Colombia : Country Economic Memorandum, The Foundations for Competitiveness

Since Colombia's last Country Economic Memorandum (CEM) (1989) the country has endured several years of slow growth, burgeoning fiscal deficits, and high levels of debt. Colombia now is seeking to join a free trade agreement (FTA) with the United States in the hope of stimulating growth and imp...

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Bibliographic Details
Main Author:	World Bank
Format:	Country Economic Memorandum
Language:	English en_US
Published:	Washington, DC 2012
Subjects:	ACCORDS ADJUSTMENT ASSISTANCE ADMINISTRATIVE PROCEDURES AGGREGATE DEMAND AGRICULTURAL PRICE AGRICULTURAL TRADE LIBERALIZATION AGRICULTURE ANNUAL GROWTH BUSINESS ENVIRONMENT CAPACITY UTILIZATION CAPITAL INFLOWS CAPITAL MARKETS CAPITAL STOCK COMMERCE COMPARATIVE ADVANTAGE COMPARATIVE DISADVANTAGE COMPETITIVENESS CONSUMPTION PATTERNS CORPORATE GOVERNANCE COUNTRY GROWTH CURRENCY DEBT DECENTRALIZATION DEFICITS DEVELOPING COUNTRIES DEVELOPMENT INDICATORS DEVELOPMENT STRATEGY DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPACT DOMESTIC CREDIT DOMESTIC ECONOMY DOMESTIC MARKETS DOMESTIC PRODUCTION DYNAMIC PANEL ECONOMIC ACTIVITIES ECONOMIC CONDITIONS ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC OPPORTUNITIES ECONOMIC PERFORMANCE ECONOMIC SHOCKS ECONOMIES OF SCALE EDUCATION LEVEL ESTIMATED REDUCTION EXCHANGE RATE EXPORT GROWTH EXPORT ORIENTATION EXPORT VOLUMES EXPORTERS EXPORTS EXTERNAL DEBT EXTERNAL SHOCKS FINANCIAL INSTITUTIONS FISCAL POLICY FISCAL RESPONSIBILITY FIXED EFFECTS FOREIGN DIRECT INVESTMENTS FOREIGN INVESTMENT FREE TRADE FREE TRADE AGREEMENT FREER TRADE GDP GDP PER CAPITA GOVERNMENT DEBT GOVERNMENT EXPENDITURES GROSS DOMESTIC PRODUCT GROWTH EFFECT GROWTH POTENTIAL GROWTH RATE GROWTH REGRESSION HIGH COST HOUSEHOLD INCOME HOUSEHOLD WELFARE HUMAN CAPITAL IMPACT OF TRADE IMPROVING PRODUCTIVITY INCOME INCOME CONVERGENCE INCOME COUNTRIES INCOME DISTRIBUTION INCOME SOURCE INCOME SOURCES INCOME TAX INCREASE GROWTH INDUSTRIAL DEVELOPMENT INDUSTRIAL PRODUCTION INDUSTRIAL PRODUCTIVITY INDUSTRIAL SECTOR INFLATION INFRASTRUCTURE FINANCING INFRASTRUCTURE INVESTMENT INSURANCE INTERNATIONAL COMPARISONS INTERNATIONAL MARKETS INTERNATIONAL STANDARD INTERNATIONAL TRADE INVESTMENT ACTIVITY INVESTMENT CLIMATE JUDICIAL SYSTEM LABOR FORCE LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MOBILITY LEGAL FRAMEWORK LEGAL RULES LOCAL AUTHORITIES LOCAL GOVERNMENTS LONG RUN MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC VARIABLES MARKET COMPETITION MARKET COUNTRIES MARKET OPENING MARKET POSITION MARKETING MERCHANDISE MERCHANDISE EXPORT MINIMUM WAGE MONEY LAUNDERING MULTILATERAL TRADE OIL PRICES OPEN ECONOMY OPEN MARKETS OPEN TRADE OPENNESS PANEL REGRESSIONS PER CAPITA GROWTH POLICY CHANGES POLICY ENVIRONMENT POLICY REFORMS POLITICAL ECONOMY POLITICAL INSTITUTIONS POSITIVE GROWTH POSITIVE IMPACT POTENTIAL BENEFITS POVERTY RATES POVERTY REDUCTION PRICE CHANGE PRICE CHANGES PRIVATE SECTOR PRODUCER PRICE PRODUCT DIFFERENTIATION PROPERTY RIGHTS PUBLIC PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEW PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SECTOR DEFICIT PUBLIC SPENDING RAPID INCREASE REAL GDP REAL OUTPUT RECIPROCAL REDUCTION REDUCED POVERTY REDUCING POVERTY REDUCING TRANSACTIONS COSTS REGRESSION ANALYSIS REGRESSION RESULTS REGULATORY FRAMEWORK RESTRICTIVE RULES OF ORIGIN ROADS RULE OF LAW RULES OF ORIGIN SHORT-TERM IMPACT SIGNIFICANT IMPACT SOCIAL SECURITY SOCIAL SERVICES STANDARD OF LIVING STRUCTURAL REFORMS SUBNATIONAL GOVERNMENTS TAX TAX BASE TAX EXEMPTIONS TAX RATES TAX REFORM TAX REVENUE TAX SYSTEM TAXATION TECHNOLOGICAL CHANGE TECHNOLOGICAL DEVELOPMENT TOTAL FACTOR PRODUCTIVITY TRADE ASSISTANCE TRADE BALANCE TRADE BARRIERS TRADE CLASSIFICATION TRADE FLOWS TRADE LIBERALIZATION TRADE PREFERENCE TRADE PROMOTION TRADE REFORM TRADING OPPORTUNITIES TRANSACTIONS COSTS TRANSITIONAL COSTS TRANSPARENCY TRANSPORT TRANSPORTATION UNEMPLOYMENT UNEMPLOYMENT RATES VALUE ADDED VALUE-ADDED TAX WAGES WEALTH WELFARE GAINS
Online Access:	http://documents.worldbank.org/curated/en/2005/11/6881242/colombia-country-economic-memorandum-foundations-competitiveness http://hdl.handle.net/10986/8807

Description
Summary:	Since Colombia's last Country Economic Memorandum (CEM) (1989) the country has endured several years of slow growth, burgeoning fiscal deficits, and high levels of debt. Colombia now is seeking to join a free trade agreement (FTA) with the United States in the hope of stimulating growth and improving living conditions for the country as a whole. In response to the opportunities and challenges presented by the proposed FTA with the United States, the Colombian government has launched an "internal agenda," an action plan that involves major stakeholders -- public sector, private sector, and regional government -- aimed at obtaining greater levels of competitiveness. The government has articulated the need for greater understanding of the impact of the proposed FTA, and a strategy for a reform agenda that would enable the country to capture the potential benefits from freer trade and facilitate the transition to greater openness. This report is produced as an input into Colombia's reform agenda. It starts with an executive summary and policy report which presents the main findings and key policy recommendations of the three chapters comprising the report. Chapter 1 evaluates Colombia's business and growth environment and the likely challenges the manufacturing sector will face in taking advantage of the FTA with the United States. The chapter consists of three sections. Section I uses detailed survey data to identify the top constraints on growth and competitiveness of Colombian firms. Section 2 analyzes key developments in the manufacturing sector following the trade liberalization of 1990-91 using micro-level data, and highlights areas where reforms are needed. Section 3 examines the challenges and opportunities faced by small and medium-sized businesses in confronting a more open trading environment. Chapter 2 builds on the microeconomic issues raised in the first chapter, and follows with an evaluation of macroeconomic and fiscal (tax and expenditure) policies that are important for making the Colombian economy competitive. In this context, the study also evaluates the sustainability and trajectory of public debt. Finally, Chapter 3 examines the likely impact of agricultural liberalization on income distribution in the country under the proposed Colombian-U.S. FTA -- identifying who are the likely gainers and losers -- and assesses its impact on economic growth and poverty in the country.

Colombia : Country Economic Memorandum, The Foundations for Competitiveness

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