What is ANDI's contribution to the Colombian economy?
Not only is ANDI an industrial association, it is also a business association of entrepreneurs. ANDI contributes to 50% of the GDP in approximately 30 different sectors in commerce, while it also represents many other businesses such as banks, insurance companies, and lawyers. In many ways it is the association for the private sector. The association began as an industrial association, and I joined the association during a challenging time as industrial activity in the country was falling dramatically.
In 2015, ANDI published the book Strategy for a New Industrialization. What steps does this book suggest Colombia take to pursue reindustrialization?
One of the topics this book covered was how to solve obstacles to competitiveness created by infrastructure, taxes, and permits and licenses, and how to promote social dialogue. We believe in social dialogue; however, we need extremely clear and strict rules about how companies should deal with specific issues. There are many things that have occurred as a result of the way the market was designed, in terms of free trade agreements (FTAs) for example, which are not completely balanced. The book also recognizes the fact that economies can no longer only focus on increasing exports and that global markets are shifting toward value chains.
How important is it to link Colombian companies to global value chains?
Without an awareness of global value chains, comprehensive success is not possible. It is necessary to identify the appropriate global value chains and make strategic decisions as a country in order to be competitive and attractive in the eyes of major corporations. The national industrial sector has to decide where to be active. In our book, we propose that Colombia be the global leader in food and agriculture, for a variety of reasons. We have the land, the people, the water, the climate, and the big companies. The market is large enough to provide companies with the initial support to start working and expanding, and then start exporting to the rest of the world.
What do you predict will be the medium-term impact of the currency devaluation?
The most significant aspect of the devaluation is that we are still recovering from the exchange rate we had in 2003—at that time the rate was COP2,900 to the dollar, and we are just returning to that range. Colombia has a free and open market, which allows the exchange rate to float and respond to supply and demand. Recovering that exchange is definitely a huge opportunity. It gives us 40% competitiveness in terms of international pricing. We have learned many things; for example, over the past decade it was said that Colombia had the most expensive energy on the continent, which was only partially true, and it was because we had an uncompetitive exchange rate. Now, we have the second cheapest labor costs and the second cheapest energy cost, and the current situation is a return to the natural equilibrium for the economy and competitiveness.
What are you expectations for the economy in 2016?
The years 2015 and 2016 will both be transition years. We have to take advantage of the fact that the global economy is on hold by making all the reforms that we need to implement. We have to be prepared in terms of infrastructure and the tax system. This is the agenda we proposed to the country and the government and they have adopted it, creating a large matrix and naming every involved ministry for each activity.