Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

OECD - Organisation for Economic Co-operation and : Colombia's economic outlook is strong, but deep challenges remain, OECD says

01/31/2013 | 02:45pm US/Eastern

31/01/2013 - The Colombian economy is strong and the outlook is promising, but the country must do more to ensure that the ongoing commodities boom contributes to sustainable and inclusive growth over the long-term, according to the OECD's latest Economic Assessment of Colombia.

The Assessment, presented today in Bogota by OECD Deputy Secretary-General and Chief Economist Pier Carlo Padoan, Colombian Minister of Finance and Public Credit Mauricio Cardenas and Central Bank Governor Jose Dario Uribe, details the significant economic reforms enacted in recent years and their role in the country's resilience to the global economic crisis. It also highlights the key challenges facing Colombia as it seeks to bring about higher and more balanced economic growth - notably the need to adjust to the commodities boom, boost productivity and reduce income inequality.

"Commodity exports are booming, improved security is attracting new investment and confidence is on the rise, but there is still more to be done," Mr Padoan said. "The challenge is to ensure that the benefits of today's mining boom pays forward a better future for the next generation."

The OECD identifies  priority areas for action:

Adjusting to the commodity boom. The mining boom has triggered large swings in the real exchange rate and undermined the competitiveness of other tradable sectors - a well-known condition facing natural resource exporters known as "Dutch disease." Colombia has already enacted important reforms - including a credible inflation targeting regime, strong bank supervision, consolidation of public finances and a new royalty law - but additional adjustments would be welcome. Effective implementation of the new royalty law can result in more viable projects. Mining revenues can be used to fund improvements to the education system and the creation of high-quality infrastructure, both of which will improve Colombia's competitiveness. Promoting greater openness to trade, stronger competition and flexibility across the economy, in particular through labour market reforms, are important additional steps.

Reducing income inequality. Colombia faces high levels of income inequality and poverty, both of which are largely driven by unemployment and informality. Labour market reforms are needed to boost job creation and reduce the share of informal workers. This will require better educational outcomes and the reform of restrictive labour market regulations. The minimum wage should be differentiated by region, while  the high level of social security contributions and parafiscales, which  work against formal job creation, should be reduced. The tax system could also be made more progressive, through removal of exemptions that largely benefit the richest taxpayers. Raising additional revenues would also allow for the expansion of social programmes.

Boosting productivity and implementing further reforms to ensure sustainable growth. Government policy should seek to promote productivity across the economy, notably through the education and training system. Policies are also needed to further improve transport infrastructure, grow private investment, reduce barriers to entrepreneurship, improve access to finance and strengthen the rule of law, to ensure better contract enforcement and less corruption.

Further information on the Economic Assessment of Colombia is available at: www.oecd.org/eco/surveys/colombia2013.htm. You are invited to include this Internet link in coverage.

Journalists seeking further information should contact the OECD's Media Division: news.contact@oecd.org, +33 1 45 24 97 00.

distributed by
React to this article
Latest news
Date Title
11m ago Putin stands by hawkish Russian central bank - for now
17m ago CITIGROUP : Chile hires banks ahead of potential bond sale
17m ago ROSS STORES : Given New $95.00 Price Target at Deutsche Bank (ROST)
17m ago MYER : Receives "Hold" Rating from Deutsche Bank
17m ago BANK OF AMERICA : King Digital Entertainment PLC : Given New $16.00 Price Target at Deutsche Bank (KING)
17m ago GlobalCapital plc announces appointment of Group Financial Controller
19m ago HSBC : Jersey Finance bolsters business development team in Middle East
21m ago Rhode Island, New Jersey and Virginia High School Scientists Win Regional Siemens Competition at Georgia Institute of Technology for Research Solving an Open Math Problem and the Discovery of a Pharmaceutical Solution to Broad Spectrum Antibiotic Resistance
51m ago New York High School Scientists Win Regional Siemens Competition at Carnegie Mellon University for Research on Improving Reproductive Health Through Meiosis and Aortic-Derived Mesenchymal Stem Cells
54m ago RAS AL KHAIMAH PROPERTIES PJSC : RAK Properties awards Bermuda Villas to Al Tameer Group
Latest news
Advertisement
Hot News 
SNOOZEBOX : Providing Temporary Hotel For Premier Oil
FAIRFX : Taps John Pearson To Replace Co-Founder As Chairman (ALLISS)
MOL GLOBAL : ATTENTION MOL GLOBAL SHAREHOLDERS: Shareholder Rights Law Firm Johnson & Weaver, LLP Announces Investigation of MOL Global, Inc.
S&P 500 MOVERS : Gme, rost
FULLER SMITH & TURNER : Pub operator Fuller's first-half profit rises 8 pct
Most Read News
1d ago COMCAST : United States: Faulty Damages Model Leads To Partial Decertification
1d ago DUKE ENERGY : OUCC urges denial of Duke infrastructure plan
1d ago MERCHANTS BANCSHARES : Announces Appointment of Chief Executive Officer of Merchants Bank
1d ago HORNBY : Half Yearly Report
1d ago HERTZ GLOBAL : Appoints John P. Tague President And Chief Executive Officer
Most recommended articles
11m ago Putin stands by hawkish Russian central bank - for now
1d agoDJBig Homes Can Complicate Retirement
1d agoDJAfter a Good Start, Health Enrollment Faces Test
1d ago AVIVA : says will compensate customers sold wrong annuities
1d ago Albanian opposition rallies against tax, power burden
Dynamic quotes  
ON
| OFF