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Doing Business in Colombia 2008: First Subnational Report Compares 13 Cities, Identifying Practices to Improve Competitiveness, Create Jobs


Contact in Washington, D.C.:
Adriana Gómez.

Phone: +1 202 458-5204

E-mail:
agomez@ifc.org


Bogotá, January 30, 2008—Colombia’s cities vary significantly on the ease of doing business, according to Doing Business in Colombia 2008, a new report from the World Bank Group that was launched in Bogotá today.  It is the first subnational report of the Doing Business series to study Colombia.  

Doing Business rankings are based on indicators of regulation that track the time and cost it takes a business to meet government requirements. The Colombia report covers 13 cities and five areas of regulation—starting a business, registering property, paying taxes, trading across borders, and enforcing contracts.

The report is the result of a request from the Ministry of Finance to FIAS, a multidonor investment climate advisory service of the World Bank Group. It was produced with assistance from the Directorate of Entrepreneurial Development at the National Planning Department; the Ministry of Trade, Industry, and Tourism; and the Presidential Office for Competitiveness and Productivity.  It also had financial support of the U.S. Agency for International Development.

Variations in municipal- or department-level regulations and practices, or in implementation of national-level regulations, can enhance or constrain local business activity. The report finds the following about Colombia’s cities:

Strong performance, by global standards, on the time it takes to register property.

Manizales, the city with the fastest time to register property (20 days), would rank 33 if were compared against 178 national economies.
Weaker performance, compared with global results, on the number of administrative procedures. On average, starting a business takes 14 procedures, versus an average of 10 across Latin America.
A high tax burden on businesses, requiring a large number of payments and taking excessive time for tax compliance. Though ranked first in Colombia, Popayán would rank 131 against 178 economies worldwide.

Variations in the time and cost to import and export, based on port procedures and inland transportation. Importing and exporting are relatively fast in Santa Marta and slower in Villavicencio.

Big differences in the time it takes to enforce contracts. A simple commercial dispute can be resolved in 14 months in Villavicencio and Pereira, compared to four years in Bogotá and Barranquilla.
Payoffs from reform can be huge. Higher rankings on the ease of doing business are associated with growth, additional jobs, and a smaller informal sector. While Colombia was one of the world’s top 10 reformers last year, much more remains to be done. In the global Doing Business 2008 report, Colombia (represented by Bogotá) ranked 66 among 178 economies on the ease of doing business.

The new report shows that simple administrative reforms at the local level can make Colombia’s cities more competitive, both nationally and globally. Cities can learn from each other. For example, if a hypothetical city “Colombiana” were to adopt the best practices that already exist in the country’s cities, it would rank 35 if compared against the 178 economies worldwide. This would mean adopting Bogotá’s and Villavicencio’s procedures to start a business, Manizales’ time to register property, and Villavicencio’s contract enforcement practices. City-level rankings are becoming increasingly important in a globalized world, where specific locations, rather than countries, compete for investment—Medellin versus Shanghai, for example, instead of Colombia versus China.

Doing Business in Colombia 2008
is based on the efforts of over 170 lawyers, accountants, freight forwarders, customs brokers, and local public officials routinely administering or advising on legal and regulatory requirements. The data, methodology, and names of contributors are available online at http://www.doingbusiness.org/colombia.

Statements from Partners in the Doing Business in Colombia 2008 Report:


FIAS –World Bank Group

Creating jobs is a priority for any government. Business-friendly regulations create opportunities and more equitable growth. Colombian cities would benefit greatly from new enterprises and jobs that can come with better regulations,” said Mierta Capaul, lead author of the report.

USAID Economic Office in Colombia

This analysis will help business and policymakers identify investment opportunities throughout Colombia and promote regional development. The indicators provide a snapshot of competitiveness in each of the 13 cities. This initiative promotes understanding of the investment climate in these cities, and will help their governments make appropriate policy decisions to  improve the economic environment, promote business creation, and ensure sustainability,” said Margaret Enis, Director of the USAID Economic Office in Colombia.

National Planning Department of Colombia

Improving the conditions that facilitate entrepreneurial sector development is one of the main pillars that support the National Development Plan for 2006-2010.  This study confirms the need to continue joint work between the central government and local administrations to promote a new approach towards decentralization and to strengthen the initiatives for simplifying procedures, among other concerns.  It is not enough to simplify national procedures if there are not corresponding changes in the municipal and departmental institutions, which often touch entrepreneurs more closely,” said Carolina Rentería, Director of the National Planning Department.

Ministry of Trade, Industry and Tourism

The Ministry of Trade, Industry, and Tourism appreciates the commitment and dedication that the World Bank Group has invested in this important study.  Colombia’s 12th place ranking among 31 Latin American economies shows us the course to pursue. This subnational report will help departments and municipalities benchmark their level of competitiveness and will provide transparent information to citizens, the public sector, and investors. This will help implement best practices to enhance the business environment and identify regional strengths for attracting more investment, which is the national government’s main economic policy,” said Luis Guillermo Plata, Minister of Trade, Industry, and Tourism.

Presidential Office for Competitiveness and Productivity

The results present a challenge that forces us to think about accelerating reforms in our cities and establishing more ambitious goals. Comparison with cities worldwide also challenges each region to improve its position. Competitiveness does not mean low wages or subsidies for particular sectors. It means competitive taxes, and it encourages the investment climate in our regions. It is not about imposing barriers to competition, but improving the skills in our cities to create more and better jobs. The high living standards we all desire for Colombia rely on the capacity of our enterprises to add value. And that capacity can be strongly driven by strategies that improve the competitiveness of our cities. This will help us sustain investors’ trust and reach collective prosperity,” said Fabio Valencia Cossio, High Commissioner at the President’s Office for the Competitiveness and Productivity of Colombia.




Doing Business in Colombia: Where Is It Easiest?
1 Pereira, Risaralda
2 Manizales, Caldas
3 Bucaramanga, Santander
4 Cali, Valle del Cauca
5 Santa Marta, Magdalena
6 Cúcuta, Norte de Santander
7 Popayán, Cauca
8 Villavicencio, Meta
9 Bogotá, Cundinamarca
10 Medellín, Antioquia
11 Barranquilla, Atlántico
12 Cartagena, Bolívar
13 Neiva, Huila



For more information on the Subnational Doing Business report series, visit www.subnational.doingbusiness.org

For copies of the Doing Business in Colombia 2008 report, visit
www.doingbusiness.org/colombia

For more information on the global Doing Business report series, visit
www.doingbusiness.org

Partners in this project:

FIAS,
the multidonor investment climate advisory service of the World Bank Group, is managed by IFC and supported by the Multilateral Investment Guarantee Agency and the World Bank.  FIAS integrates services that improve the business enabling environment in member countries. It advises governments of developing and transition countries on regulatory simplification, investment policy and promotion, and industry-specific investment climate issues. In its 20 years as a donor-funded operation, FIAS has completed more than 760 projects in all developing regions of the world. For more information, visit
www.fias.net.

USAID
is the principal U.S. government agency that provides economic, social, and humanitarian assistance worldwide. In Colombia, it supports the government’s efforts to achieve peace, promote economic prosperity, improve the living conditions of the most vulnerable groups, develop economic and social alternatives to production of illicit crops, and strengthen the presence and effectiveness of the state.


The National Planning Department defines and drives Colombia’s strategic vision on social, economic, and environmental development.  The mechanisms used to build this vision are the design, orientation, and evaluation of national public policies; the management and allocation of public investment; the design and implementation of private sector initiatives; and the articulation of such initiatives within government plans, programs, and projects.

The Ministry of Trade, Industry and Tourism has as its main objective to  develop, adopt, direct and coordinate general policies for the economic and social development of the country and its regions that are related to competitiveness, integration and development of the productive sectors of industry, micro, small and medium enterprises, trade in goods, services and technology, the promotion of foreign investment, domestic trade and tourism, as well as implement policies, plans, programs and foreign trade projects.


The Presidential Office for Competitiveness and Productivity is the agency responsible for coordinating the National Competitiveness System at the national and regional levels.   The Presidential Office advises the National Government on issues related to multilateral cooperation and the design of competitiveness-enhancing programs at country level in coordination with the Colombian Agency for International Cooperation, Proexport, and other relevant agencies. Additionally, it supports the National Government in promoting foreign investment into the country in coordination with the Ministry of Trade, Industry and Tourism as well as making the recommendations deemed convenient in order to ensure the competitiveness of domestic products around the world in coordination with the Ministry of Trade, Industry and Tourism, Proexport, and other relevant agencies.
Partner Contacts:

Germán Acevedo
United States Agency for International Development (USAID)
Phone: 571-3150811 ext. 4102.
E-mail: Gacevedo@usaid.gov

Luz Dary Madrońero
National Department of Planning, Colombia
Phone: 571- 5960336 or 5960300 ext 5011.
E-mail: lmadronero@dnp.gov.co

Anamaría Romero
Ministry of Trade, Industry and Tourism of Colombia
Phone: 571-6067676 ext 1240.
E-mail: aromero@mincomercio.gov.co

Fabio Valencia Cossio, High Commissioner, Presidential Office for Competitiveness and Productivity
Colombia Presidential Office for Competitiveness and Productivity
Phone: 571-5659416.
E-mail: fabiovalencia@presidencia.gov.co