Download - LATIN AMERICA Regional outlook 2013
LATIN AMERICA REGIONAL OUTLOOK 2013
Alvaro Uribe Vélez
Issues to be addressed
1. The current context of Emerging Markets and
the evolution of Latin America 1980-2012
2. Latin America between two policy paths
3. The policy challenges in the region
4. Lessons from the Colombian Experience
1. The current context of Emerging Markets and
the evolution of Latin America 1980-2012
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
During the last three decades developing countries have experienced a profound transformation driven by two
components:
On the one hand a rapid demographic transition. Since 1980 the World population has increased by 2.5 billion people and 95
percent of that growth has taken place in the developing World
The other element has been a dynamic period of sustainable economic growth. In
1980 developing economies represented 33 percent of the World GDP and today that
number is closed to 46 percent
Emerging economies have become engines of economic growth
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
By 2050 19 of the top 30 economies by GDP will be countries that we currently
describe as ‘emerging’
China and India will be the largest and third-largest economies in the world
Eight countries – India, China, Brazil, Russia, Indonesia,
Korea, Mexico and Turkey –will be responsible for most of
global growth up to 2025
Emerging economies will account for 68% of global
growth by 2030
In 1980, 5% of goods were sourced globally. By 2000, this was 20%. By 2025, it will be
50%
In 1980, world exports accounted for one-sixth of global GDP. Today it is a
quarter. By 2030, it will have risen to a third
By 2030 the urban middle class will rise to 42% of the
global population. The number of people with daily income of
$10 to $100 a day will rise from 1.8 billion today to 4.9
billion by 2030
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
According to FAO: Demand for food could increase 50%
by 2030
Demand for water has been projected to rise by 30% between 2000 and 2030
The International Energy Agency has said energy
needs will grow by 40% by 2030
According to BP China represents 20.3% of the
World Energy Consumption (The world largest energy consumer in 2010 for the first time
over the U.S.)
Natural Gas consumption has experience its
strongest consumption rate since 1984 (7.4%)
Coal share in world energy consumption has reached its highest level since 1970 (29.6%). China represents
49% of the world coal consumption
In 2010 Global Biofuel consumption grew by
13.4%
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
How does Latin America fit in
this panorama? Between 1980
and today some changes have
occurred…
The inflation tragedy is over: in 1985 regional inflation
average was 159%, today is below 6%. This means that
fiscal and monetary prudence have become policy principles
Debt is no longer a threat: Debt to GDP ratios in the region have
passed from 40% in 2002 to 20.4% in 2011
Between 2003 and 2007 the region experienced a growth average of 5%...the highest since 1967-1974
Democracy has expanded in the region with few exceptions…
Regional exports have increased 160% between
2002 and 2011
In 2011 the region faced a record number in FDI reaching almost 160
US$billion
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
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
Policy Changes match four range of opportunities
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
Policies have been the root of Latin American Changes
The change process and the potential for the years ahead has
happen by accident and it 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
This group of countries have common characteristics that
explain their outstanding performance
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)
A public administration driven by results
A sound Macroeconomic
Administration driven by fiscal and
monetary prudence
Better regulatory environment
Construction of strategic
infrastructure
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, Belize, Paraguay, as well as most of the Caribbean States, are following that line of
behavior
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
1. The current context of Emerging Markets and the
evolution of Latin America 1980-2012
Despite the changes that have been achieved some important challenges
remain…
2. Latin America between two policy paths
2. Latin America between two policy paths
The regional current Political Map is a “Tale of two cities” like the Charles Dickens Book… (The
ALBA and the non Alba Model)
ALBA (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…
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
2. Latin America between two policy paths
Bad policies are deteriorating the political and economic context in the ALBA
Countries….
3. The economic outlook and the
policy challenges in the region
3. The 2013 economic outlook
After decelerating for two consecutive years, Latin
American economies accelerated growth again at
the end of 2012. Brazil’s recovery was an engine of
performance
The region’s growth averaged around 3.2% in
2012 after 4.3% in 2011 and 6% in 2010
Latin America will approach its potential rate in 2013,
remaining the world's second best performing
region after Asia
Chile reported lower annual growth, although the
economy reaccelerated to rates higher than its long-
term trend because of expansionary monetary
conditions
Colombia’s growth was below government
expectations reaching a 4.0% level
Due to the political transition, which generates temporary contractions the Mexican
economy began decelerating in the second half of the year
Brazil became the main contributor to Latin
America’s growth reduction in the past two years
Inflation was maintained on target with the excepctions of Mexico and Brazil, that
experienced marginal increases
The 2012 experience….
3. The 2013 economic outlook
Argentina
The country will face risks in 2013, although growth will improve in
comparison with 2012
Uncertainty will increase
Inflation will be around 25%
Public expenditure will be the driver of economic growth
Central Bank will continue to be the main source of funding for the Central
Government
Economy will grow 3.4% in 2013
Brazil
The economy experienced a small scale recovery at the end of 2012
The recovery will strengthen in 2013, boosted by investment for the 2014 World Cup, as well as the fiscal and monetary
stimulus package in place
The economy will grow 5% in 2013
Chile
Monetary conditions need to be stabilized before excess demand threatens
economic stability
Growth in 2013 will be around 4.3%
Inflation will remain on target
Source: World Bank
3. The 2013 economic outlook
Mexico
The deceleration initiated at the end of 2012 will extend over the first half of 2013, as a change in political
administration usually introduces a delay in the federal budget and private decisions on investment
The economy will grow only 3.5% in 2013 after 3.8% in 2012
Inflation is rising
Monetary tightening could affect growth performance
Great expectations are based on the new government reform agenda
Peru
The best performer with strong fundamentals and a well managed mining boom
Growth will reach 5.8% in 2013
Inflation will be between 1% and 3%
Venezuela
The fiscal deficit in 2012 reached troublesome levels, that will require cuts in 2013
Growth will be around 1.5% and 2%
Declines in the oil price could trigger a recession
Inflation will reach 30%
Source: World Bank
2009 2010 2011 2012e 2013f 2014f 2015f
Financial Flows
Capital Inflows 179.6 328.5 303.9 322.4 326.2 327.1 342.3
Private inflows, net 161.6 306.1 299.1 320.5 327.1 327.8 344.7
Equity Inflows, net 126.5 166.6 165.6 179.5 198.0 200.8 214.5
FDI inflows 84.9 125.3 158.3 167.3 182.4 176.3 184.2
Portfolio equity inflows 41.6 41.3 7.4 12.2 15.6 24.5 30.3
Private creditors, net 35.1 139.5 133.4 141.0 129.1 127.0 130.2
Bonds 45.9 72.9 85.2 95.1 72.2 57.7 60.2
Banks -1.7 21.7 51.7 41.4 42.7 45.2 51.4
Short-term debt flows -8.6 43.8 -3.0 4.3 12.7 23.4 16.5
Other private -0.5 1.1 -0.4 0.2 1.5 0.7 2.1
Offical inflows, net 18.0 22.5 4.8 1.9 -0.9 -0.7 -2.4
World Bank 6.6 8.3 -2.9 0.4 .. .. ..
IMF 0.4 1.3 0.2 0.1 .. .. ..
Other official 11.0 12.9 7.5 1.4 .. .. ..
3. The 2013 outlook
Regional Financial Flows
Peru
Humala Challenges
Maintain the highest
economic growth rate in
the region
Improve social expenditure
targeting
Improve Labor markets
• Combat informality
• Improve productivity
Continue with International insertion
• Implement the FTA with USA
• Pacific Agenda with Colombia, Chile and Mexico.
Challenges
Fiscal and Monetary Credibility
Institutional quality
Capacity to generate
confidence
Solve Public-Private
Conflicts
Lack of FDI long
term trust
Argentina
Security
Human Insecurity
Legal Insecurity
Political insecurity
Individual Liberties
Property rights at risk
Limit freedom of expression
Limit freedom of press
Independent institutions
Courts controlled by the Executive
Branch
Independent institutions are controlled by the Executive
father
One Party controls the Parliament
Citizen participation
Limited
Controlled
Instruments vital for political
pressure
Social Cohesion
Class polarization
Fiscal policy is unsustainable
Venezuela
ChallengesRegional integration
Urban security
Drug consumption
Cost of money
Infrastructure
Weak Doing Business Indicators
Foreign Policy
Brazil
The Challenges of Doing Business in
Brazil
Area: 8,514,877 sq km
Population: 203,429,773 (July 2011 est.)
GDP: $2.172 trillion (2010 est.)
GDP Composition by Sector:
Services: 67.4% (2010 est.)
Industry: 26.8%
Agriculture: 5.8%
Unemployment Rate: 6.7% (2010 est.)
Exports: $201.9 billion (2010 est.)
Export Commodities: Transport
equipment, iron ore, soybeans,
footwear, coffee, autos
Export Partners: China 12.5%, US
10.5%, Argentina 8.4%, Netherlands
5.4%, Germany 4.1% (2009)
Imports: $181.7 billion (2010 est.)
Import Commodities: machinery,
electrical and transport equipment,
chemical products, oil, automotive
parts, electronics
Import Partners: US 16.1%, China
12.6%, Argentina 8.8%, Germany 7.7%,
Japan 4.3% (2009)
Good results but there are some worriying “TO DO BUSINESS” indicators
Country DB 2011 DB 2010
Mexico 35 41
Peru 36 46
Colombia 39 38
Chile 43 53
Argentina 115 113
Uruguay 124 122
Ecuador 130 127
Brazil 127 124
Venezuela 172 170
Doing
Business 2011
shows some
elementes that
affect Brazil as
a destiny for
investments
(127 out of 180
in the Doing
Business
Report)
1. Bureaucracy
2. Weak Infrastructure
3. Weak Technology
4. Preference to Local Companies
5. Complex tax system
The Challenges of Doing Business in
Brazil
Brazil in comparison to the Region best and worst
performers
Indicator Brazil Chile Mexico Colombia Peru Venezuela
Starting a Business
(Proceadures)15 8 6 9 6 17
Starting a Business
(Days)120 22 9 14 27 141
Days for
Construction
Permits
411 155 105 50 188 395
Hours devoted to
pay taxes (Hours
per year)
2.600 316 404 208 380 864
Days to enforce a
contract616 480 415 1346 428 510
Enforcing Contracts
(Cost % Claim)16.5 28.6 32 47.9 35.7 43.7
Cost to export US$
per ContainerUS$
1.730
US$74
5
US$1.42
0
US$1.77
0
US$860 US$2.59
0
Brazil Infrastructure
challenges
Brazil’s infrastructure ranks
74th out of 133 countries,
even though its overall
economy ranks 56th,
according to a World
Economic Forum (WEF)
survey that asked firms to
rank global
competitiveness. Among
the BRIC economies,
Brazil’s infrastructure ranks
similar to India’s (76) and
Russia’s (71), but it lags
China’s (46). Within Latin
America, Brazil’s
infrastructure ranking is
near Mexico’s (69) and is
significantly better than
Venezuela’s (106), but it is
Infrastructure spending in Brazil has been in a
declining trend over the past 40 years,
averaging 5.4% of GDP during the 1970s, 3.6%
in the 1980s, 2.3% in the 1990s, and 2.1% in
the 2000s. Some studies suggest
infrastructure investment of 2.0% of GDP is
needed simply to sustain the current
infrastructure stock in Brazil
Brazil must invest 4% of GDP (doubling its
current investment) for 20 years to catch up
with Chile, the benchmark in Latin America,
according to our estimates
To catch up with South Korea — the
benchmark in Asia — Brazil would need to
invest 6–8% of GDP per year
Source Morgan Stanley
Brazil Infrastructure
challenges
Challenges for
infrastructure development
Improving the business environment. Brazil needs a more
stable and credible regulatory environment The main issues are:
1) regulatory bottlenecks, 2) excessive renegotiations of
concessions, and 3) the lack of efficiency of regulatory agencies
Rethinking fiscal priorities. The government needs to redesign spending strategies and rethink priorities by 1) addressing budget rigidities, 2) reducing mandatory earmarking in the budget, and 3) revisiting structural entitlements (i.e., social
security reform)
Reforming the tax system. The government intake is close to 40% of GDP, while companies
spend on average 2,500 hours per year to
prepare, file, and pay their taxes
Reform the Police Structure
Citizen participation in the fight against
organized crime
Strengthen intelligence
Border affairs
• Drug Consumption
• Assault Weapons
The security challenge
Mexico
Chile
Two situations
Characteristics
Economic Stability
Political Stability
Investor Confidence
Innovation and entrepreneurshi
p agenda
Quality of live and
opportunities
Youth distrust in Political
Parties and in Government
Aggressive protests
Dependant on the China effect
Ecuador
The political condition
Economic
4.5% Fiscal deficit
Oil price has been the driving force
Investors distrust
4.5% inflation
Political
The President has concentrated more powers
Since reelection and Chavez death Correa has been moving to
a moderate attitude
There is not a clear opposition figure
Urban security has been deteriorating
Bolivia: new problems arise
Economic
Populism platform loosing popular support
Fiscal superavit driven by more tax collections
Economic Growth above 4.6% driven by Gas price
Inflation close to 9%
Investors distrust with the exception of foreign governments
corporations
Political
2/3 of Congress controlled by the President Coalition
Hunting of all opposition leaders
Confrontation with Santa Cruz Governor Ruben Costas
Next week 56 Supreme Court Judges will be elected
International
Under the influence of Chavez
Improvement in the dialogue with the U.S.
International Market Distrust
Country Homicides
per 100K
Hab
Violence cost as %
of GDP (Live years
lost due to
handicapped
circumstances)
Private sector losses
due to insecurity (%
sales)
Violence costs
as % of GDP
Number of
gang
members
Number of
gangs
Honduras 43 1,31% 4.5% 9.6% 36.000 112
Guatemala 45 1.43% 3.9% 7.7% 14.000 434
El
Salvador
58 1.99% 4.5% 10% 10.500 4
Nicaragua 14 0.96% 3.1% 10% 4.500 268
Costa Rica 8 0.58% 3.6% 2.660 6
Panamá 11 0.63% 2.5% 1.385 94
Central America: The security Drama
Violence and organized crime
Not the same stories
A region of different development stories
The 7 giants (Brazil, Mexico, Argentina, Chile, Colombia, Peru
and Uruguay)
a) 70 of the Region population.
b) 85% of the Region GDP
c) Poverty reduction
d) High levels of investment
e) Commercial integration
f) Institutional stability
Central America
a) 3% of the Region GDP (US$163 Billion)
b) 7% of the Region population (43 million)
c) Income inequality
d) Moderate investment levels
e) Low tax collections
f) Fragile energy matrix
Caribbean
a) 4% of the Region Population
b) 2% of the Region GDP
c) Tourism dependence
d) Natural disaster risks
e) Low industrial base
f) Need for long term access to markets
The China effect…
Country China
Ranking as
a trading
partner
Porcentage
of total
exports
2011
Brazil 1 15%
Mexico 4 2.2%
Colombia 3 6.2%
Chile 1 16%
Peru 2 16%
Venezuela 2 7.9%
China’s influence as a trading
partner will continue to
increase, thus strenghthening
its political and diplomatic
relations with the regional
key players…
China is the destination for 10% of LatAm exports today, and is the
largest trade partner for Brazil and Chile. LatAm was also the largest
recipient of announced Chinese outbound investment in 2010, focused
on energy and mining
U.S-Latin America relations The evolution of U.S Latin America Relations…from Doctrines to specific
policies…Doctrines
Monroe Doctrine
Teddy Roosevelt “BIG STICK”
Howard Taft “Pan-American Union”
FDR “Good Neighbor”
Ike Pan American Operation
Alliance for Progress
Carter “Human Rights Agenda”
Reagan Regional Cold War
Bush “War on Drugs” and trade
Clinton “NAFTA” & “FTAA”
Objectives
Protect the region from foreign invasions and strengthen the U.S influence in the hemisphere
Exercise strategic control of the region applying hard power (Military interventions in Nicaragua, DR, Haiti, etc)
Build and institutional and permanent diplomatic coordination under the U.S Leadership
Regional support for World War II and coordination to face the Great Depression
Improve development assistance to prevent social turmoil (Creation of the IDB)
Improve development assistance to prevent the communist expansion.
Promote Human Rights policies to confront the emerging power of dictatorships in the region
Intervention in Nicaragua, Grenada and Panama
Fight against Drug Cartels in the region concentrated in Colombia, promotion of NAFTA and Unilateral Trade Preference Act
Enactment of NAFTA, promotion of the FTAA (1993) and the Andean Trade Preference Drug Enforcement Act
Policies
Bush Vs Obama and the FTA’s… (Next slide)
U.S-Latin America relations
Two administrations and its strategic approaches…
Bush:
1. FTA’s with Chile, Colombia, Peru,
Panama, CAFTA, DR
2. Actively supported the fight
against terrorism in Colombia
3. Promoted the Democratic Charter
in the OAS (Signed in Lima
September 11 2001)
4. Politicaly confronted anti-
democratic regimes in the region
5. Stablished the Millenium
Corporation.
6. Debt Relief for Bolivia, Nicaragua,
Honduras, Haity and Guyana
Obama:
1. FTA’s with Colombia and
Panama took almost 3 years to
be ratified.
2. Actively supported the fight
against terrorism in Colombia
3. Political diplomacy with anti-
democratic regimes in the
region.
4. Timid speech against Drug
Cartels in the region
5. Cautious attitude towards the
security crisis in Mexico and
the U.S share of responsibility
4. Lessons from the Colombian
Experience
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$2.377
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
Ten 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…
Colombia faced a 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
Building Confidence became our
priority
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
Our policy achievements generated a turning
point
Indicator 2002 2010
Homicides 28.838 7.400
Kidnappings 2.882 123
Homicides per
100K Habitants
69 16.3
Terrorist
attacks
1.645 250
Municipalities
without
mayors
presence
350 0
Municipalities
without police
158 0
Indicator 2002 2010
Average
Economic
Growth
2.1% 4.3%
GDP per
Capita
2.377 5.300
Invest %
GDP
16.5% 24.6%
Exports US$
11.000
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
Colombia’s current
challenges
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
Peace talks in Colombia
1. Defining peace: Colombian National Seal has two important concepts: Liberty
and Order
A peaceful country requires the right exercise of individual liberties and a general environment of institutional and social order
In 2002 Colombia lacked both Concepts: 28.000 homicides
2800 Kidnappings
1645 terrorist attacks
350 Municipalities without majors
Our Democratic Security Policy was built to restore institutional order and protect the exercise of individual liberties. It was a policy for peace not a policy for war. The great evidence is that by 2010 homicides were reduced 50%, kidnappings 80% and terrorist attacks by 90%
Peace talks in Colombia
2. Our Democratic Security Policy was based on Strong Hand and Big Heart We conceived Universal Demobilization for all members of illegal
armed groups
We confronted all illegal armed groups with the same determination and open the door for peace processes. Under clear conditions defined in the Peace, Truth and Reparation Law
The peace process with AUC was based on: Cease of illegal activities
International verification (OAS)
Incarceration
Anyone who did not cooperate or continued with illegal activities will lose the privileges and be extradited if any extradition request existed
No eligibility for those accused for crimes against humanity or crimes different than political delinquent practices
Peace talks with FARC
Prevent Big Failures today:
Negotiation without seizure of criminal activities
Negotiating Policy with weapons on the table clearly affects Colombian Democratic Values
Allowing political participation to individuals responsible for crimes against humanity is a wrong message for our democracy
No imprisonment
Allowing dictatorial regimes that affect liberties and support FARC, as guarantors is a bad signal
Peace talks in Colombia
The trust agenda with FARC The Government has consistently leaded an agenda to build
negotiation mode with FARC. The agenda includes: Tolerance with the Chavez regime (calling him a cause of
regional stability and dropping our denouncements at the OAS)
Drop of the US-Colombia military cooperation agreement
Declaring an armed conflict in Colombia
Passing a victim legislation that not only equals military officers with terrorists but also bails out by the state the reparation responsibility from FARC and other groups
Land Reform
Peace Framework Constitutional Amendment
Drug legalization proposal
Including Cuba in the Summit of the Americas
Abandoning any ideological or political link with the platform from our administration
Peace talks in Colombia
The Peace process that I would support:
What Colombia thinks
68% of Colombians are not willing to pardon crimes committed by
terrorist organizations
78% of Colombians are against no prison sanctions for terrorists
72% of Colombians are against political participation by terrorist
groups
My opinions
No impunity for crimes against humanity
Justice, peace and reparation
Immediate release of kidnapped people
Unilateral cease of criminal activities
My opinions
International verification of disarmament
No policy agenda on the table
Reinsertion agenda
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