Colombia 2016 | ECONOMY | INTERVIEW

TBY talks to Guillermo Botero Nieto, President of Fenalco, on the company's contributions, the effects of FTAs on Colombian commerce, and his expectations for the economy.

Guillermo Botero Nieto
Guillermo Botero Nieto is President of Fenalco. He is a lawyer from the University of the Andes and is a former teacher at the same college. An entrepreneur with extensive experience, he has business experience in the areas of foreign trade, logistics, and parallel operations. Botero assumed the role of chairman of Fenalco in November 2003 and has been a member of its board since 1985.

2015 was the 70th anniversary of Fenalco's establishment. How has the organization contributed to Colombia's economy?

We have played an important role and have always been a positive player for the country over the years. Fenalco has helped to develop many important sectors of the economy, such as financial, transport, security, and industrial companies.

Fenalco covers many sectors of the economy, but which sectors does the company represent most?

We have a strong presence in sectors related to commerce and services, with more than 18,000 affiliated companies and members, constituting 18 macro sectors. In the automotive sector, there are many players such as distributors, sellers, dealers, and garages. We also have large supermarkets as well as small ones, which demonstrates our strength in the retail trade; it is a long chain that does not end.

How do you assess the performance of commerce in Colombia in 2016?

I expect 2016 to be a difficult year for the Colombian economy. It is difficult to estimate how much commerce will contribute to GDP; however, in 2015 commerce contributed a significant amount to economic growth and we are satisfied with its performance.

Do you think that the devaluation of the Colombian peso can help promote a stronger industry and commerce?

Generally, the devaluation will slow the economy, because Colombia is a country that imports many commodities or it is an intermediate goods importer. The amount of imported fast moving consumer goods has already fallen.

In the last few years, Colombia signed several FTAs with different countries. What effect have these agreements had on Colombian commerce?

The treatments are economic, political, and geopolitical instruments. It is known that countries with open economies grow more than closed ones. It is necessary to take advantage of those FTAs and try to find sellers and businesses beyond our borders because this will reinforce the national commerce industry. Now is a good time, with the devaluation of the peso, to go out and conquer other markets or to recover old markets that were lost.

How big is smuggling in Colombia and how does it affect the national economy?

It is difficult to measure; however, official figures estimate that it is valued around $6 billion, which is 10-12% of Colombian imports. Smuggling occurs in some of the most sensitive markets that have high import restrictions, such as footwear, liquor, cigarettes, fabrics, or auto parts. With 46 million inhabitants, Colombians consume 2.5 pairs of shoes per capita annually, which is around 120 million pairs. If Colombian production levels can only satisfy 60 million pairs, the country has to import another 60 million pairs.

How do you expect the economy to perform in 2016?

I expect that 2016 will be a calm year, with a growth between 2% and 3%; however, for us this is low in comparison to previous years. For Colombians, to grow less than 3% is painful and we consider it a crisis. I do not view it as a crisis; however, it is true that some sectors, such as automotive and home appliances, have suffered falls.