free Trade
Lack of investment
Confidence
Weak institutions
Political Insecurity
Ideology driven countries
Political Polarization
Modern Democratic Center Countries (Brazil,
Colombia, Peru, Chile, México, Uruguay,
Paraguay, Panamá, Republic Dominican,
Costa Rica, etc)
Cooperation with the U.S.
Pro Free Trade
Investment Confidence
Independent Institutions
Political Stability
State Long Term Policies
and Mgt by Results
Organized Party Systems
The Democratic Center takes the lead:
• Investment grade countries are in this Group: Mexico, Brazil, Chile,
Colombia, Peru and Panama
• Countries with more market access through FTA’S are in this group
• Countries with more FDI are in this group
• Countries with more Middle Class Expansion are in this group
• Better fiscally sustainable social programs: Chile, Mexico, Brasil and
Colombia
Only the group of Countries in the Democratic Center will
become the regional active participants of the Emerging
Markets Boom…some of the ALBA Members will see some
benefits, but without solid long term development
agendas, they will face transitory profits…

29. The Alba failure
Bad policies are deteriorating the political and economic context in the ALBA
Countries….
Venezuela
Inflation
Reduction in oil production
Brain drain
Social conflict
Insecurity
Private initiative in
Jeopardy
Bolivia
Loss of citizen support
Quality of live
deterioration
Lack of private initiative
Loss in private investment
Ecuador
Press Liberties in danger
Lack of long term private
investment
Political stability at the
expense of higher tensions
Oil driven political power
Nicaragua
Institutional deterioration
(Reelection without
constitutional authority)
Corruption
Private initiative:
Uncertainty
Shameful Chavistas

30. The regional challenges
Despite the changes that have been achieved some important challenges remain…
Building Modern
Democracies
(5 parameters)
Security
Freedoms and Private
Initiative
Independent Institutions
Social Cohesion
People Participation
A dynamic
Economic
transformation
Investment Target Policies
Maintaining Fiscal and
Monetary transformation
Integrate commodity and
knowledge based economies
Expand export markets
Create an Entrepreneurship
culture (Innovation agenda)
Closing Social
Gaps
Improve education (quality,
coverage, vocational)
Insure Universal Healthcare
Formal Job creation
Access to Finance
Climate Change,
Environment and
Energy
Sustainability
Expand renewable sources
Install an energy efficiency
conscience
Improve waste management
Protect the Amazon Ring
Reduce Co2 Emissions

31. Colombia’s great opportunity
Colombia has conditions that make the country a stable, credible and profitable investment destination
Institutional
Stability
Political Center
prevent radicalism
and populism
Economic Policy has
been stable,
credible and
transparent
Pacific Alliance
emerges as an
opportunity
Stable trade with
new partners
through FTA’s
Investment grade Low risk perception
Solid financial
system
Fiscally viable social
agenda
Governance
guaranteed by
institutional
independence

32. www.alvarouribevelez.com