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
Strong performance, by global standards, on the time it takes to register
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
Statements from Partners in the Doing Business in Colombia 2008
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?
||Cali, Valle del Cauca
||Santa Marta, Magdalena
||Cúcuta, Norte de Santander
||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
For more information on the global Doing Business report series,
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
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.