COLOMBIA: STRATEGIC PARTNER FOR OUTSOURCING. Luis Carlos Villegas President National Business Association of Colombia MAY 2011

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2 COLOMBIA: STRATEGIC PARTNER FOR OUTSOURCING Luis Carlos Villegas President National Business Association of Colombia MAY 2011

3 1. Colombia: A country building its future 2. The Latin American context 3. Recent economic performance 4. Main challenges 3

4 1. Colombia: A country building its future 4 4

5 In one decade Colombia has been transformed 5

6 COLOMBIA: MAIN INDICATORS GDP GDP(US$ Millions) GDP Public Sector (%) 26,5 23,0 GDP Private Sector (%) 73,5 77,0 Economic Growth rate 2,9 4,3 Población (Millones) 39,4 45,5 GDP per cápita (US$) Security Insecurity problem in industrial survey 12,4 0,0 Foreign Trade Exports (US$ Millions) Non Traditional (US$ Millions) Imports (US$ Millions) International Reserves Months of imports 9,4 9,1 Investment Investment (% GDP) 14,5 25,1 Foreign Direct Investment (US$ Millions) FDI (% GDP) 2,6 2,3 Debt (% GDP) Foreign Debt (% GDP) 38,5 22,6 Fiscal Debt (% GDP) 31,6 24,9

7 COLOMBIA: MAIN INDICATORS Macroeconomic Environment Inflation 8,8 3,2 Deposit interest rate (yearly average) 12,1 3,5 Tasa de cambio promedio (US/$) 2.087, ,9 Tasa de cambio real 119,1 101,3 Devaluación nominal 19,0-12,0 Devaluación real 8,4-8,3 Labour Market Unemployment rate 16,7 11,1 Employees (yearly average) , ,2 Employees private sector 6.586, ,3 Global participation rate 61,8 62,9 Social Indicators Affiliates to health services (thousands) , ,0 Affiliates to proffesional risk services (thousands) 3.788, ,0 Welfare family institutions 3.322, ,0 Poverty rate (includes subsidies in 2010) 55,0 30,4 Gini Index (includes subsidies in 2010) 0,58 0,52 Human Development Index 0,640 0,690 Education (gross coverage rate) Primary, middle and high school (to 11th grade) 90,6 104,7 University schooling 24,4 35,5 Iliteracy rate 7,6 6,0

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15 COLOMBIA: FREE TRADE & ECONOMIC PARTNERSHIP AGREEMENTS Integration FTA Partial Scope Agreements BIT or double taxation treaties 15

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19 % POPULATION BELOW THE POVERTY LINE COLOMBIA: POVERTY RATE 60 53,7 SOURCE: DANE, DNP 50 51,2 51,0 50,3 49,0 47, ,4 30, Note: The data for 2008 and 2009 include the subsidies granted to the lower income groups.

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21 2. The Latin American context

22 OUR DECADE AND OUR CHANCE!! Marketing people are beginning to talk about a Latin American decade If the region can keep up the growth of the past few years, it will double its income per person by 2025, to an average of $22,000 a year at purchasing - power parity. By then Brazil may be the world s fifthbiggest economy, behind only China, The United States, India and Japan. Half a dozen countries may have achivied developed-country status, with an income equivalent to Spain s today. September 11 th 17 th

23 Main Economic Indicators 2010 GDP (US$ Millions) Population GDP per capita FDI International Reserves BRASIL MÉXICO ARGENTINA COLOMBIA VENEZUELA CHILE PERÚ ECUADOR* SOURCES: IMF y Central Banks of the different countries *: SOURCE GDP: IMF

24 ECONOMIC GROWTH: LATIN AMERICA & COLOMBIA (Index 1999=100) SOURCE: ECLAC Colombia Latin America & Caribbean 24

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29 COLOMBIA: GDP GROWTH RATE Share Agriculture 6,5 3,9-0,4-1,1-0,0 Mining 8,1 1,5 9,7 11,4 11,1 Oil and gas 5,5 0,3 15,4 15,4 16,9 Manufacturing 13,9 7,2 0,5-3,9 4,9 Utilities 4,0 4,1 0,5 2,9 2,2 Construction 7,4 8,3 8,8 8,4 1,9 Housing 3,7 1,6 13,3-1,7-3,3 Infrastructure 3,7 15,8 4,2 20,1 6,2 Retail trade, restaurants & hotels 11,6 8,3 3,1-0,3 6,0 Transport, communication & warehousing 6,3 10,9 4,6 0,4 4,8 Finance, insurance and real estate 18,7 6,8 4,5 1,8 2,7 Banking sector 4,5 6,9 3,8 1,0 3,9 Government, social and personal services 15,4 5,0 2,6 2,7 4,1 Health 2,1 2,9 3,0 4,4 4,4 GDP 100,0 6,9 3,5 1,5 4,3 29

30 ECONOMIC GROWTH ACCORDING TO EXPENDITURE TOTAL GDP Imports Consumption Households Domestic Consumption Non-durable goods Semi-durable goods Services Durable goods Government Investment Agriculture Machinery Transportation equipment Housing Infrastructure Services DOMESTIC DEMAND Exports SOURCE: DANE, National Accounts 30

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35 COLOMBIA: FOREIGN TRADE (US$ Millions) January-March Growth rate Jan-Mar March Total Exports ,2 46,5 Traditional ,5 71,1 Coffee ,3 88,4 Oil ,4 96,3 Coal ,8 7,6 Ferronickel ,8-14,7 Non traditional ,4 12,5 Industrial ,9 18,7 January-March Total Imports ,3 39,9 Consumption goods ,5 32,5 Raw Materials ,4 22,5 Capital goods ,3 65,2 35

36 NON TRADITIONAL EXPORTS (January-March US$ Millions) Year Variation Share Value % Total ,4 100,0 100,0 Total (excl Venezuela) ,9 Countries with lower exports from Colombia Venezuela ,8 6,6 10,3 France ,5 0,4 0,6 Switzerland ,6 6,5 5,8 China ,1 2,4 2,7 Canada ,2 0,6 0,9 Portugal ,7 0,7 0,4 United Kingdom ,6 1,6 1,9 Belgium ,1 1,7 1,6 Subtotal Countries with greater exports from Colombia Ecuador ,8 8,3 9,7 Brazil ,7 3,6 3,5 United States ,2 27,9 27,9 Chile ,0 2,8 2,4 Italy ,4 1,3 1,0 Rest of countries ,5 11,3 11,9 Bolivia ,2 0,8 0,6 Spain ,3 1,1 1,1 Germany ,6 1,0 1,2 Mexico ,4 4,2 3,6 Peru ,5 6,7 6,2 Argentina ,3 0,6 0,5 Japan ,0 0,5 0,6 Uruguay ,0 0,0 0,0 Subtotal

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43 4. Main Challenges Colombia: A reliable country for investors and the gateway for outsourcing services 43 43

44 WHAT DO WE WANT? To position Colombia as the ideal Hub, offering BPO&IT world class services!!

45 The Chamber was founded in Our members employ around 40,966 people providing voice and non voice BPO&IT portfolio of national and global companies offering outsourcing, nearshore and offshore services with approximately USD 704 million on operating income in 2010.

46 Source: Chamber of BPO&IT - ANDI Industry Development

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48 We have developed partnerships with key actors leading to the creation of the IAOP Colombia Chapter ( The only one in Latin America!) and we Chair the Regional Advisory Board Latin America We signed a Memorandum of Understanding on cooperation with the global leaders of the industry in order to develop a strategic partnership, and to strengthen the Colombian outsourcing brand in the global market

49 Targets Competitive growth rate Colombia Provides: Professional Development Different markets Public Private Partnership Strategic International alliances, FDI and job creation Regional development

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53 Regional impact of FDI on BPO&IT Company Investment Aprox (USD) Country Sector City TELEPERFORMANCE ARGENTINA BPO Bogotá/Medellín TELEMARK ESPAÑA BPO Pereira/Cali AVANZA BPO ESPAÑA BPO Bogotá EMERGIA ESPAÑA BPO Manizales CONVERGYS USA BPO Bogotá VSI Holdings USA BPO Barranquilla SUTHERLAND INDIA BPO Barranquilla DIRECT TV USA BPO Cali DIVEO USA/BRASIL TELCO Bogotá Source: Proexport, ANDI calculations

54 Regional impact of FDI on BPO&IT Company Investment Aprox (USD) Country Sector City IBM* USA BPO&IT Medellín TCS * INDIA BPO Medellín HP* TBD USA ITO Medellín UNISYS* USA ITO Medellín SEONTI* MEXICO ITO Medellín ALLUS- CONTAX* USA/ARGENTINA/BRASIL BPO Medellín Source: Proexport, ACI, ANDI calculations * Forecast estimates varies for

55 Targets Competitive growth rate Colombia Provides: Professional Development FDI and job creation Regional development Professional Development Different markets Public Private Partnership Strategic International alliances

56 BPO&IT = PEOPLE, therefore... COMPETITIVINESS, INNOVATION AND ABOVE ALL COLLABORATION IS THE KEY!! We want Global Ready Professionals

57 Source: Chamber of BPO&IT - ANDI Job Creation

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59 Hub of the Americas on BPO&IT

60 We offer a variety of outsourcing destinations for nearshore or offshore services, with cluster development and sustainable growth.

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64 Strategic Information and Knowledge

65 Información, Cultura y Delivering Conocimiento results

66 Información, Cultura y Adapting Conocimiento clients needs

67 Strategic Information and Información, Knowledge Cultura y Conocimiento

68 Challenges Human capital development Multilingual (English and Portuguese) Prioritize BPO&IT Portfolio of Colombia Promote Innovation Culture Encourage use of BPO&IT among industries and companies Develop and offer valued adding services Socially Responsible Outsourcing

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