Trade minister Luis Guillermo Plata gets energised when describing the rapid improvement of conditions in Colombia. Citing examples of how exports have doubled, tourism has tripled and FDI flows exceeded $8bn this year, he proudly explains the new set of tools that he thinks will make Colombia even more attractive as an investment destination.

Mr Plata was in Europe recently to represent Colombia in negotiations between the EU and the Andean Community and to meet with British trade authorities, the UK being the second biggest investor in Colombia after the US. Colombia’s economy has been expanding resiliently since President Álvaro Uribe took power in 2002 and, while some problems persist, now provides relative security alongside its long-established macroeconomic stability.

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Mr Plata was one of many who left successful careers abroad to return and take part in improving the country. “I heard Uribe speak candidly with gutsy examples of how he would tackle the country’s problems. His commitment and straightforward ideas inspired me and I volunteered to help. I was then offered a job in Proexport, the Colombian export promotion agency,” he says.

Homegrown talent returns

Mr Plata’s story is evidence of how Colombia is attracting its brightest people back. He revolutionised Proexport, expanded its remit and made it into one of the most effective agencies of its type in the world, and was later appointed minister. “We run Proexport as a corporation, not as a government agency, and we aligned our employees’ individual incentives with those of the country, creating an optimum work environment,” he says.

He is convinced that Colombia is the most attractive country for investments in the region and believes that two new tools make it even more so. “We have listened to investors and worked hard to find solutions to the perceived main risks of Colombia and the region. These tools are the answer; they are not simple gimmicks but present real benefits,” he says.

The first such tool is the Single Enterprise Free Trade Zone, which makes available all the benefits of a free trade zone (such as lower income tax, no import duties and no VAT) to any company that meets the investment criteria, no matter where they are located in Colombia. The second innovative tool is the Legal Stability Contract, by which the nation guarantees that the existing conditions of an investment will be maintained for 20 years, regardless of changes in government or new tax reforms. The only exception is if conditions improve, in which case a company can lock into the superior conditions.

Trade agreements

Uncertain prospects for a free trade agreement (FTA) with the US seem to put a dent in the rosy economic picture but Mr Plata, while accepting that the FTA is an essential element of Mr Uribe’s economic plan, argues: “We have not put all of our eggs into one basket and expect to have signed nine important trade agreements by 2010 with a total of 54 countries.”

Indeed, Mr Plata continues to get enthused by the facts on the ground: “Investments are increasing exponentially, both into traditional areas like mining and oil by the likes of BHP Billiton or BP, and into other areas, with investments in airports and new hotels by companies such as Marriott, which is building five new hotels.

“We have already signed a few Legal Stability Contracts and there are over 20 in the pipeline. What’s more, these investment tools can be combined and you can lock into excellent conditions and reduced rates.”

CURRICULUM VITAE

LUIS GUILLERMO PLATA

2007 Colombian Government, Minister of commerce, industry and tourism

2006 Davos awards, Cited as ‘Young Global Leader’

2002 Proexport, President

2002 Returns to Colombia