COLOMBIA: STRATEGIC PARTNER FOR OUTSOURCING Luis Carlos Villegas President National Business Association of Colombia MAY 2011
1. Colombia: A country building its future 2. The Latin American context 3. Recent economic performance 4. Main challenges 3
1. Colombia: A country building its future 4 4
In one decade Colombia has been transformed 5
COLOMBIA: MAIN INDICATORS 2000 2010 GDP GDP(US$ Millions) 94.075 288.189 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$) 2.385 6.333 Security Insecurity problem in industrial survey 12,4 0,0 Foreign Trade Exports (US$ Millions) 13.158 39.820 Non Traditional (US$ Millions) 6.393 14.468 Imports (US$ Millions) 11.539 40.683 International Reserves 9.004 28.452 Months of imports 9,4 9,1 Investment Investment (% GDP) 14,5 25,1 Foreign Direct Investment (US$ Millions) 2.436 6.760 FDI (% GDP) 2,6 2,3 Debt (% GDP) Foreign Debt (% GDP) 38,5 22,6 Fiscal Debt (% GDP) 31,6 24,9
COLOMBIA: MAIN INDICATORS 2000 2010 Macroeconomic Environment Inflation 8,8 3,2 Deposit interest rate (yearly average) 12,1 3,5 Tasa de cambio promedio (US/$) 2.087,4 1.897,9 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) 16.169,0 19.215,2 Employees private sector 6.586,9 8.346,3 Global participation rate 61,8 62,9 Social Indicators Affiliates to health services (thousands) 23.919,7 41.500,0 Affiliates to proffesional risk services (thousands) 3.788,9 7.036,0 Welfare family institutions 3.322,9 6.034,0 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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COLOMBIA: FREE TRADE & ECONOMIC PARTNERSHIP AGREEMENTS Integration FTA Partial Scope Agreements BIT or double taxation treaties 15
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2002 2003 2004 2005 2006 2007 2008 2009 % POPULATION BELOW THE POVERTY LINE COLOMBIA: POVERTY RATE 60 53,7 SOURCE: DANE, DNP 50 51,2 51,0 50,3 49,0 47,0 40 30 32,4 30,4 20 10 Note: The data for 2008 and 2009 include the subsidies granted to the lower income groups.
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2. The Latin American context
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 $22,000 a year at purchasing - power parity. By then Brazil may be the world s fifthbiggest economy, behind only China, The United States, India and Japan. Half a dozen countries may have achivied developed-country status, with an income equivalent to Spain s today. September 11 th 17 th 2010 01.06.11 22
Main Economic Indicators 2010 GDP (US$ Millions) Population GDP per capita FDI International Reserves BRASIL 2.089.829 193 10.814 48.462 288.575 MÉXICO 1.098.816 109 10.115 17.726 113.597 ARGENTINA 368.399 41 9.092 6.200 52.190 COLOMBIA 288.189 46 6.332 6.760 28.452 VENEZUELA 233.218 29 7.992-1.404 29.500 CHILE 203.064 17 11.813 15.096 27.864 PERÚ 157.377 30 5.196 7.328 44.105 ECUADOR* 61.489 14 4.296 164 2.622 SOURCES: IMF y Central Banks of the different countries *: SOURCE GDP: IMF
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 ECONOMIC GROWTH: LATIN AMERICA & COLOMBIA (Index 1999=100) 160 150 SOURCE: ECLAC 140 130 120 110 100 90 Colombia Latin America & Caribbean 24
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COLOMBIA: GDP GROWTH RATE Share 2007 2008 2009 2010 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
ECONOMIC GROWTH ACCORDING TO EXPENDITURE 2007 2008 2009 2010 TOTAL GDP 6.9 3.5 1.5 4.3 Imports 14.0 10.5-7.3 14.7 Consumption 7.0 3.5 1.4 4.4 Households 7.3 3.5 0.9 4.3 Domestic Consumption 6.9 3.4 1.1 4.4 Non-durable goods 4.7 2.7 1.3 1.6 Semi-durable goods 6.6 2.0-3.7 15.7 Services 7.2 4.2 2.2 3.2 Durable goods 26.5 2.2-5.9 21.1 Government 6.0 3.3 3.5 4.7 Investment 14.4 9.9-0.8 7.1 Agriculture 0.5 3.9 2.2 1.2 Machinery 25.4 15.0-13.0 17.9 Transportation equipment 27.2-0.3-7.2 20.2 Housing 2.7 13.2-4.3-3.7 Infrastructure 14.7 6.6 15.5 7.2 Services 5.3 2.4 0.1 4.2 DOMESTIC DEMAND 8.3 4.7 0.4 5.9 Exports 6.9 4.5-2.2 2.2 SOURCE: DANE, National Accounts 30
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COLOMBIA: FOREIGN TRADE (US$ Millions) January-March Growth rate 2011 2010 Jan-Mar March Total Exports 12.629 9.135 38,2 46,5 Traditional 8.765 5.636 55,5 71,1 Coffee 832 409 103,3 88,4 Oil 5.932 3.653 62,4 96,3 Coal 1.788 1.378 29,8 7,6 Ferronickel 214 196 8,8-14,7 Non traditional 3.864 3.499 10,4 12,5 Industrial 3.214 2.899 10,9 18,7 January-March 2011 2010 Total Imports 12.189 8.811 38,3 39,9 Consumption goods 2.389 1.790 33,5 32,5 Raw Materials 5.147 3.773 36,4 22,5 Capital goods 4.647 3.243 43,3 65,2 35
NON TRADITIONAL EXPORTS (January-March US$ Millions) Year 2010 2011 2010 Variation Share Value % 2011 2010 Total 14.468 3.864 3.499 365 10,4 100,0 100,0 Total (excl Venezuela) 13.255 3.608 3.140 469 14,9 Countries with lower exports from Colombia Venezuela 1.213 255 359-103 -28,8 6,6 10,3 France 57 10 22-12 -52,5 0,4 0,6 Switzerland 192 201-9 -4,6 6,5 5,8 China 284 88 96-8 -8,1 2,4 2,7 Canada 90 22 30-8 -25,2 0,6 0,9 Portugal 56 8 15-7 -47,7 0,7 0,4 United Kingdom 228 60 65-5 -7,6 1,6 1,9 Belgium 210 52 56-4 -7,1 1,7 1,6 Subtotal 2.571 795 955-159 Countries with greater exports from Colombia Ecuador 1.586 459 340 119 34,8 8,3 9,7 Brazil 653 228 121 107 88,7 3,6 3,5 United States 4.117 1.038 977 61 6,2 27,9 27,9 Chile 422 132 84 48 57,0 2,8 2,4 Italy 192 74 34 40 116,4 1,3 1,0 Rest of countries 1.679 446 415 31 7,5 11,3 11,9 Bolivia 106 47 22 25 114,2 0,8 0,6 Spain 157 59 40 19 47,3 1,1 1,1 Germany 159 61 42 18 43,6 1,0 1,2 Mexico 496 143 125 18 14,4 4,2 3,6 Peru 920 231 215 16 7,5 6,7 6,2 Argentina 90 27 18 9 53,3 0,6 0,5 Japan 86 25 21 4 19,0 0,5 0,6 Uruguay 14 4 2 3 155,0 0,0 0,0 Subtotal 11.060 3.068 2.544 525
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4. Main Challenges Colombia: A reliable country for investors and the gateway for outsourcing services 43 43
WHAT DO WE WANT? To position Colombia as the ideal Hub, offering BPO&IT world class services!! 01.06.11 44
The Chamber was founded in 2009. 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.
Source: Chamber of BPO&IT - ANDI Industry Development
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
Targets Competitive growth rate Colombia Provides: Professional Development Different markets Public Private Partnership Strategic International alliances, FDI and job creation Regional development
Regional impact of FDI on BPO&IT Company Investment Aprox (USD) Country Sector City TELEPERFORMANCE 30.000.000 ARGENTINA BPO Bogotá/Medellín TELEMARK 3.000.000 ESPAÑA BPO Pereira/Cali AVANZA BPO 3.500.000 ESPAÑA BPO Bogotá EMERGIA 2.500.000 ESPAÑA BPO Manizales CONVERGYS 3.000.000 USA BPO Bogotá VSI Holdings 1.500.000 USA BPO Barranquilla SUTHERLAND 1.000.000 INDIA BPO Barranquilla DIRECT TV 9.000.000 USA BPO Cali DIVEO 18.000.000 USA/BRASIL TELCO Bogotá Source: Proexport, ANDI calculations
Regional impact of FDI on BPO&IT Company Investment Aprox (USD) Country Sector City IBM* 4.000.000 USA BPO&IT Medellín TCS * 500.000 INDIA BPO Medellín HP* TBD USA ITO Medellín UNISYS* 1.400.000 USA ITO Medellín SEONTI* 1.000.000 MEXICO ITO Medellín ALLUS- CONTAX* 2.200.000 USA/ARGENTINA/BRASIL BPO Medellín Source: Proexport, ACI, ANDI calculations * Forecast estimates varies for 2009-2011
Targets Competitive growth rate Colombia Provides: Professional Development FDI and job creation Regional development Professional Development Different markets Public Private Partnership Strategic International alliances
BPO&IT = PEOPLE, therefore... COMPETITIVINESS, INNOVATION AND ABOVE ALL COLLABORATION IS THE KEY!! We want Global Ready Professionals
Source: Chamber of BPO&IT - ANDI Job Creation
Hub of the Americas on BPO&IT 01.06.11 59
We offer a variety of outsourcing destinations for nearshore or offshore services, with cluster development and sustainable growth.
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Strategic Information and Knowledge 01.06.11 64
Información, Cultura y Delivering Conocimiento results 01.06.11 65
Información, Cultura y Adapting Conocimiento clients needs 01.06.11 66
Strategic Information and Información, Knowledge Cultura y Conocimiento 01.06.11 67
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