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Colombia’s New President

Colombia’s New President Santos Carries on Uribe’s Business-Friendly Legacy

On August 7, 2010, Juan Manuel Santos was inaugurated as the 40th president of Colombia, succeeding President Alvaro Uribe, whose two-term presidency began in 2002. The election of Santos, who holds degrees from Harvard, the Fletcher School of Law and Diplomacy and the London School of Economics, demonstrates the overwhelming support of Colombians for the security and economic policies of the Uribe administration that brought about a dramatic transformation of the country over the past decade.

Under Uribe’s tenure, security in the country increased exponentially, foreign direct investment rose by more than 400 percent between 2002 and 2009, and Colombian exports tripled between 2002 and 2008. Reforms to improve transparency and efficiency in the country’s regulatory environment, strengthen property rights and investor protections, and create tax incentives for investment earned Colombia the designation of the best business environment in Latin America this year by the World Bank.

According to a survey conducted by the Latin Business Chronicle, local and foreign investors benefited greatly from the economic and security policies of President Alvaro Uribe. Companies increasing their investments in the country or growing their presence in Colombia during Uribe’s presidency include:

• UK-based InterContinental Hotels Group, which signed numerous franchise agreements with local Colombian enterprises that are also positive about the country’s business climate;
• The LACSA division of American-based Unisys, which changed its operations from maintenance to investment as a result of Uribe’s business-friendly policies;
• McDonald’s, whose presence in the country rapidly grew over the course of Uribe’s eight-year term; Arcos Dorados, the world’s largest McDonald’s franchise based in Argentina, doubled the number of its points of sales in Colombia, including new restaurants, dessert centers and McCafes;
• U.S. pharmaceutical and healthcare equipment maker Baxter, which reported that Uribe’s policies “improved government transparency and helped grow investments in healthcare, which led to significant improvements in patient care across the country;”
• UK-based Standard Chartered Bank, which saw higher volumes of trade, financing requirements, capital markets and treasury transactions;
• US-based Cisco, which saw solid growth in Colombia; and
• Germany-based SAP, the world’s largest business software maker, whose Colombia-based business nearly quadrupled, making Colombia a top-priority market for the company globally.

Business leaders are confident that the strides made by the Uribe administration will continue under President Santos. “The transformation of the Colombian economy under the Uribe Administration allowed foreign investors to change their perceptions of the country and see Colombia as an emerging location for secure investment,” said Jaime Echavarria, Director of Proexport - Colombian Government Trade Bureau, the entity responsible for promoting foreign direct investment in the country. “We are confident that President Santos will continue to strengthen the new economic reality in Colombia.”

Inheriting an economy that has seen a trend toward stable yet significant growth during the past eight years, President Santos plans to raise economic growth in the country to 6% within two years.  Experts forecast growth for the country in 2010 at 3% to 3.5%, with both exports and foreign direct investment on pace to reach record levels this year of $40 billion and $10 billion, respectively.