International Allies
Bogotá, April 2023
CONTENT 1.
As a U.S.-based technologist and entrepreneur, I was delighted to receive an invitation to present at the Bogotá Chamber of Commerce (BCC) and the ICC World Chambers Federation (WCF) conference in Bogotá on March 1, 2023. I saw the invitation as a unique opportunity to sit with a global community of business leaders, all exploring how a global ecosystem allows innovation to occur across borders.
I am grateful that I was able to participate as it did not take long to realize that I would be meeting people from all over the world from the Americas and Europe to Africa, the Middle East, and other parts of Asia. The fact that I could share my experience in creating exponential technologies which are milestone technical achievements, like the first moon landing, the introduction of mobile phones, the proliferation of the internet, and in my case, development of the first autonomous navigation systems for self-driving cars—with these leaders inspired me to look at opportunities for innovation in other parts of the world.
Eric Aguilar Co- Founder and CEO of Omnitron Sensors
So, how do you create an environment that fosters innovation? In my mind, it’s not a single achievement or even a single idea. Rather, I see innovation as a three-part process. The first is to embrace curiosity, the spark of innovation. The second is to cultivate a high tolerance for risk because innovation is a product of change and change is always riskier than keeping things the same. The third is the need to navigate the external challenges that your organization will face as you introduce exponential innovations to the market.
Innovation is not merely the result of technological advancement. It is realized through policy that allows us to break barriers between countries. It is supported by political systems that welcome inventions that will transform the ways we live, from using fully autonomous cars and smartphones to monitoring our environment or even our own physical biology.
Attending the World Chambers Federation conference in Bogotá allowed me to open doors to places that I wouldn't have imagined before. And I felt energized by so many of the discussions into which I was welcomed. How can the global business ecosystem support those communities that do not already have an innovation hub? How can we share our experiences, and learn from the experiences of others, as we work collectively to introduce exponential technologies to the market?
This was a remarkable experience. I was able to engage with international leaders, all working together to knock down the barriers to the growth of global commerce.
I will continue to treasure the new friendships that I built during the ICC World Federation Chambers Federation, hosted by the Bogotá Chamber of Commerce, and I look forward to continuing my relationship with these organizations.
2. GOOD NEWS ABOUT COLOMBIA AND BOGOTÁ
NATIONAL GOOD NEWS
• Durante - During an official visit to the US, the President of the Republic met for the first time with President Joe Biden last Thursday, April 20th . Among the topics discussed by the two presidents were the support of the United States, through an investment of USD $500 million for the Amazon Fund, in the fight against climate change, as well as the need to move towards an economy without coal and oil, and efforts to combat drug trafficking and the historic levels of migration in the hemisphere. For more information, please visit the following link
• There will be direct flights between Colombia and Switzerland. On April 12th, the Colombian Embassy in Switzerland announced that the airline Edelweiss Air will have direct flights in Zurich - Bogota - Cartagena, which would start in November of this year. For more information, please visit the following link.
• Colombian and U.S. Customs signed an agreement to boost foreign trade between the two countries. On April 17th, the Colombian Directorate of National Taxes and Customs (DIAN) and the U.S. Bureau of Customs and Border Protection (CBP) signed a Mutual Recognition Agreement (MRA) between the Authorized Economic Operator (AEO) programs of Colombia and the U.S. Customs Trade Partnership Against Terrorism (CTPAT) in Boston, Massachusetts. This agreement is expected to make Colombian products more competitive and will allow AEO companies to positively impact the more than USD 14 billion that the country currently exports to our main trading partner. For more information, please visit the following link
• The Colombian government appointed new ambassadors to Portugal, Ecuador, Jamaica, Trinidad and Tobago and the Dominican Republic. On April 12th, President Gustavo Petro appointed Colombia's new ambassadors in these countries, and assigned them specific tasks to increase integration between these nations and Colombia on important issues such as energy transition and the opening of clean energy sources for the country, as well as the promotion of tourism, among others. For more information, please visit the following link link.
GOOD NEWS ABOUT BOGOTÁ, REGION
• From April 18 to May 2, the International Book Fair of Bogota - FILBo will be held, which in its 35th edition, has Mexico as guest of honor. The FILBo, organized by the Colombian Book Chamber and Corferias, a subsidiary of the Bogota Chamber of Commerce, this year has a literary, cultural, academic, and professional program that brings together all the actors in the book chain in the country, along with Mexican publishers, distributors, and booksellers, who come to the Fair with a sample of their culture and publishing production for all visitors. For more information, please visit the following link
• Smart City Expo, the leading international event in smart cities, comes to Bogota from May 31 to June 2. Smart City Expo Bogota, promoted by Fira Barcelona International and driven by the leading international event Smart City Expo World Congress, in alliance with the Mayor's Office of Bogota, the Bogota Chamber of Commerce and Corferias, brings together experts in smart cities who will share ideas, knowledge and solutions on how to bring smart and sustainable development to cities and the people and communities that inhabit them. Under the slogan Cities that Care, Cities that Innovate, the event aims to position cities as catalysts for the connection between the quality of life of their citizens and urban innovation. For more information, please visit the following link.
• Bogota Alto Impacto, a strategy with which the Colombian capital will seek to promote micro and small companies that develop ideas with a high potential for innovation or that have a high potential to reach international markets. The Office of the Mayor of Bogota, together with Invest in Bogota, a subsidiary of the Bogota Chamber of Commerce, presented this strategy, which will accelerate the flow of ideas and encourage innovation processes in the city's business fabric by strengthening organizational capacities, co-financing innovation plans, access to financing and connection with international markets. The program has three pillars:
1) business strengthening, through which the design of innovation management plans will be accompanied to improve the productivity of companies;
2) co-financing of specialized services for the implementation of innovation plans; and 3) connection to international markets to facilitate the expansion of businesses with Softlanding and Go to market strategies. For more information, please visit the following link.
3. BCC NEWS AND UPCOMING EVENTS
• As of March 31, 2023, a total of 495,799 businessmen and businesswomen renewed their commercial registration at the Bogota Chamber of Commerce. The total number of renewed productive units registered an increase of approximately 3% with respect to the same renewal period in 2022, which reflects business confidence in the economic development of Bogota and its region. For more information, please visit the following link
• The first international market diversification and product matching mission of the year by the Bogota Chamber of Commerce (BCC) was successfully completed. The first of these missions organized by the CCB, together with the Swiss Import Promotion Program (SIPPO), took place from March 27th to 30th within the framework of the Incosmetics 2023 international fair held in Barcelona, Spain. Our cosmetics and wellness cluster participated in this mission, together with six companies from the natural ingredients sector for the cosmetics industry in Bogota, which were able to identify gaps, validate the potential of their products, review international market requirements, establish contacts, and strengthen their businesses for the future through international relations.
• Bogota Fashion Week - BFW, the Bogota Chamber of Commerce's (CCB) commitment to strengthen the fashion sector, is back. This year, in its sixth edition, BFW will be held from May 10th to 12th at Ágora BogotáConvention Center, a space where 110 Colombian brands will exhibit their latest collections and participate in retail and wholesale spaces. With this event, the BCC seeks to consolidate the city as the international capital of fashion through concrete actions such as advice, consultancy, and support throughout the year for entrepreneurs in the fashion sector. For more information, please visit the following link
• I am Sustainable", the first event of the Bogota Chamber of Commerce focused on sustainability for entrepreneurs and businessmen. On May 3rd and 4th, in our Salitre headquarters, we will hold the event Soy Sostenible, an event beyond the figure of Benefit and Collective Interest Companies (BIC), where you will learn about the different fronts of sustainability and the offer we have for entrepreneurs and businesspeople. For more information, please visit the following link.
• The First National and International Congress of Women in Law: Women in Law, organized by the Arbitration and Conciliation Center of the Bogotá Chamber of Commerce, was successfully concluded. This initiative, which promoted dialogue and disseminated the work and opportunities for women in the legal sector, took place between April 11th and 12th The event was attended by more than 500 women leaders in the sector, 8 entrepreneurs and more than 13 meetings. For more information, please visit the following link
4. ECONOMIC OUTLOOK
4.1. GROSS DOMESTIC PRODUCT (GDP)
Colombia presented growth of 2.89% compared to the same quarter of the previous year, a decrease of 8.44 percentage points compared to growth in Q4 of 2021. In the case of Bogota, growth was 4.67%, a decrease of 7.87 percentage points compared to the same quarter of the previous year.
In terms of annual variation, Colombia's GDP grew 7.5% in 2022 with respect to 2021, a decrease of 4.5 percentage points with respect to the previous year. Furthermore, Bogota's GDP grew 9.9% in 2022, which is equivalent to a decrease of 1.3 percentage points with respect to the previous year.
4.2. INFLATION
In Colombia, the monthly price variation in March 2023 was 1.05%, indicating a slight increase compared to the 1.0% recorded in March 2022. On the other hand, the annual price variation increased significantly, from 8.53% in March 2022 to 13.34% in March 2023, indicating high cumulative inflation over the last year.
In Bogota, the monthly price variation in March 2023 was 1.04%, which represents a significant increase compared to the 0.76% recorded in the same month of the previous year. In addition, the annual price variation in the city increased from 7.34% in March 2022 to 13.26% in March 2023.
The data also show that the year-over-year variation in Colombia and Bogota in March 2023 remained on the rise compared to the same month of the previous year. In Colombia, the year-over-year change in prices increased
Graph 1. Annual GDP growth rate, by quarter, between 2019 and 2022 Colombia and Bogota Source: DANE – SDDE.from 4.36% in March 2022 to 4.56% in March 2023, while in Bogota it increased from 4.02% in March 2022 to 4.86% in March 2023.
4.3. LABOR MARKET
At the national level, the unemployment rate in February 2023 was 11.4%, 1.5pp lower than in February 2022; likewise, the employment rate has increased 0.63pp in the last year, reaching 56.5% in February 2023. However, the overall participation rate decreased by 0.41pp, from 64.2% in February 2022 to 63.8% in February 2023, which may be since the number of people of working age is continuously increasing, but many decide not to participate in the labor market.
Source: Gran Encuesta Integrada de Hogares - GEIH (DANE), febrero
In the case of Bogota, the unemployment rate was 12.9% for the mobile quarter Dec 22 – Feb 23, 1.1pp higher than the national unemployment rate for the same period; for the same quarter, the capital shows an employment rate of 58.7%, 2.2pp higher than the national employment rate for the same quarter. The data show that although more people of working age are participating in the labor market in the capital (65.5%) than in the country (63.6%), unemployment is also higher than the national average.
The number of employed people has grown by 552 thousand people from February 2022 to February 2023, likewise the number of non-employed people decreased by 11.4%, which means 365 thousand less people in a condition of non-employment. The outlook for the number of employed persons is multiple, since it is expected that economic growth in 2023 will be lower than in 2022.
Regarding labor market figures differentiated by sex, in February 2023 the gap in the unemployment rate between men and women was 6.41pp, 018pp more than in the same month of 2022, so it is worrying that the gender gap has increased in the last year. Finally, it is important to highlight that for both men and women the unemployment rate decreased compared to February 2022, but the overall participation rate in February 2023 was much higher for men than for women, while the GPR for men was 75.9%, for women it was only 52.5%, so there are still many challenges regarding the inclusion of women to participate in the labor market.
5. EVOLUTION OF FOREIGN TRADE EXPORTS
Annual variation data for exports from Colombia, Bogota and Cundinamarca show a variable behavior throughout the period 2021-2023, a significant increase in exports can be observed from March to November 2021, with figures above 30% in some cases. However, as of August 2022, there is a downward trend that continues until February 2023.
Bogota and Cundinamarca show different behaviors compared to Colombia in general. In the case of Bogota, export figures in February 2022 stand out, with a growth of 84.42% compared to the same month of 2021. However, as of August 2022, there is a downward trend that continues until February 2023, with a decrease of 24.47% compared to February 2022.
On the other side, Cundinamarca presents a more stable behavior compared to Bogotá, although a decrease in export figures is observed as of August 2022, in February 2023, Cundinamarca presented a growth of 16.48% compared to February 2022.
Source: DANE, Comercio internacional.
Colombia experienced a slight increase of 0.01% in February 2023 compared to 42.99% in the same month of 2022, in February 2021 exports were $2,939 million dollars FOB, for the same month of the following year, 2022, the figure increased to $4,202 million dollars FOB, which represented a positive variation of 42.99%. As for February 2023 exports, Colombia reported a figure of US$4,203 million FOB.
Regarding exports from Bogota in February 2021, the figure was $195.35 million dollars FOB. For the same month of the following year, 2022, the figure increased significantly to $222.47 million dollars FOB, representing a growth of 13.89%. In February 2023, exports from Bogota increased by 44.36%, amounting to a figure of $321.16 million FOB.
Graph 2. Annual variation of Colombian exports in Bogota and Cundinamarca 2021-2023Cundinamarca's exports for February 2021 were $121.41 million dollars FOB, in February 2022, the figure increased to $190.80 million dollars FOB, representing a growth of 57.15%. By February 2023, exports from Cundinamarca grew by 32.30%, reaching $252.43 million FOB.
In February 2023, the Bogota-Cundinamarca region recorded total exports of $1010.61 million dollars FOB. The United States is the main destination of the region's exports with a value of $389.03 million dollars FOB and a share of 38.49% of the total. Mexico and Ecuador are in second and third place, respectively, with exports of US$80.58 and US$68.55 million FOB and shares of 7.97% and 6.78% each.
Peru is in fourth place with exports of US$45.47 million FOB and a share of 4.50%, followed by China and Chile with exports of US$31.92 and US$31.06 million FOB and shares of 3.16% and 3.07%, respectively. The Netherlands and Argentina are in seventh and eighth place, with exports of US$23.78 and US$23.77 million FOB and shares of 2.35% each. Japan and Guatemala complete the top ten export destinations with exports of $23.48 and $21.15 million FOB and shares of 2.32% and 2.09% each.
IMPORTS
As of February 2023, Colombia's total imports recorded a value of $5,529.7 million CIF dollars, representing a decrease of 8.61% compared to the same month of the previous year. The city of Bogota is the main entry point for imports into the country, with a value of $2,933.7 million CIF dollars, equivalent to a 53.1% share of Colombia's total imports, and an increase of 3.3% compared to the same period of the previous year.
For its part, Cundinamarca recorded an import value of US$424 million CIF, representing a decrease of 25.76% compared to the same period of the previous year. Likewise, the Bogota-Cundinamarca region recorded an import value of US$3,357.6 million CIF, representing a decrease of 1.56% compared to the same period of the previous year, and a total participation of 60.7% with respect to Colombia's total imports.
An analysis of the import data for the different regions of Colombia shows the importance of the city of Bogotá as the main entry point for imports into the country, which underscores the need to maintain adequate control of import activities in this city. On the other hand, a decrease in the value of imports is observed in both Cundinamarca and the Bogotá-Cundinamarca region.
Total imports of the Bogota-Cundinamarca region as of February 2023 had a value in CIF dollars of $3,357.61 million. The top five countries with the largest shares in the region were the United States, China, Brazil, Mexico and Germany, with import values of $1,115.89 million, $716.08 million, $233.94 million, $156.65 million and $134.90 million CIF dollars, respectively.
6. FOREIGN DIRECT INVESTMENT
According to the Colombian Ministry of Trade, Industry and Tourism, Foreign Direct Investment (FDI) stood at US$ 2,852 million in the accumulated total for the year to March. This represents an increase of 25.3% over the same period (January-March) of the previous year.
Investment in the oil and mining sector amounted to US$2.215 billion in the January-March period, an increase of 33.5% compared to the same period of 2023. As for sectors other than oil and mining, FDI amounted to US$637 million in the accumulated period to March, presenting an increase of 3.4% compared to the same period of 2022.
In the first quarter of 2023, FDI in other sectors (other than oil and mining) accounted for 22.3% of the total. FDI in the mining and energy sector accounted for 77.7% of the total.
Graph 3. Imports from Colombia, Bogota, and Cundinamarca in the period February 2022 – 2023 Source: DANE, Importaciones.
Graph 4. Foreign Direct Investment. January – March (2015-2023)
Source: Banco de la República-Balanza cambiaria en Ministerio de Comercio, Industria y Turismo March 2023
7. SOURCES
• For more information, please refer to the Bogota Chamber of Commerce´s economic observatory. https://www.ccb.org.co/observatorio
• DANE. Cuentas Nacionales. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-portema/cuentas-nacionales/cuentas-nacionales-trimestrales
• DANE. Mercado Laboral. Información recuperada de: https://www.dane.gov.co/index.php/estadisticas-portema/mercado-laboral/empleo-y-desempleo
• Registro Mercantil, CCB, 2019 - 2020 – 2021 - 2022. Recuperado de: https://www.ccb.org.co/Inscripciones-yrenovaciones/Matricula-Mercantil/Boletines-del-Registro-Mercantil/Boletines-ano-2021
• DANE. Encuesta Pulso Social. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-portema/encuesta-pulso-social
• DANE, Exportaciones. Febrero 2023. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-portema/comercio-internacional/exportaciones
• DANE, Comercio internacional importaciones febrero 2023. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-por-tema/comercio-internacional/importaciones
• Ministerio de Comercio, Industria y Turismo. Informes de Inversión Extranjera Directa. Recuperado de: https://www.mincit.gov.co/estudios-economicos/estadisticas-e-informes/informes-de-inversion-extranjera
• Observatorio de Desarrollo Económico de Bogotá. Recuperado de: https://observatorio.desarrolloeconomico.gov.co/expectativas/indice-de-confianza-industrial-vuelveterreno-positivo