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
Latest news
Date Title
<1m ago ARUBA NETWORKS : Launches First Enterprise-Grade Gigabit Wi-Fi Solution for All Outdoor Environments in the Middle East
1m ago The Top Cards for Teens, Announced by Creditnet.com
3m ago ACCREDITED BUSINESS CONSOLIDATORS : Securities and Exchange Commission Issues Order Regarding Accredited Business Consolidators Corp.
5m ago ANDY GRAY AND RICHARD KEYS : Premier League predictions - Week 9
5m ago J D WETHERSPOON : Rod Liddle: I don't care whether you're wearing a veil. I care what you believe
5m ago LONG LIFE : Alexander Chancellor
10m ago FIFTH STREET FINANCE : Intersection of Fifth Street and West Putnam Avenue
11m ago KUWAIT FINANCE HOUSE KSC : This day in Kuwait's history
20m ago KUWAIT FINANCE HOUSE KSC : Ma'aden Q3 net profit plunges 66%
20m ago BEOWULF MINING : Appoints New Chief Executive, Chief Operating Officer
Latest news
Advertisement
Hot News 
DIGITAL RIVER : Announces Agreement to be Acquired by Investor Group Led by Siris Capital Group for $26.00 per Share in Cash
EDREAMS ODIGEO : Statement responding to BA and Iberia statement
4IMPRINT : Full Year Expectations Underpinned By Strong Third Quarter
ATLANTIS RESOURCES : Raises GBP5.0 Million In Discounted Placing (ALLISS)
MERIT MEDICAL SYSTEMS : posts 3Q profit
Most Read News
1d ago MATSON : Shipping company pleads guilty in molasses spill
1d ago HEARTLAND EXPRESS : 2014 Q3 Earnings Release
1d ago APPLE : Time for all Apple products to enter China
10h ago PFIZER : Reports Vaccine Candidate Data
1d ago Fannie Mae settles shareholder lawsuit for $170 million
Most recommended articles
36m agoDJTHYSSENKRUPP : Denies in Talks to Sell Marine Systems to Rheinmetall
5h ago Russian government approves law to clamp down on offshore tax sheltering
5h ago Greybull Capital buys UK's Monarch
5h ago DEUTSCHE BANK LAWYER FOUND DEAD IN APPARENT NY SUICIDE : Wsj
7h ago Areva-Siemens raises claim to $4.4 billion over Finnish reactor delays
Dynamic quotes  
ON
| OFF