Bogotá Chamber of Commerce International Allies Newsletter #14

XIV COLOMBIA NEWSLETTER International Allies Bogotá, October, 2022

CONTENTS 1. Guest Columnist 2. Good news about Colombia 3. BCC news and upcoming events 4. Economic behavior 4.1.

4.2.

4.3.

4.4.

GDP Inflation Employment Business Dynamic

5. Evolution of Foreign Trade 6. Foreign Direct Investment 7. Sources

1.

Guest Columnist

I began my mission at the Costa Rican Embassy in Colombia in November 2020 amid the COVID-19 pandemic.

Despite the crisis that was causing in the Colombian business community, I admired the strength and capacity for innovation of the Colombian business community to overcome this predicament. Without a doubt, its strengths are many. Still, at that moment, I was surprised by the capacity to develop initiatives beyond the traditional sectors of its economy, being one of the countries in the region that has best “rebounded” after the pandemic, that has better inserted itself in the fourth industrial revolution, and that continues with an admirable vocation towards foreign markets. For this reason, I am proud to have worked closely with the Bogotá Chamber to increase business flow between our countries.

Costa Rica is also highly innovative, with free trade agreements reaching 50 countries worldwide and 2.5 billion consumers. It is also one of the best-interconnected countries in Central America. For this reason, Colombian companies of all sizes, from large companies such as Grupo Nutresa, or smaller ones such as Joyas El Edén, have chosen my country as the ideal destination for their investments and the attention of the Central American market and its 52 million inhabitants. Additionally, we work on taking advantage of two-way business opportunities in nontraditional goods and services such as architecture and sustainable design, structural wood, goods and services for technological laboratories, cardboard, agri-food, and of course, tourism. All this occurs within a free trade agreement that works without disputes. We hope that this healthy trade flow will be reinforced very soon with the entry of Costa Rica into the Pacific Alliance, for which we have initiated the accession procedure and requested Colombia's support.

Faced with Colombia's growing interest in investing in Costa Rica, added to the dynamism of the tourism sector between our countries, which has increased significantly after the pandemic, our capitals have seen their interconnection rocket, currently reaching more than twenty weekly flights. – with the possibility of increasing in the coming months. Thus, after the visit to Colombia in August by our president, His Excellency Rodrigo Chaves Robles, on the occasion of the change of mandate, he undertook - in a colloquium held at the Bogotá Chamber with the presence of more than 200 businesspeople - to facilitate and simplify the procedure for granting visas for businessmen and women, as well as tourists. Today, shortly after, we can announce good news. First, the granting of multiple-entry business visas will be extended (provided that the company is registered in Costa Rica), valid for up to 5 years, while currently, they are issued for one year. On the other hand, multiple-entry tourist visas valid for one year may be granted, as opposed to current visas, which are valid for only sixty days and suitable for one entry only.

The preceding, accompanied by a procedure for sending the application by digital means and a reduction in the documentary requirements demanded of Colombian men and women - in the process of being implemented - will not only increase the tourist flow but will also allow the business sector to remain in Costa Rican territory for a more extended period. At the same time, it will speed up the process for those who want to carry out business perspective exercises in our country.

But from the Embassy, we know that the relations between Costa Rica and Colombia are not limited to the commercial sphere. Having created ties of brotherhood under a robust institutional framework, I see three major areas that will further consolidate our ties. In terms of foreign policy, without a doubt, the fight against climate change and the strengthening of our tropical marine corridor in the Pacific, which has given rise to the creation of the largest cross-border marine reserve in the world, will continue to be common goals. Also, we share robust south-south cooperation, with increasingly sophisticated projects, on issues such as sustainable development and management of natural reserves and archives.

I conclude by extending a warm thank you to the Bogotá Chamber of Commerce for allowing me to be part of this outstanding publication, becoming a fundamental ally of Costa Rica, and sharing a personal note. Colombia will always keep a special place in me, not only because of its warm welcome and professional growth but also because it has given me a space to connect with its powerful vital energy, which has become a catalyst for my inner searches.

I have been fundamentally changed by encountering such diverse ways of thinking and conceiving the world, as well as the resilience of Colombian men and women to smile and achieve peace.

H.E. Max Valverde Ambassador of Costa Rica to Colombia 2.

Good news about Colombia

Good news about Colombia • The National Government announced the resumption of peace talks with the ELN starting in November. In these meaningful negotiations, Cuba, Norway, and Venezuela will serve as guarantor countries and will be accompanied by a UN Verification Mission and the Catholic Church. For more information, see the following link.

• On September 26, the border between Colombia and Venezuela was reopened, thus initiating a process of reactivation of binational trade, after three years in which transit was suspended. It is important to remember that between 2007 and 2008, the neighboring country became Colombia's leading trading partner, registering an exchange of nearly US$7,000 million. For more information, see the following link.

• Within the framework of the Congress of Confecamaras, an institution that brings together all the chambers of commerce in Colombia, which took place on September 9, the President of the Republic, Gustavo Petro, highlighted the importance of the chamber system in the country for the development of strategies that improve the conditions of MSMEs. In this same scenario, the Ministry of Commerce, Industry and Tourism, represented

by the Vice Minister of Business Development, María Fernanda Valdés, assured that the chambers of commerce would be fundamental actors in achieving the government's objectives in terms of business support, increased productivity, entrepreneurship, and accompaniment of the Regional Commissions of Competitiveness and Innovation. For more information, consult the following links: "The President of the Republic proposes to the Chambers of Commerce to work together on programs in favor of the popular economy" and ".”

• Within the framework of the XXVI Council of Ministers of the Pacific Alliance that took place in Mexico on October 20, Colombia supported the start of negotiations for Ecuador and Costa Rica to become members of the Alliance. For more information, see the following link.

• The UK has removed the visitor visa requirement for Colombian nationals. This measure will enter into force on November 9 of the current year. The decision was communicated after an exhaustive procedure in the British Parliament on October 18. For more information, see the following link.

Good news about Bogotá • Between October 11 and 14, Bogotá hosted the sixth edition of DEVCON, the world's most important cryptocurrency, and blockchain event. More than 5,000 foreigners attended this important event at the Ágora Convention Center. For more information, see the following link.

• After two years of waiting, on September 22, the first Car Free Day was held in Bogotá, joining this initiative in which more than 2,000 cities worldwide participated. According to the Ministry of the Environment, the day meant about 1.8 million cars and 500,000 motorcycles stopped emitting 7,600 tons of CO2, corresponding to a reduction of about 51% of the city's daily pollution. For more information, see the following link.

• In the first half of 2022, Bogotá received 60 foreign investment projects, which have been valued at more than USD 800 million and are expected to generate more than 9,600 direct jobs in the country's capital, according to Invest in Bogota. Most of these investments come from countries such as the United States, Spain, Argentina, Japan, and Mexico. For its part, the sectors that attracted the most projects were software and IT. For more information, see the following link.

• Everise, one of the fastest-growing BPO companies in the world, launched its operations in Bogotá on September 6. In the formal act, Sudhir Agarwal, CEO of the company, stated that this is a strategic territory through which they hope to expand their operations in Latin America”. For more information, see the following link.

• On October 4, the Swiss multinational SGS, a leader in verification, inspection, analysis, and certification services, opened its first pharmaceutical and cosmetics laboratory in all of Latin America in Bogotá. The project had an investment of more than one million dollars. For more information, consult the following link.

3.

BCC news and future events

• Between October 24 and 26, the Bogotá Chamber of Commerce and the World Federation of Chambers (WCF) held the First Great Ibero-American Summit on Sustainability and Innovation in Business. More than 24 countries participated in this great event, with 39 high-level speakers, more than 70% international, and nearly 50% women. In addition, we had the participation of almost 1,000 unique attendees who could listen to international experts such as Professor Ha-Joon Chang, Xavier Sale i Martin, Taryn Marie Stejskal, Barry Katz, and Elena Donets, among others. For more information, see the following link.

• After three years, ARTBO, the Bogotá International Art Fair organized by the CCB, returned. From October 27 to 30, in Corferias, this, the most important contemporary art fair in Latin America, was held, with more than 260 international guests, including institutions, collectors, curators, journalists, and experts, as more than 25,000 attendees. The fair had 51 galleries from 15 cities and six countries: Brazil, Spain, Argentina, Belgium, Chile, and of course, Colombia. For more information, see the following link.

• On September 27, we had the opportunity to socialize with our network of international allies and the accredited diplomatic corps in Colombia about the opportunities that the District of Science, Technology, and Innovation of Bogotá will mean, as well as our work in Responsible Business Conduct and at in front of the World Federation of Chambers. More than 30 embassies and representatives from more than 50 countries participated in the event. For more information, see the following link.

• On September 16, the 11th edition of the Bogotá Music Market (BOmm), a platform of the Bogotá Chamber of Commerce, concluded with more than 3,750 business appointments between artists, groups, agents, and buyers. More than 7,000 people also attended this important space over five days, during which 100 events were held, including talks, workshops, and musical performances. For more information, see the following link.

• Between September and October, the Bogotá Chamber of Commerce carried out the second version of the Great Survey of the Entrepreneurship of Bogotá-Region in 2022. This exercise will allow an in-depth knowledge of the characteristics of business, its role in society, and the behavior of firms or companies in terms of their activity, commercialization, and productivity, as well as the main reasons they had to start their company and know its main needs. For more information about the survey, see the following link.

• The Bogotá Chamber of Commerce, together with the Sustainable Fashion Cluster of Peru, and Finnova, launched a cooperation initiative to promote the sustainability and internationalization of the fashion sector.

The initiative has €182,696 in resources, of which €130,721 are a contribution from the European Union and €51,975 are part of the counterpart of the entities of the alliance. For more information, see the following link.

• At the BCC, we are prepared to take advantage of the opportunities arising from opening the border and reestablishing economic relations between Colombia and Venezuela. For this reason, on October 6, we accompanied CAF in the presentation of the report "Paths for Integration: Trade Facilitation, Infrastructure, and Global Value Chains,” which specializes in foreign trade opportunities and reactivation of binational trade with the neighboring country represents. For more information, see the following link.

• The CCB is committed to promoting good practices in integrity and anti-corruption. For this reason, we have teamed up with the Anticorruption Institute to develop an Integrity Guide for SMEs. In this sense, we want to know your needs and develop this important instrument together. We invite you to participate in this exercise through the following link.

4.

Economic behavior

4.1GDP1 Colombia's GDP grew 12.6% during the second quarter of 2022, representing a growth of 4.0 percentage points above the first quarter, in which the country grew 8.6%. On the other hand, the country's biennial GDP growth for the first quarter of 2022 was 33.3%, and the three-year growth of the country's production was 11.2% for the second quarter of 2022.

Graph 1. Annual growth rate, by quarter, of GDP between 2019 and 2022 Colombia and Bogotá

18,3% 13,7% 17,7% 3,5% 3,8% 3,7% 3,9% 2,3% 3,0% 3,2% 3,0%

12,9% 1,2%

11,6% 10,8%

0,9%

11,5% 12,6% 8,6%

-3,6% 0,8%

0,8%

-7,7% -3,6% -15,5% -8,8%

I

II

III

IV

I

2019

-16,6% II

III

IV

I

2020p Colombia

II

III

2021pr

IV

I

II 2022

Bogotá

Source: DANE. Directorate of Synthesis and National Accounts. Constant prices. DANE has not yet published information for the second quarter of 2022 for Bogotá.

Bogotá's GDP grew 15.4% in the second half of 2022, 3.9pp more than in the first quarter of the year, where the city rose 11.5%; Regarding 2020, Bogotá had a biennial growth in its GDP of 35.9%, while its three-year growth was 14.8%. In the second quarter of 2022, Bogotá presented a GDP of 64.6 billion pesos, the highest figure in the last

1

Source: DANE, National Accounts. Published on August 16, 2022

four years for a second quarter, even higher than in 2019 ,where the figure was 56.2 billion pesos. pesos; The foregoing shows a consolidation of the economic recovery in the second quarter of 2022.

4.2 Inflation In September 2022, the monthly price variation in the country was 0.93%, while in Bogotá it was 0.95% according to DANE. In the first nine months of the year, the variation in prices was 10.08% at the national level and 9.39% at the Bogotá level. The annual variations for Colombia and Bogotá, respectively, were 4.51% and 10.42% Table 1. Monthly and year-to-date inflation in Colombia and Bogotá during September 2022.

Monthly variation

Variation year to date

Yearly variation

Period Colombia

Bogotá

Colombia

Bogotá

Colombia

Bogotá

September 2021

0,38%

0,29%

4,33%

3,65%

4,51%

3,64%

September 2022

0,93%

0,95%

10,08%

9,39%

11,44%

10,42%

Source: DANE - Consumer Price Index (CPI).

Regarding the sectors that presented the most significant variation in their prices, in Bogotá 4 sectors stood out: (1) food and non-alcoholic beverages, (2) furniture, articles for the home and ordinary maintenance of the home, (3) garments, clothing and footwear and (4) Miscellaneous goods and services, their variations were 1.83%, 1.61%, 1.52%, and 1.32%, respectively. In the national case, furniture, household items, and ordinary home maintenance presented the greatest increase in price level (1.65%), followed by the food and non-alcoholic beverages sector (1.61 %).

It is highlighted that in the month of September, there was no negative variation in any of the sectors; the alcoholic beverages and tobacco sector and the information and communication sector are the ones that reported the lowest variation in prices at the national level, 0.46% and 0.09%, respectively.

4.3Employment2 Employment has shown a significant improvement in recent months. At the national level, the unemployment rate in August 2022 was 10.6%, 2.3pp less than in August 2021, and 0.6pp less than in 2019. In August 2022, the employed population presented an annual variation of 1.58 million people and a three-year variation of 1.09 million people. Illustration 1 shows the decrease in the number of unemployed people on an annual and three-year basis; likewise, it presents the annual and three-year variation of the unemployment rate mentioned above.

2

Source: DANE, Great Integrated Household Survey (GEIH). Retrieved from: https://www.dane.gov.co/index.php/estadisticas-portema/mercado-laboral/empleo-y-desempleo

Illustration 1. Number of unemployed people and unemployment rate in Colombia for August 2021 and August 2022 (thousands of people)

Source: Great Integrated Household Survey - GEIH (DANE), August 2022. Published September 30, 2022

At the national level, the gender gap in the labor market is notable; by August 2022, men presented an unemployment rate of 8.7%, while women dealt with a rate of 13.3%, 4.6pp higher than that of men (Illustration 2). However, the gap was reduced compared to 5.1pp in the previous month, and the number of employed women increased by 1.1 million compared to August 2021.

4.4 Business Dynamic During the period January-September 2022, 73,975 thousand companies were created in Bogotá and the 59 municipalities of the jurisdiction, which represents a positive variation of 6.8% compared to the same period in 2021, but a negative 3.8% Compared to 2019; this means that it is still necessary to recover the rate of business creation before the pandemic. Micro-enterprises continue to be the main protagonists in company creation; they represented 99.9% of all companies created in the period January-September 2022, while medium and large, barely 0.02% and 0.01 %, respectively; 82.3% of the companies were created in Bogotá while the other 17.7% correspond to the other 59 municipalities in the jurisdiction of the Bogotá Chamber of Commerce. At the sectoral level in the creation of companies, the services sector presented a variation of 11.8%, the industry sector 11.6%, and the commerce sector -2.9%.

In Bogotá and the rest of the jurisdiction, the recovery process in the number of active companies continues; for the period January-September 2022, 465,668 active companies were recorded, 6.7% more companies than the

previous year. Likewise, 398,625 active companies were registered in Bogotá, 6.4% more than in 2021, accounting for 85.6% of the total active companies in the region; In the other municipalities of the jurisdiction, the number of active companies was 67,043, 8.5% more than in the same period of 2021 and corresponding to 14.4% of the total.

Table 2. Evolution of active companies between 2019 and 2022 for the period January - September by zone of the jurisdiction Municipality

Jan- sep (2019)

Jan- sep (2020)

Jan-sep (2021)

Jan-sep (2022)

Variation Variation Variation 2019 - 2022 2020 – 2022 2021 – 2022

Bogotá D.C.

412.599

349.694

374.732

398.625

-3,4%

14,0%

6,4%

59 municipalities under our jurisdiction

61.091

56.649

61.786

67.043

9,7%

18,3%

8,5%

Total

473.690

406.343

436.518

465.668

-1,7%

14,6%

6,7%

Source: Mercantile Registry, CCB, 2019 - 2020 – 2021 - 2022. The consultation of the business information of the Mercantile Registry was carried out on October 1, 2022 - Qlik Sense.

5.

Evolution of Foreign Trade

Exports3: In the period January-August 2022, Colombian exports were US$ 39,138 million FOB, which meant an increase of 55.9% compared to the same period in 2021. When compared to 2019, national exports increased by 45.9 %.

Foreign sales of merchandise originating in Bogotá represented 10.7% of the total exported in Colombia, excluding oil and its derivatives in the period January-August 2022. Exports from Cundinamarca represented 7.7%.

3 Source: DANE, Exports. August 2022. Retrieved from: https://www.dane.gov.co/index.php/estadisticas-por-tema/comercio-internacional/exportaciones

Graph 2. Annual variation of Colombian exports in Bogotá and Cundinamarca 2021-2022

120,0

80,0

40,0

0,0

-40,0

Colombia

Bogotá

Cundinamarca

Fuente: DANE - EXPO

Bogotá's exports increased by 31.6% in the January-August 2022 period compared to the same period in 2021, going from US$2,056 million FOB to US$2,706 million FOB. For its part, exports from Cundinamarca increased 52.1% in January-August 2022, going from US$ 1,277 million FOB to US$ 1,943 million FOB. Imports: Imports of goods increased by 43.2% when comparing January-August 2022 with the same period in 2021. Colombia bought goods worth US$52,694.7 million. Compared to January-August 2019, Colombian imports increased by 49.1%.

In the period January-August 2022 compared to the same period in 2021, manufacturing imports increased by 36.9%, agricultural, food, and beverage imports increased by 36.6%, and fuels and extractive industry products increased by 120.6%. Bogotá increased external purchases of merchandise by 37.4% between January-August 2022 and the same period in 2021. Cundinamarca registered an increase of 34.5% in external purchases between January-August 2022 and the same period in 2021. In Imports of goods in the period January-August 2022, the

Bogotá-Cundinamarca region is the one with the highest participation with 53.6%. Bogotá imported merchandise for US$23,957 million in January-August 2022, which represented 44.5% of the total imported. Cundinamarca imported merchandise for US$4,303 million, representing 8.2% of Colombian imports registered during JanuaryAugust 2022.

6.

Foreign Direct Investment

According to the Ministry of Commerce, Industry, and Tourism of Colombia, Foreign Direct Investment (FDI) stood at US$8,449 million in the January-September 2022 period. This means an increase of 62.5% compared to the same period ( JanuarySeptember) of the previous year. With the above, FDI in the month of September was US$772 million, which meant an increase of 16.2% compared to the same month the previous year.

For its part, investment in mining-energy sectors stood at US $6,130 million as of September 2022, which represents an increase of 80.5% compared to the same period in 2021. FDI in non-mining-energy sectors amounted to US $2,319 million in the same period, which represents an increase of 28.6% compared to the same period in 2021.

Graph 3. Foreign Direct Investment. Period January – September (2014-2022)

Source: Central Bank-Exchange balance in the Ministry of Commerce, Industry, and Tourism. September 2022.

7.

Sources

• For more information, refer to the Observatory of the Bogotá Chamber of Commerce https://www.ccb.org.co/observatorio • DANE. Cuentas Nacionales. Recuperado de: nacionales/cuentas-nacionales-trimestrales • DANE. Mercado Laboral. Información tema/mercado-laboral/empleo-y-desempleo

https://www.dane.gov.co/index.php/estadisticas-por-tema/cuentas-

recuperada

de:

https://www.dane.gov.co/index.php/estadisticas-por-

•

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-por-tema/encuesta-pulsosocial • DANE, Exportaciones. Agosto 2022. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-por-tema/comerciointernacional/exportaciones • DANE, Comercio internacional importaciones septiembre 2022.

Recuperado https://www.dane.gov.co/index.php/estadisticas-por-tema/comercio-internacional/importaciones.

de:

• 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 • DANE. Encuesta Pulso Empresarial. Recuperado de: https://www.dane.gov.co/index.php/estadisticas-por-tema/comerciointerno/encuesta-pulso-empresarial • Observatorio de Desarrollo Económico de Bogotá.

Recuperado de: https://observatorio.desarrolloeconomico.gov.co/expectativas/indice-de-confianza-industrial-vuelve-terreno-positivo