XII InternationalNEWSLETTERAlliesBogotá,July2022 CONTENT1.Guest Columnist 2. Good News from Colombia 3. Economic Developments 3.1. Gross Domestic Product 3.2. Inflation 3.3. Labor Market 3.4. Business Dynamics 4. Evolution of Foreign Trade 5. Foreign Direct Investment 6. BCC News and Upcoming Events 7. Sources
Undoubtedly, Colombia is a diverse country brimming with talent and a hard working population, characteristics reflected in its entrepreneurship ethos, which is unique in the region. Colombia also has other features that make it a great country. Political and macroeconomic stability, outstanding growth indicators, enviable geographical conditions, and the strength of its institutions make the Colombian democracy a role model for the region.
are also opportunities for macro collaboration to help improve the Colombian entrepreneurship and innovation ecosystem. However, despite Israel being a world leader in this field, consolidating itself as a global mecca for entrepreneurship and innovation, I believe it is impossible to make a replica of our model in Colombia.
Not because the Colombian ecosystem has any structural problems, but because each one has particular characteristics, whether cultural or public policy related, that makes an exact copy impossible and not only of the Israeli model but of any other Despite the above, one dimension in which we can significantly help improve the Colombian entrepreneurship and innovation ecosystem is developing public policies under the best standards. In this field, I consider that there are three major strategic axes in which Israel would be of great support: i) development of a general framework to promote and improve access to financing for the high tech industry; ii) establishing a successful industry academia relationship model; and iii) strengthening the educational system based on STEM and teaching foreign languages at all levels, from basic to higher education, to better meet the demands of the productive system
That said, I believe that there are three specific areas in which, without a doubt, Colombia has significant competitive advantages to attract the attention of Israeli businesspeople, attract foreign investment from my country and create new joint ventures. The first of these is agritech, given that Colombia's agricultural wealth and Israeli technology would make an ideal match. Second is the environment, where again, the natural wealth of Colombia, combined with Israeli experience and technology, could bring great benefits to both countries. Finally, we have the health sector, since we have identified the Colombian health system as one of the most developed in the world, sharing similar characteristics with the Israeli system, where our technology could help take it to the next Therelevel.
We see many opportunities for collaboration between Colombia and Israel and their business sectors, which will bring mutual benefits to our nations. But to take advantage of these opportunities, I consider it essential to start by creating links between the two ecosystems, breaking rigid paradigms, and thinking outside the box to obtain innovative results. For example, not only creating new joint ventures but also involving third parties from other countries that can, among other things, support these alliances with financing or mentoring
1. Guest Columnist
Following the above from the Embassy of Israel in Colombia, we work on building the necessary structures to take advantage of these opportunities. First of all, we support the implementation of the FTA between our two countries, which entered into force in August 2020 amid the pandemic, which is why we have only begun to see results until
now. This agreement brings Israeli technologies closer to Colombian exporters and importers. It includes a chapter on investment protection that will facilitate the transfer of knowledge and technologies, among many other things We also work on developing cooperation agreements, where, of course, the opening of the iNNpulsa office in Israel constitutes a significant milestone and a key instrument to promote exchange in entrepreneurship related matters between our countries. But we have also given a regional focus to our work, carrying out bottom up exercises that make it easier for different regional actors based in Colombia to learn about our entrepreneurship and innovation Allecosystemoftheabove
makes me optimistic about the future of relations between Colombia and Israel. Having created ties of brotherhood under a robust institutional framework, we see that the identified opportunities are perfectly adapted to the priorities of the incoming government of Colombia. Examples are clean energy sources, the fight against climate change, and the adoption of technological solutions in MSMEs. I do not doubt that my successor will have much work ahead of him to take advantage of all these opportunities and continue strengthening bilateral relations between our brother countries. On August 11, I will say goodbye to a country that welcomed me with open arms from the very first moment. I take home with me the warmth of its people, especially of all people and institutions with whom I interacted and cooperated over the last two and a half years, like the Bogotá Chamber of Commerce. Without a doubt, Colombia will be a country to which I hope to return soon, this time as a tourist in love with its territory Christian AmbassadorCantorofIsrael in Colombia
• Colombia and the United Arab Emirates signed a Memorandum of Understanding on energy cooperation. The agreement signed between the Ministry of Mines and Energy of Colombia and the Department of Energy of the Emirate of Abu Dhabi seeks to promote capacity building and the exchange of knowledge and information, thus promoting cooperation on scientific, technical, technological, administrative, and business related matters in the energy sector. For more information, please visit the following link
• Colombia takes another step to position itself at the forefront of financial matters. After Mexico and Brazil, it becomes the third Latin American country to adopt Open Finance, a financial information exchange model that seeks to streamline and improve financial services. The decree issued by the Ministry of Finance, through which this model is adopted, includes regulation for payments originated through low value payment systems, guidelines for personal data processing, and adoption of digital ecosystems and technological and security standards to guarantee the correct development of the open financial architecture. For more information, please visit the following link
GoodNewsfromColombia
• On July 20, commemorating Independence Day in Colombia, the Congress of the Republic was installed for the 2022 2026 period. This will be the first time that legislators from the center left will be the majority. For more information, please visit the following link
• Thanks to the solid and dynamic recovery of the Colombian economy, the International Monetary Fund revised its projection of GDP growth for 2022 upwards, estimating that the country will grow by 6.3%, which is 0.5 percentage points higher than its estimate from last April. With this, the Colombian economy will have the best performance in 2022, standing well above the regional average, estimated at 3.0%. For more information, please visit the following link.
• Under a loan signed by the Government of Colombia with the Inter American Development Bank (IDB) in 2020, the country achieved exports and business expectations in knowledge based services for more than US$300 million between April 2020 and May 2022. For more information, please visit the following link
2. Good News from Colombia
• On August 7, Gustavo Petro will assume the Presidency of the Republic. Among the priorities of the new government will be a tax reform that will seek to increase collection, reforms to the political system to combat corruption, reform of the pension system, a greater focus on environmental sustainability, strengthening of the popular economy, and reform of the health system. For more information, please visit the following link
Good News from Bogotá
• The project for the second line of the Bogotá Metro was approved by the National Political and Social Council (CONPES), whereby the Colombian State committed the resources needed to execute this project, which will contribute to improving mobility in the Colombian capital. For more information, please visit the following link
• Softtek, a global company dedicated to helping organizations evolve through digital technology, announced the opening of its new offices in Bogotá. The multinational expects to increase the export of knowledge based services and create approximately 1,000 jobs by 2023. For more information, please visit the following link.
• To promote the purchase and sale of local products in Bogotá, the Secretariat of Economic Development launched the “Made in Bogotá” strategy. This strategy aims to bring local producers' businesses closer to new marketing channels, and it will become an experience that will usher in a new way of buying and selling locally
• The US medical device giant Zimmer Biomet opened its corporate services center in Bogotá, from which it will handle finance, accounting, customer service, global operations, regulatory affairs, product engineering, human resources, and purchasing for the company's offices on the continent American. For more information, please visit the following link
• On July 19, the first phase of the Single Investment Window came into operation, a digital tool that will guide and integrate all the procedures, regulations, costs, times, and other information that foreign investors need to establish their operations in Colombia. This instrument also consolidates all the information related to investment benefits offered to each economic sector. For more information, please visit the following link
The strategy began with a fair in the Parque de la 93 Creative District, leaving more than COP$230 million in sales, benefiting 1,450 local entrepreneurs. For more information, please visit the following link
• Bogotá will accelerate its proactive strategy to attract Foreign Direct Investment. During the second half of 2022, the capital's investment promotion agency, Invest in Bogota, will conduct 18 international campaigns to promote the city´s investment opportunities. For more information, please visit the following link
3. Economic Developments 3.1 Gross Domestic Product (GPD)1 The National Administrative Department of Statistics (DANE) published the annual results of Gross Domestic Product growth in 2021 by departments. The Gross Domestic Product (GDP) of Bogotá, in its original series, grew by 11.6% in 2021 in Cundinamarca and 10.6% in Bogotá. In addition, as shown in graph 1, Bogotá Cundinamarca is the region that contributed the most to the national GDP in 2021, with a total of 31.5% of the share of the nation's total production. Thus, Bogotá represented 25.3% of the national output, and Cundinamarca represented 6.2% of GDP.Graph 1. Share of departments and the district in national production (departmental GDP at current prices for 2021) Source:DANE.DirectorateofSynthesisandNationalAccounts.Currentprices 1 Source: DANE, National accounts. Published on June 28, 2022 25,3% 15,0% 9,8% 6,3% 6,2% 4,4% 3,5% 3,4% 2,6% 2,1% 2,0% 1,8% 1,7% 1,7% 1,7% 1,6% 1,6% 1,5% 1,5% D.C.Bogotá Antioquia CaucadelValle Santander Cundinamarca Atlántico Bolívar Meta Boyacá Tolima Cesar Cauca Córdoba Caldas Huila Risaralda SantanderdeNorte Nariño Casanare
Source:DANE ConsumerPriceIndex(CPI) 3.3 Labor Market 2 The unemployment rate in Colombia for June 2022 was 11.3%, compared to 14.6% for the same month in 2021, a decrease of 3.3 percentage points. For Bogotá and its metropolitan area, the unemployment rate stood at 11.1% for the April June 2022 quarter, 6.5 percentage points lower than the 17.7% registered for the same quarter in On2021.the other hand, the employed popularity in the country grew by 2 million people between June 2021 and June 2022, from 20 in 2021 to 22 million in 2022. This decreased the number of unemployed persons in the country between June 2021 and 2022 by 650,000, for a total of 2.7 million. 2 Fuente: DANE, Gran Encuesta Integrada de Hogares (GEIH). Recuperado de: https://www.dane.gov.co/index.php/estadisticas por tema/mercado laboral/empleo y desempleo
GDP per capita by department for the year 2021 in Colombia shows that Casanare is the department with the highest GDP per capita, registering a total of 8.9 thousand dollars per capita, followed by Bogotá with 8.7 thousand dollars per capita, and Meta occupies the third place with 8.4 thousand dollars per capita. Cundinamarca is in tenth place with 4.9 thousand dollars per capita. On the other hand, the country registered a total of 5.2 thousand dollars per capita for 2021. 3.2 NationalInflationprice variation was 0.51%, and 0.56% for Bogotá in June 2022. Combined with the previous five months, these figures brought the country's average inflation for the first semester to 7.09%; in Bogotá, inflation was 6.81%. For context, the Central Bank´s projections for June 2022 published in its monetary policy report showed a closing inflation rate of 7.1% for 2022. This means that during the first semester, the total projection expected by the issuer for the entire year has already been met Table 1. Monthly and year to date inflation in Colombia and Bogotá for June 2022 Period Monthly variation Year to date variation Annual variation Colombia Bogotá Colombia Bogotá Colombia Bogotá June 2021 0,05% 0,04% 3,13% 2,62% 3,63% 3,00% June 2022 0,51% 0,56% 7,09% 6,81% 9,67% 8,89%
3.4 Business Dynamics
During the January June 2022 period, 50,119 companies were created in Bogotá and the 59 municipalities in its jurisdiction. New companies increased by 11% compared to the same period in 2021, 43% compared to the same period in 2020, and decreased by 4% compared to 2019. Of the total number of new companies registered, 71.7% correspond to natural persons and 28.3% to companies. On the other hand, commercial registration of natural persons increased from 30,558 to 35,934, which represents a positive variation of 18%. Among sectors, the service sector had the highest growth rate in commercial registrations, with 18%, followed by industry, with 16% Bogotá and Cundinamarca continued with a stable recovery process in the number of active companies, having 415,385 active companies for the January June 2022 period. Likewise, 356,182 active companies were registered in Bogotá, accounting for 85.7% of all active companies in the region. The number of active companies increased by 7% compared to 2021. Based on the above, the business community had 415,385 active companies for January June 2022. However, it is important to highlight that there is only a 1% difference between the level observed in the same period of 2019 when there were 418,850 companies in the jurisdiction, which means that 3,465 companies still need to be recovered to restore the business community existing in 2019 fully 2022 June
for the January
period by jurisdiction Municipality Jan(2019)June Jan(2020)June Jan(2021)June Jan(2022)June 2019Variation2022 2020Variation2022 2021Variation2022 Bogotá D.C. 364.749 291.075 332.780 356.182 2% 22% 7% 59 municipalities 54.101 46.253 54.243 59.203 9% 28% 9% Total BCC jurisdiction 418.850 337.328 387.023 415.385 1% 23% 7% Source: Commercial Registry, BCC, 2019 2020 2021 2022. The Commercial Registry was consulted on July 1, 2022 Qlik Sense
Table 2. Evolution of active companies between 2019 and
Furthermore, the gap in unemployment between men and women in June 2022 was 4.9 p.p. for women, compared to 5.7 p.p. for the same period in 2021. For June, the unemployment rate for women was 14.1% and 9.2% for men.
4. Evolution of Foreign Trade Exports3 Dynamic:s of Colombian exports: During January May 2022, Colombia's external sales, including oil and its derivatives, totaled US$22.9 billion FOB, which represents an increase of US$7.9 billion compared to the same period in 2021, which is an increase of 53.1%. Export levels surpassed the same period in 2019, standing at US$ 5.7 billion FOB above, an increase of Graph33.6%.2.Colombian exports January May 2019 2022 Source: DANE EXPO Dynamics of exports from Bogotá Cundinamarca: Exports originating from Bogotá increased from US$ 1.2 billion FOB in January May 2021 to US$ 1,7 billion FOB in January May 2022; this represents a growth of 42.0%. On the other hand, exports from Bogotá grew by 71.5% compared to the same period in 2019, from US$ 1 billion FOB in 2019 to US$ 1,7 billion in 2022, which represents an increase of US$ 732 million in exports from Bogota. 3 Source: DANE, Exports. May 2022 Taken from: https://www.dane.gov.co/index.php/estadisticas por tema/comercio internacional/exportaciones 17.205 12.88815.007 22.982 Ene-may 2019 Ene-may 2020 Ene-may 2021 Ene-may 2022 FOBdollarsofBillions Total Exportaciones Colombia
For January May 2022, Bogotá was the second largest exporting department in the country with 12.0% of the country's total exports and is surpassed only by Antioquia, with 19.8% of total exports. Cundinamarca is Colombia's fifth largest exporting department, with 7.9% of the country's total. This makes Bogotá Cundinamarca the largest exporting region in the country, representing 19.9% of the country's total exports.
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Graph 3. Bogotá Cundinamarca region exports (without oil and its derivatives) May 2019 2022 Source:DANE EXPO Imports4 Dynamic:of Colombian imports: For the January May 2022 period, Colombian imports totaled 32.1 billion dollars CIF, an increase of 47.9%, compared to the same period in 2021. Of total imports, 73.8% were manufactured goods, 14.2% were agricultural products, food, and beverages, and 11.8% were fuels and products for the extractive Dynamicsindustries.of imports in the Bogotá Cundinamarca region: Imports into Bogotá and Cundinamarca increased 56.1% and 41.0%, respectively, during the January May 2022 period. External purchases from the area totaled to US$ 18.5 billion for the same period. Source: DANE, Imports. May 2022 Taken: https://dane.gov.co/index.php/estadisticas 2019 Ene-may 2020 Ene-may 2021 Ene-may 2022 Cundinamarca
por tema/comercio internacional/importaciones 1.024 891 1.237 1.756 926 735792 1.153 Ene-may
FOBdollarsofBillions Bogotá
Cundinamarca saw an increase of 45.6% in exports from January May 2022 compared to the same period in 2021, from US$792 million FOB in 2021 to US$1.1 billion FOB in 2022. Like Bogotá, Cundinamarca surpassed pre pandemic period export levels, as January May 2019 exports totaled US$926 million FOB.
Graph 4. Foreign Direct Investment. January June (2014 2022) Period
Source: Banco de la República Exchange Balance from the Ministry of Commerce, Industry, and Tourism. June 2022 BCC News and Upcoming Events
According to the Colombian Ministry of Trade, Industry, and Tourism, Foreign Direct Investment (FDI) stood at US$5.8 billion for January June 2022. This means an increase of 77.6% compared to the same period (January June) in Investment2021. in mining energy sectors stood at US $4.1 billion as of June 2022, representing an increase of 82.3% compared to the same period in 2021. FDI in non mining energy sectors totaled US $1.7 billion for the same period, representing an increase of 67.7% compared to the same period in 2021.
Additionally, foreign portfolio investment for the Jan June 2022 period totaled US $1,7 billion, an increase of 27.2%.
Finally, Colombia's direct investment abroad for the January June 2022 period was negative by US $405.9 million.
• On Tuesday, August 9, the Bogotá Chamber of Commerce and the World Chambers Federation (WCF) will hold the forum “Entrepreneurship for women: a business that multiplies its value” at the Chapinero headquarters of the BCC, with which it seeks to promote the role of women in business and offer practical tools to strengthen their enterprises. The event will feature the special visit of Mrs. Marie Christine Oghly, Vice President of the World Chambers Federation, President of FCEM (Global Women Entrepreneurs), and Vice President of International Development of the Paris Region Chamber of Commerce
5. Foreign Direct Investment
• DANE.LaborMarket Takenfrom:https://www.dane.gov.co/index.php/estadisticasportema/mercadolaboral/empleoy desempleo Commercial Registry, BCC, 2019 2020 2021 2022 Taken from: https://www.ccb.org.co/Inscripcionesy renovaciones/MatriculaMercantil/BoletinesdelRegistroMercantil/Boletinesano2021
• The Bogotá Chamber of Commerce published its eighth Sustainability Report, through which we highlight our contribution to the Sustainable Development Goals and the great potential of the private sector to solve the challenges of the 2030 Agenda. For more information, please visit the following link • Formoreinformation,pleasevisittheBogotaChamberofCommerceObservatory https://www.ccb.org.co/observatorio
• During its Mission in Belgium and Spain between July 11 and 15, led by its executive president, Nicolás Uribe Rueda, the Bogotá Chamber of Commerce presented to the European Union the results of the Chamber´s cooperation projects carried out with EU resources to strengthen the competitiveness and productivity of the business community of the Bogotá Region and support its transition to more sustainable production models. In addition, bilateral meetings were held to define strategies to strengthen trade and business with the European Union, Belgium, and Spain
• DANE. National Accounts Taken from: https://www.dane.gov.co/index.php/estadisticasportema/cuentas
• The Arbitration and Conciliation Center of the Bogotá Chamber of Commerce launched its most recent specialty service in corporate arbitration, aimed at exclusively resolving and attending to the legal needs of businesspeople and the Chamber´s partners. For more information, please visit the following link
• DANE.SocialPulseSurvey.Takenfrom:https://www.dane.gov.co/index.php/estadisticasportema/encuestapulsosocial
• The BCC, through its transport and logistics cluster and the Colombian Committee of the International Chamber of Commerce, ICC Colombia, developed the secure foreign trade program to help entrepreneurs in their internationalization processes. For more information, please visit the following link
• DANE, Exports. May 2022. Taken from: https://www.dane.gov.co/index.php/estadisticasportema/comercio internacional/exportaciones
• DANE, International trade imports May 2022 Takn from: https://www.dane.gov.co/index.php/estadisticaspor tema/comerciointernacional/importaciones.
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nacionales/cuentasnacionalestrimestrales
6. Sources
• Ministry of Commerce, Industry and Tourism. Foreign Direct Investment Reports. Taken from: https://www.mincit.gov.co/estudioseconomicos/estadisticaseinformes/informesdeinversionextranjera • DANE. Business Pulse Survey Taken from: https://www.dane.gov.co/index.php/estadisticasportema/comercio interno/encuestapulsoempresarial • Bogota Economic Development Observatory Taken from: https://observatorio.desarrolloeconomico.gov.co/expectativas/indicedeconfianzaindustrialvuelveterrenopositivo