Colombia throw the red carpet to american companies looking to relocate from Asia
- Twenty businesses have expressed interest in moving to country
Colombia enters new phase of lockdown to help economy recover
By Oscar Medina and Andrea Jaramillo/Bloomberg
Petroleumworld 09 03 2020
Colombia is setting its sights on companies from Asia to Europe and Latin America that are looking to relocate or expand into the Andean nation by offering tax incentives and making it easier to invest.
The initiative is part of a broader plan to attract $11.5 billion in non-hydrocarbon related foreign direct investment a year by 2022, from an average of about $9 billion. And as lockdown measures and travel restrictions to curb the spread of Covid-19 bankrupted thousands of businesses and propelled the urban unemployment rate up to almost 25%, Colombia is counting on new investments to push job creation and boost exports.
From an initial group of 250 potential candidates, the government has identified some 20 American companies that have expressed an interest in moving to the Andean nation, according to Commerce, Industry and Tourism Minister Jose Manuel Restrepo.
And while Colombia had already set a plan for businesses to relocate to within its borders, it coincides with President Donald Trump's push to bring companies back to the U.S. or its partners including Colombia that will be included in a pilot phase, according to Restrepo.
“What is absolutely clear is that the relocation strategy is a Colombian strategy,” Restrepo said in an interview. “We want to take advantage of Colombia's 17 free trade agreements to set the country as an export hub.”
The nation's geographic location with access to and ports in both the Atlantic and Pacific oceans is also a factor that helps attract investment.
The next step is to set up visits with the identified companies, most of which are located in Asia, Restrepo said. While he declined to name them, he said they are largely in fashion, technology information, metalworks, agroindustry and the pharmaceutical industry.
After the economy contracted a record 15.7% in the second quarter from a year earlier, Colombia this month is starting a new phase of the lockdown with more businesses allowed to reopen, counting on consumer demand to help drive the economic recovery, said Restrepo. Individuals are now allowed to go to shopping malls and restaurants and to travel by road and air, giving a much needed boost to industries including tourism, one of the most hit by the pandemic.
The government forecasts the economy will contract 5.5% this year and grow above 6% in 2021.
Despite one of the strictest lockdowns in the region, the economy's leading indicators including energy consumption and business confidence show that some sectors including manufacturing have already began to recover, he said.
Colombia has the seventh-highest number of confirmed Covid-19 cases in the world, with almost 625,000 infections, while the death toll exceeds 20,000.
“Until now, our great effort had been to reactivate the economy from the supply side,” Restrepo said. “Now there is a process of activating demand. This is a 180-degree turn from the model we had so far, which is very important.”