If there is a kind of mantra that has prevailed over the Colombian economy in the last two years, it is that the arrival of the first left-wing government to power has undermined confidence. The former Ministers of Finance, the think tanks, the financial entities, all almost in unison, point the finger at the social and reformist agenda of the Executive as synonymous with risk to legal security and the investment environment. However, the Business Ready 2024 report, prepared by the World Bank and published last week, gives the country an acceptable grade and challenges many of the most pessimistic theses of the traditional ruling class. But it also refutes President Petro's continuous shots against the current framework. When averaging the three pillars analyzed by the study, the country (or economy, in the terminology of the document) occupies 12th place among 50 nations taken into account for prepare the ladder. Data collection was carried out from May to October 2023 and included the voice of more than 2,500 experts in financial matters who provided more than 29,000 responses about the state of the business world (about 1,000 companies were interviewed in Colombia alone). It is worth remembering, at this point, that this is the reissue, with a new name, of the controversial Doing Business, the old report that the World Bank had to cancel in 2021, after complaints from a high-ranking member of the organization who found pressures on its employees to improve the classification of some countries. Eduardo Lora, former chief economist of the Inter-American Development Bank, qualifies the scope of the publication. “Petro will not like this either, because it shows him how well different aspects of the country's legislation and productive activity have been built. That is a great asset and this document is demonstrating it.” The system that the president criticizes so much, Lora continues, has very solid foundations for the private sector to function as an essential lever of the economy. “That is not destroyed overnight,” he concludes. Colombia passed the exam in 6 of the 10 areas used by the World Bank in its renewed methodology. And it ranked second, only below Costa Rica, in the indicator called Market Competition, which judges regulatory matters. Namely: quality in the provision of public services as an incentive for competition and regulatory effectiveness as a dynamo of entrepreneurship. Former Minister of Finance Mauricio Cárdenas (2012-2018) participated in the Business Ready presentation at the bank's headquarters in Washington, where he stressed that the results should not be interpreted as a ranking of countries, but as an analysis methodology for the governments of the world. A set of indicators that could be used to improve the design of public policies. Each one read in the light of its own context and the lane that corresponds to it on the map.
The usual problems
The World Bank itself, in fact, has reported this week that its growth prospects for this year in Colombia range between 1.3% and 1.5% (last year it was 0.7%). That is why Sergio Guzmán, director of the Colombia Risk think tank, assures that the portrait of Business Ready 2024 is nothing more than a still photo of a country without apparent drastic changes. “The Government has done nothing to improve the situation. We are not doing very well on labor issues, but Petro has not intervened either because his reform has not been approved. In financial services, neither,” continues Guzmán. He also relativizes the results: “The risks of doing business in Colombia vary greatly depending on geographic location. Investing in Bogotá is not the same as investing in Chocó. Or in the mining sector, where an investor today can take ten years to obtain an environmental permit or license.” That is why the good rating in the Business Location line, which judges the ease of obtaining construction licenses, is somewhat surprising. environmental or property. Eduardo Lora emphasizes that the results are not a reflection of a moment. “It is a very serious and respectable work that evaluates structural matrices. How easy is it to do business? How strong are regulations in financial services? How efficient are the arbitration or dispute resolution courts?” Legislative and regulatory issues to which sustainability, environmental and technology adoption issues in public administration have now been added. After multiple criticisms for its methodological imperfections, the publication of the report returns in a world that has so far been shaken by the period of the health crisis. And if the country has passed 6 of the 10 tests, in the remaining 4 there are no big surprises: “We look bad on the labor issue, on taxes and on international trade issues,” concludes Eduardo Lora, “and that has always been said. That is the panorama of Colombia. And the Colombian business community may be frustrated, and so may Petro, but these are things that have always been said and now the World Bank has ratified them again.”