NO OPPORTUNITY LOST
TBY talks to Mauricio Cárdenas, Minister of Finance and Public Credit, on budget cuts, Colombia's competitiveness, and joint strategies within the Pacific Alliance.

BIOGRAPHY
Mauricio Cárdenas has been the Minister of Finance and Public Credit of the Republic of Colombia since September 2012, having served as the Minister of Mines and Energy in the Santos administration. Between 2008 and 2011, he was the Director of the Latin American Initiative of the Brookings Institution in the US. He earned his master’s and PhD in economics from Universidad del los Andes in Bogotá, Colombia, and from the University of California at Berkeley, respectively. He has held numerous teaching positions and published many books and academic articles on subjects related to the Colombian economy.How do you expect the new budget to affect the country's economic position?
Oil played an important role in 2013, representing 20% of government revenues in 2013; in 2016, the oil industry will only represent around 2%. We have implemented a tax reform that increased the tax contribution from companies. We also cut public investment and had a slightly higher fiscal deficit. This represents a strong response to the drop in oil prices. The budget for 2016 has seen cuts in several areas. We have tightened our belts, accounting for around 1% of GDP without impacting social and infrastructure expenditure. We refer to these policies as intelligent austerity. This means a cut in the budget, but having clear priorities such as continuing to reduce poverty levels and maintain growth rates. In 2015 we had growth above 3% and we expect to continue at this level in 2016
How will tax reform take shape in 2016?
In 2014, Colombia implemented a tax reform that raised taxes for companies. We recently organized a commission of independent experts to comprehensively revise the tax system in the country. The objective is to make the system more equitable and more competitive. The commission recently finished its report, and we expect to implement a tax reform in the country. One of the key ideas behind this reform is to reduce the tax burden on companies to a manageable level.
How do you expect FDI and exports to develop in 2016?
One of the mechanisms we had in place to accommodate the fall in oil prices is the flexible exchange rate. Colombia has not interfered in the forex market, which led to a devaluation of the Colombian peso against a stronger dollar. This enables us to develop sectors like agribusiness and tourism, as a higher exchange rate makes our exports more competitive. This situation varies from that of dollarized economies or economies that are strongly dependent on the US dollar. Devaluation will also bring long-term results due to the fact that companies' investments take time to demonstrate results. All in all, this devaluation and low oil prices will help Colombia diversify its economy and increase the competitiveness of our exports.
What is your overall assessment of your term in office?
Colombia is one of the fastest-growing economies in Latin America in 2015 and this is thanks to the programs we implement to boost economic activity. This is a major achievement within a year in which oil prices dropped—we need to keep in mind that 50% of our exports come from the oil industry. This has been made possible thanks to trust and the focused social expenditure. We implemented several programs to prioritize social investment and expenditure, and these have paid off.
What joint strategies should Pacific Alliance countries implement to boost economic growth in the region?
We are transitioning from one phase to another in the Pacific Alliance; we achieved commercial integration and now are working on financial integration. We have implemented FTAs and agreements to encourage the flow of services between the countries, and now want to achieve a higher integration of financial markets. In this context, we have taken steps to achieve a higher integration of our stock exchange markets. We also want to boost investment and traveling of investors among these economies.
What goals does the ministry aim to achieve by the end of President Santos' term in 2018?
We would like to see a very solid economy with strong growth rates and a long-term vision. I would like to see a more diversified economy—a Colombia that is part of the OECD in which extreme poverty stands below 5%. I hope to leave a country in which the bond credit rating is BBB+. We need to achieve peace, because with peace Colombia will boost growth by 1-1.5%.

TABLE OF CONTENTS
Interview
Bruce Mac Master, President, National Business Association of Colombia (ANDI)
TBY talks to Bruce Mac Master, President of the National Business Association of Colombia (ANDI), on tackling obstacles to competitiveness in the economy, participating in the global value chain, and the impact of the currency devaluation.
read articleFocus: Bank Expansion Abroad
Fortune Favors the Brave
Colombian banks have greatly expanded their operations in Central America in the last decade. The dramatic growth of the middle class and the internationalization of the Colombian economy has propelled growth. The market has shaken the shackles of the large players who used to dominate the market, with smaller institutions expanding and widening their coverage across the region.
read articleInterview
Mauricio De La Mora Rodríguez, Former President, National Hydrocarbons Agency (ANH)
TBY talks to Mauricio De La Mora Rodríguez, Former President of National Hydrocarbons Agency (ANH), on promoting investment, gaining knowledge of offshore activities, and the short-term outlook.
read articleInterview
Eduardo Jaramillo Cuervo, President & CEO, General Electric (GE)
TBY talks to Eduardo Jaramillo Cuervo, President & CEO of General Electric (GE), on the role GE intends to play in developing Colombia's energy value chain and creating a diversified matrix to support the country's energy needs for years to come.
read articleInterview
Adriana Lucia Falla, General Manager, SoftManagement S.A
TBY talks to Adriana Lucia Falla, General Manager of SoftManagement S.A., on the important elements of the company's business, its key strengths compared to its competitors, and the significance of the IT sector in Colombia.
read articleInterview
Juan Martin Caicedo Ferrer, Executive President , Colombian Chamber of Infrastructure (CCI)
TBY talks to Juan Martin Caicedo Ferrer, Executive President of the Colombian Chamber of Infrastructure (CCI), on the future of infrastructure in the country, challenges, and the role of SMEs.
read articleFocus: 4G Generation
Motoring Toward Development
Colombia is looking toward the future and improving its transportation network by renewing road infrastructure, putting an end to the nation's underdevelopment in roads and highways. The government estimates that in the next four years the 4G program will dramatically enhance the Colombian economy, shortening traveling time between cities and, consequently, reducing transportation costs.
read articleFocus: Coffee
Morning Joe
Colombian coffee has an incredible reputation for its aroma, taste, and purity, which is why it is considered one of the best quality coffees in the world. This belief has not changed despite the entrance of huge producing countries such as Ethiopia, Brazil, and Vietnam into the market.
read articleReview: Education
Gold Star For You
In recent decades, Colombia made changes to nearly every level and aspect of its education system and has been exceeding the expected results, putting the country on the right track to achieve the president's goal of becoming the best educated country in the region.
read articleReview: Tourism
It's Not Magic
A reputation for violence had for many years stunted the growth of Colombia's tourism sector. But now that the country has enormously improved its image abroad, there is little to prevent it from becoming one of the most ideal destinations in Latin America.
read article