1.1. ECONOMIC FORCES
This are some of the factors that affect our company. If you are a stakeholder of our company please refer to this information if you want to have a better understanding of the factors that give us advantages and disadvantages in the industry.
This information is up to date with 2015-2016 figures, news and analysis of the market taking several government, private analists and local and international news, that let us analize what our best bet is, and how to act in the ever changing market.
FORCES
Bogotá has a high demand for the service industry with the introduction of 4g technology, the country has now come to have more market for the service industry knowing that its a better and faster way to acces any service easier than you would with other technologies we have been using up until now.
More over Colombia is one of the only few countries in the area that seems to be prepared for a new ecenomic crisis that could hit later in 2016. This is mostly due to the fact that we are mainly an agricultural economy and are yet to see the negative effects of the sever drought hitting the tropics.
Our target clients haevnt been affected by any of the difficult conditions that the current year can present and we are confiden that even during the moments of crisis, our target clients will still be on high economic ground, if so, opening an important job oportunitie for those people that will be affected later this year by the challenges presented this year.
While Colombia’s economic growth is well beneath the average of registered GDP increases in previous years, it continues to be among the top performers in the region, the IMF said.
Colombia’s economic growth is likely to slump to 2.7% this year and should prepare for an “extended period” of economic slowdown, the International Monetary Fund (IMF).
http://colombiareports.com/colombias-economy-to-slow-down-further-in-2016/
1.Propensity of people to spend
2.Shift to a service economy in Colombia
Colombia’s average tariff rate is 4.5 percent. Restrictions affect some service-sector industries. Foreign and domestic investors are generally treated equally under the law. State-owned enterprises are active in the energy sector. Private institutions dominate the growing and well-capitalized financial sector. The number of non-performing loans has declined, and the financial transaction tax is scheduled to be reduced.
Colombia’s unemployment rate decreased 0.6% in May to the lowest rate seen in 14 years, according to figures from Colombia’s national statistics agency. In May, Colombia’s unemployment rate was 8.8%, which is a decrease of 0.6% compared to 9.4% in the same month in 2013.With 21.4 million people employed in May, Colombia saw a job creation increase of 156,000 compared to 2013, according to figures from Colombia’s national statistics agency DANE. This is the lowest unemployment rate the country has seen since 2000.
This is a good thing, by proving that the unemployment has lowered, the services have improved so the economy as a hole has improved making an easier way to new business be more successful in a more stable economy.
http://colombiareports.com/colombias-april-unemployment-drops-9-lowest-14-years/
3.Level of disposable income
Colombia’s economy has done remarkably well over the last decade. Strong growth was driven by an oil and mining boom, foreign direct investment in the commodity sector and broad-based investment. Bilateral free trade agreements and unilateral measures have continued to reduce barriers to trade and investment. A solid monetary, fiscal and financial framework reduced macroeconomic volatility, which characterised the previous decades. The improved security situation has also contributed to growth. All this has allowed fast catch-up growth in GDP per capita relative to OECD economies. However, productivity and investment outside oil and mining remains subdued, due to a high tax burden on corporations and labour, inadequate infrastructure, and limits to access to finance. Inequality and informality, and old-age poverty remain among the highest in Latin America, despite recent progress in overall poverty reduction. The minimum wage is high relative to earnings, pushing low skilled workers, youth, and those in less developed regions into the informal sector. Although declining to historical lows, structural unemployment remains high by international comparison, reducing the population’s well-being
Colombia’s disposable income and expenditure levels expanded at a slower pace than regional averages over the period of 2009-2014. Nevertheless, positive reforms to the country’s business climate, coupled with lower levels of political violence, are expected to back growth of income and expenditure in Colombia during the long term. The expansion of the country’s middle class is having a marked impact on spending patterns, although income inequality in Colombia remains extremely high.
Although in a study made in 2010, Colombia was the country in Latin America with the biggest poorest rate, in the present days the economy has evolved and improved in some aspects, improving the disposable income in a stunning way, mostly on middle class people.
http://www.euromonitor.com/income-and-expenditure-colombia/report http://www.oecd.org/eco/surveys/Overview_Colombia_ENG.pdf
4.Gross domestic product trend
(GDP) is the market value of the goods and services produced by labor and property located in Colombia, in Our company (life solutions) we do our customers an easier life, mostly when they don’t have time to care their kids or clean their homes, our service will become recognize and people will claim for it, our customers will create our value market taking into account our services and labor in the country, also we have an advantage and it’s that everything is by online service and app claim to satisfy our customers’ needs.
The president, Juan Manuel Santos, will seek to conclude peace talks with FARC guerrillas and address other long-standing social ills. Given recent progress, a final settlement now looks likely in 2016. Low oil prices and monetary tightening will constrain GDP growth to 2.8% in 2016 but it will pick up thereafter, helped by government infrastructure projects and private investment growth. There will be further fiscal slippage in 2016 as oil-related income stays subdued.
5.Money market rates
The main mechanism of monetary policy intervention used by the Central Bank to affect the amount of money circulating in the economy, is to change the minimum interest rate it charges banks for loans that makes them, or maximum interest rate you pay for extra money receive them. These operations, also known as OMA (open market operations) are made at very short maturities (1, 7 and 14 days). Loans are given in sessions called "repo auctions" and the remaining resources are received in sessions called "contraction auctions", although the latter usually occur much less frequently. Called intervention rate monetary policy of the Bank of the Republic at the minimum rate of monetary expansion auctions a day. The decisions to amend this rate of intervention usually are effective as of the business day following the meeting of the Board.
By decision of the Board of the Bank - from Monday, February 1, 2016 - the current intervention rate is 6.00%
The TIB ( overnight interbank rate ) refers to an interest rate at which financieros1 intermediaries lend funds to each other for one day (overnight loans). The effective term of the loans is one day but can vary if the loan is made on weekends or holidays there . Loans between entities are not colateralizados2 so the rate reflects the credit risk associated with counterparties involved in the operations . Additionally, the level of the fee reflects the liquidity in the local money market . The TIB is calculated by the Central Bank as the weighted average amount of these interbank loans.
1. banking institutions , commercial finance companies , financial corporations, and others.
2. Do not require collateral.
6.Availability of credit
Fitch Ratings-Bogota-16 December 2015: Fitch Ratings expects Colombian Subnationals to remain stable during 2016, despite the current slowdown of economic activity, according to a new report published today. It recognizes 2016 will face the normal slowdown at the local and regional economies. The newly elected governments, taking office from January 2016, will spend the first half of year preparing and seeking approval of their Local Development Plans.
Also expects not only sluggish collection of local taxes linked to industry, commerce and consumption activities during 2016, but also moderate debt growth. Fitch does not expect major changes in local and regional governments (LRGs) ratings in the near future, but will monitor the evolution of the industrial and construction sectors, as lower-than-expected results could create additional problems for LRGs, compared to previos years, it will be less credit thanks to the price drop on oil. never the less the country keeps growing in a stable manner.
https://www.fitchratings.com/site/fitch-home/pressrelease?id=996882
7.Consumption Patternes
Consumer appliances loses ground in 2015
Retail volume sales in consumer appliances declined in 2015 due to macroeconomic turmoil in Colombia. The US dollar was no longer cheap, which meant unit prices of imported goods increased, and rampant local currency devaluation added to the upward pressure on prices. Inventories purchased at lower currency exchange rates and efforts by companies to avoid passing on all cost increases to consumers circumvented further volume sales drops. Currency devaluation and an economy pressurised by plunging international oil prices caused consumer sentiment to deteriorate to levels of pessimism not seen in years. Also, inflation is expected to climb in 2015 and reduce purchasing power. The growth in disposable incomes seen over the review period will not be enough to benefit consumer appliances and many other categories.
Consumer appliances to recover after the 2015 sales dip
While local currency devaluation brings advantages to some players and disadvantages to others in a free trade economy such as that in Colombian, in overall terms, consumer appliances should recover after the sales deceleration in 2015. Low prices as a result of a weak US dollar are unlikely to return over the forecast period. However, after price adjustments hit hard in 2015, they will ultimately be accepted and absorbed. Manufacturers will continue to strive to avoid passing on significant cost increases to consumers. Growth in retail volume sales will depend on variables such as penetration rates, innovation and competition, making targeted and focused strategies more important than ever. On the other hand, exporters will be able to take advantage of the currency exchange situation.
Home care suffers amidst economic downturn
Over the review period, home care was resilient in the face of economic turmoil and adverse macroeconomic conditions. These negative factors included a decelerating economy, plunging international oil prices (Colombia’s economy is deeply dependent on this and other commodities) and a severe currency devaluation of the Colombian peso. All of these resulted in stagnant growth in volume terms in 2015, something not seen previously in years. The currency devaluation made imports much more expensive in a very short period of time as well as raw materials in the case of domestic manufacturers.
By the increase of the dollar at the end of the year 2015 the consumption pattern went downwards, because the Colombian Peso devaluated which had an impact on importing goods and services, which makes the daily life more expensive taking into account that almost 50% of our food is imported.
http://www.euromonitor.com/consumer-appliances-in-colombia/report
9.Worker productivity levels
Productivity measures total output over work hours, but hours are not the only input into producing the measured goods and services. Capital (such as new production equipment), improvements in technology, costs of materials, and selling price of items produced all impact the output that can be produced per work hour.
http://study.com/academy/lesson/worker-productivity-definition-statistics-quiz.html
10.Value of the dollar in world markets
11. Federal Government Budget deficits:
Its the difference between what the government pays (taxes and other fees) and the payments made by government (purchases and transfer payments).
A budget deficit occurs when an government spends more money than it takes in.
“Colombia recorded a Government Budget deficit equal to 2.40 percent of the country's Gross Domestic Product in 2014. Government Budget in Colombia averaged -3.63 percent of GDP from 2001 until 2014, reaching an all time high of 0.23 percent of GDP in 2005 and a record low of -8.47 percent of GDP in 2004. Government Budget in Colombia is reported by the Ministry of Finance and Public Credit Republic of Colombia”(http://www.tradingeconomics.com/colombia/government-budget).
The importance of the federal government budget its because it affects all of the organizations, for example if there is a high federal deficit many companies will be disturbed, but if the federal deficit is decreasing public organizations will generate more jobs.
http://www.huffingtonpost.com/kathleen-weldon/budget-deficit-polls_b_6563428.html
http://www.sparknotes.com/economics/macro/policydebates/section3/page/2
12. Income difference by region and consumer groups
:
its the market focused by its geographic
location, consume and incomes. To the extent geographically it identifies sectors with different
socioeconomic characteristics can also: guide the planning of public investment; carry out social
programs such as infrastructure expansion and improvement of public services and roads, health
and sanitation, education and entertainment services in the areas most in need; charging different
property tax rates by stratum and guide land use planning.
This help our company to be more specific when we choose our target customers, why is that?, is
because we need to know if our customers can pay our services, we are looking to people from
status 4 to status 6 that are people who can pay this kind of services, we must look at this by
knowing our customers incomes and be able to obtain our services, and also we can know if they
can pay.
http://www.dane.gov.co/index.php/esp/enlaces-destacados/estratificacion-socioeconomica
13. Price fluctuations
The fact of prices going up and down, the way it increase or decrease in the closing price of a security compared to the previous day's closing price. Its all over time.
During the last years it has been increasing constantly but not significative , 1.73% the last semester.
In Colombia there have been many fluctuacions, the petroleon and dollar are the most significant.
if dollar ar increases petroleum decreases and in the other way. Oil also nbut not much.
http://financial-dictionary.thefreedictionary.com/Price+Fluctuation
http://www.businessdictionary.com/definition/fluctuation.html
14. Interest rates
The Board of the Central Bank decided to increase the intervention interest rate by 50 basis points and stood at 5.25 percent. The explanation of the decision was transmitted in the following statement: - Annual consumer inflation in September stood at 5.35%, and the average of the four measures of core inflation at 4.89%. Measures of inflation expectations of analysts to one to two years increased and stood at 4.1% and 3.5% respectively, and those arising from government debt papers 2, 3 and 5 years above 4%. .
The acceleration of inflation so far this year is mainly explained by the transfer of the nominal consumer prices and the increase in costs of imported raw materials depreciation, as well as the less dynamic in the food supply.
The transfer of part of the devaluation of the peso in consumer prices and a strong El Niño phenomenon slow the convergence of inflation to the target, both because of its direct impact on prices and inflation expectations, as possible activation of indexing mechanisms.
By 2015, the crew raised its forecast likely economic growth of 2.8% to 3.0%, contained in a range between 2.4% and 3.4%. New records of economic activity for the third quarter suggest that the projected increased dynamism.
On the demand side, retail sales indicate that household spending would have been more dynamic, despite the decline in the confidence index. Investment expectations show that the construction and civil works continue with a good dynamic. On the supply side, indicators of industry, commerce and construction have been better than expected.
USA .
Simple Interest = P (principal) x I (annual interest rate) x N (years)
Borrowing $1,000 at a 6% annual interest rate for 8 months means that you would owe $40 in interest (1000 x 6% x 8/12).
Using the compound interest formula:
Compound Interest = P (principal) x [ ( 1 + I(interest rate) N (months) ) - 1 ]
INTEREST RATE: = 6.0%
LAST = 5.75%
Every year it changes , the central bank is the one in charge to increase or not the interest rate , is base don the information given during the year its pases and it decided also based on the inlfation tha country has during the year ended.
http://www.investopedia.com/terms/i/interestrate.asp
8.Unemployment trends
For the past decades, we have seen how the world works when an economic crisis strikes. Whenever there is an economic crisis, unemployment tends to rise since companies start to have problems paying their employees. some other companies just lay off their personel with the objective of saving money to resist the crisis. As we have mentioned before, we expect to have a difficult time in the economic ambit, since last year was a practically a warning to what might happen the current year. We want to try and take a chance at this premonition and try to guide the company throught the possible crisis by taking advantage of the people that might loose their job. We would be able to choose from a wider list of possible employees. The advantage of this for us is that we can have a wider chance of finding the people we are looking for that have characteristics such as respectful, honest, and hard worker, while being dignified by an honest and nice work.
Colombia - the unemployment rate stood at 9.8% in December December’s urban unemployment rate stood at 9.8%, higher than last month’s reading (seasonally adjusted) and 0.5 percentage points higher than last year’s figure. The increase in the unemployment rate came as a surprise, since we were expecting a greater momentum in job creation (employment decreased 0.5% in December YoY).
Thearea of social And community services which includes government continues to contribute the most in job-creation in December.
Finally the weak job creation figures are in line with the expected deceleration in economic activity.
Furthermore, Colombia infrastructure development plan is getting bigger by the day since 2016 is the year were new mayors, with important developing plans for the country, started to govern.
http://www.fxstreet.com/analysis/latam-daily-flash/2016/02/01/
The value of the U.S. dollar is measured in three ways: exchange rates, Treasury notes and foreign
exchange reserves (the amount of dollars held by foreign countries). The most common method is with exchange rates. You should be familiar with all three to understand where the dollar is headed
next.The dollar is a haven during any global crisis. That means investors purchase U.S. Treasuries to avoid risk as the world recovers unevenly from the 2008 financial crisis and recession.
The European Union still struggles to boost economic growth through Quantitative Easing.
Before that, investors worried about the Greece debt crisis. That weakens demand for the euro, the world's second choice for a global currency. China's economic reform led to slower economic growth in 2015, pushing investors back into
the dollar.
Dollar Price. $ 3.387.69
http://useconomy.about.com/od/tradepolicy/p/Dollar_Value.htm
15.Inflation rates (6.77)
The percentage increase in the price of goods and services, usually increases annually or monthly, It effectively measures the change in the prices of a basket of goods and services in a year .
Inflation Rate in Colombia is expected to be 6.81 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Inflation Rate in Colombia to stand at 5.17 in 12 months time. In the long term, the Colombia Inflation Rate is projected to trend around 4.10 percent in 2020, according to our econometric models. The inflation rate plays an important role in determining the health of an economy.Countries with extremely high inflation rates are said to havehyperinflation and when this occurs the economy is often near collapse.
In colombia it is continually changing, mensually measured and stablished in short words in an economic process caused by the imbalance between production and demand ; products and services , and a loss of value of money to purchase food or power to use them .
During the last year like its shown in the graphic Colombia has been sufrering a lot of changes ups and downs, starting the year with an inflation rate of 3.82% and continually increasing til Jun-Jul-Ago while decrease and stable and gets tyo october and increases again . In december it reachs the 6.77% and thats the rate to january 2016.
http://es.tradingeconomics.com/colombia/inflation-cpi
http://www.tradingeconomics.com/colombia/inflation-cpi/forecast
http://inflationdata.com/Inflation/Inflation_Rate/CurrentInflation.asp
16. Tax rates.
What Is a Tax Rate?
A tax rate is the percentage at which taxes are paid on a dollar of income
a range of income amounts that are taxed at a particular rate. Each filing status has its own tax brackets, but the tax rates are the same for all filing statuses. Most of us pay income taxes across several tax brackets, which is what makes our tax system "progressive".
When someone asks what tax bracket you fall into, they generally want to know your "marginal tax rate". This is the tax bracket that your last dollar of income falls into, and therefore the highest tax rate you pay , this is a tax bracket.
Types of tax:
Corporate Tax Rate= 33%
The tax rate on personal income= n/a
Consumption tax rate
Social Security Rate
Social security tax for companies
Social Security Rate For Employees
17. Fiscal policies:
That government can influence macroeconomic productivity levels by increasing
or decreasing tax levels and public spending. According ads still not well explained by the
Government in 2015 will reach to meet the famous fiscal rule while leaving "hairs on the fence".
Indeed, the structural deficit was recorded in 2014 (and is that taken into consideration for the
fiscal rule) was 2.4% of GDP. In other words, we are within the permitted limits of the fiscal rule.
By 2015 the government estimated that the fiscal gap that opens the drop of oil will be $ 9 billion,
of which half are assumed as nonstructural (it means, he financed with more debt), and the other
half is allocated to deficit structural projected for this year. So, the structural deficit for 2015
would be 2.3% of GDP. So, apparently it would meet the fiscal rule. On which it is said that in no
As a legal company we have to follow the legal fiscal policies, where the government claims that
we pay taxes, also it depends about our incomes, if we produce more than what we suppose to
pay if we earn more than 1’800.000 pesos we need to declare income and pay taxes. Taking into
account these our company could pay taxes forward; it also helps us to be in legal statement and
with not juridical problems.
http://www.larepublica.co/%C2%BFpara-donde-va-la-pol%C3%ADtica-fiscal-en-2015_213756
18.Demand Shifts for different categories of goods and services.
Considering recent increases in Colombia’s GDP per capita at 8.8% per annum there is great potential for economic convergence, and in fact, the estimates of the convergence theory point to a possible Colombia’s per capita income convergence in roughly 42 years, i.e., by the year 2051. However, this forecast is highly optimistic at this time considering Colombia’s political impasse.
As difficult as it may be, the demand is still strong thanks to the fact that there is both demand for work and demand for services to ease life , it has mostly been a country were the minimum wage is low compared to developing countries, making the service industry accesible to all sort of people.
http://colombiareports.com/colombias-economic-problems-and-prospects/
19.Monetary Policies
What are the current inflation targets?
The inflation target range for 2007 was set at between 3.5% and 4.5%.
The inflation target range for 2008 was set at between 3.5% and 4.5%.
The inflation target range for 2009 was set at between 4.5% and 5.5%
The inflation target range for 2010 is the long-term target: between 2.0% and 4.0%, with 3.0% as the specific target for legal purposes
The inflation target range for 2011 is the long-term target: between 2.0% and 4.0%, with 3.0% as the specific target for legal purposes
The inflation target range for 2012 is the long-term target: between 2.0% and 4.0%, with 3.0% as the specific target for legal purposes
The Banco de la República implements monetary policy by changing interest rates, which either provide or withdraw liquidity from the economy. Thus, these intervention rates are the Central Bank’s monetary policy tool and, through them, the Bank affects the market’s interest rates.
The Pontificia Universidad Javeriana (Columbia) and the Central Bank of Colombia cooperated in an effort to recast the bank’s MTM (Mechanism of Transmission Model) into a system dynamics model. This joint effort represents an application of system dynamics to macroeconomics. There are three options for a central bank to achieve its monetary goals: controlling the base money growth, inflation targeting and implementing a fixed exchange rate regime. The monetary policy of the Central Bank of Colombia (Banco de la República) is directed at keeping inflation to a minimum.
This strategy consists, basically,of controlling the interest rate in such a way, that the inflation forecast be aligned with the inflation target.
TheCentral Bank of Colombia concluded that the system dynamics model is similar the MTM model in important respects. The bank continues to support efforts to build a comprehensive system dynamics model supporting its monetary policies. This factor could damage our business because if the inflation rates rise up, the people will have to expend more money but receive less service, and that will mean that the people will have less disposable money for purchasing our service.
http://cases.systemdynamics.org/monetary-policy-in-colombia/
http://www.banrep.gov.co/en/node/22748
20. Colombia Stock Market trend (IGBC) 2010-2016
Colombia IGBC Index decreased 15.5 points or 1.31% to 1165.22 on Tuesday February 2 from 1180.72 in the previous trading session. Looking back, Colombia IGBC Index lost 243 points or 17.25 percent during the last 12 months from 1,408.20 points in February of 2015. Historically, the Colombia Stock Market (IGBC) reached an all time high of 1940.38 in November of 2010 and a record low of 1051.25 in December of 2015.
This can influence the business negatively because the market stock has been in the downwards for the last couple of years making the economy of the country more unstable.
http://www.tradingeconomics.com/colombia/stock-market
21. Export of labor and capital from USA .
Colombia is placed in the middle of the American continent, between five different time zones, and close in distance to several North, Central and South American nations. It is reputed as one of the richest countries in biodiversity, an economy in constant growth, and leader among the emerging countries. It is also recognized for its good bussiness practices, reliability, and social and environmental responsibility policies.
Capital: Bogota D.C.
Population : 46.4 million (the second largest Spanish-speaking population after Mexico)
Total area : 1.141.748 Km2
Territorial waters: 928.660 Km2
Administrative Structure : 32 departments and a Capital District
Form of Government: Presidential Republic
President Juan Manuel Santos (2010 - 2014)
Official Language : Spanish
Religion: The country is predominantly Catholic, but the Political Constitution of Colombia guarantees freedom of faith.
Currency: Colombian Peso (COP).
Time Zone: GMT -5 hours.
GDP: 5,9% 2011)
CPI: 0,73% (January 2012)
Unemployment rate: 11,9% (febrero 2012)
Colombia is ideally situated at a nexus between countries in the north and south of the continent, with access to both the Atlantic and Pacific Oceans.
Colombia has a diverse, exportable offer that covers post-industrial products, manufacturing, clothing and services.
Colombian companies are certified internationally under, BASK, C-TPAT, HACCP, Global GAP, ISO 9000, ISO 14000, OKO-CCOF and Fair Trade.
Colombia has more than 3.600 ocean-freight frequencies and almost 1.000 air connections, Colombia offers excellent export logistics.
Colombia has the most productive labor force and highest-skilled manual labor availability in South America, according to PricewaterhouseCooper's 2009 report.
International buyers have rated the Colombian product range as having “outstanding quality,” especially in the clothing sector.
According to Doing Business, Colombia is the third most "friendly" country for doing business and the top reformer in Latin America.
It is the fifth country in the world and first in the region that most protects its investors.
Colombia is the C in Civets as it has a large population, a dynamic and diverse economy, political stability and a bright future.
Colombia is the 28th largest economy in the world and 4th in Latin America, the 24th largest population in the world and 2nd largest Spanish-speaking population in the world.
The GDP per capita has doubled in the last six years, from USD$ 2,482 in 2004 to USD$ 6,136 in 2010.
The country currently has the highest level of international reserves USD$ 28,400 million and the lowest in terms of inflation 3.7% in 2011.
Colombia has five free trade agreements (FTA) in place and one signed with the United States. The agenda includes 18 international investment agreements (IIA) and 16 agreements to prevent double taxation (DTA) with 21 countries.
Foreign investors in Colombia have an excellent possibility to access the U.S. market because of the free trade agreement signed with this country.
Colombia, distinguishes ...
According to IMD World Competitiveness 2011, Colombia is the country in the region with the highest availability of skilled labor and credibility of its managers.
It is the country that ranks first in Latin America in knowledge transfer and innovation capacity.
In Latin America Colombia is the country that offers the best support to stimulate innovation and the second to have a legislation that encourages scientific research.
Colombia advances in the development of an effective education system that meets the needs of the economy and ranks among the most competitive in the region.
Colombia is the second country in the region in the government decision effectiveness and justice implementation rankings according to IMD World Competitiveness, 2011.
Colombia is the first in technological cooperation in the region and second in development and applications in technology, communications technology and connectivity.
It is the first Latin American country in supporting the productivity of companies.
Colombia is a leader in energy infrastructure in Latin America and in guaranteeing future energy supply according to IMD World Competitiveness, 2011.
Colombia accelerates the development of green technologies and advances as a leader in Latin America towards sustainable development.
2012 Economic forecast
Economic growth > 4.5% to 5%
Inflation > Less than 3.5%
Fiscal deficit > Less than 3.4%
Exports > +11% 66,000 USD (18,000 USD non-mining goods)
FDI > +10% (14,000 USD exchange balance)
Tourism > +10% (3.35 million foreign travelers)
http://www.procolombia.co/en/FTA-USA-Colombia/colombia-market-opportunities
22.Import / Export Factors:
The main strategies that Colombia wants to achieve by its export factors are to have agreements with other countries, in order to expand its economy, and also to help entrepreneurs to export their high quality products to different parts of the world.
The importations of Colombia have been growing among 6,0% in the CIF value between January and June 2013-2014. The zones with more annualized percentage rate in the total of Colombian importations where: Americas (36,4%) and Asia (28,5%)
The main exportations in Colombia are: fuels, mineral oils and their products. The main country of destination of the Colombian products is leading by the United States with an amount of US$ 7.033 millions.
Although we don´t want export/ import any products with our Project, its important to know this information because we may use any technology that already exists in other country, so we need to know the prices of applying this technology in our country.
23.Coalitions of lesser developed countries ( LDC ) policies:
There are a number of ways of looking at the World Trade Organization. It is an organization for trade opening. It is a forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other.
The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO’s current work comes from the 198694 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
The WTO is currently the host to new negotiations, under the ‘Doha Development Agenda’ launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example,to protect consumers or prevent the spread of disease.
At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.
The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side effects — because this is important for economic development and well-being. That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be ‘transparent’ and predictable.
Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements.
-https://www.wto.org/index.htm
24.Organization of petroleum exporting countries (OPEC)policies :
An accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.
The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).
From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership in January 2009, but this was reactivated from 1st January 2016.
This means that, currently, the Organization has a total of 13 Member Countries.
The OPEC Statute distinguishes between the Founder Members and Full Members - those countries whose applications for membership have been accepted by the Conference.
The Statute stipulates that “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.”
The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.
http://www.opec.org/opec_web/en/index.htm
http://www.procolombia.co/en/FTA-USA-Colombia/colombia-market-opportunities
25.European economic community (EEC) policies:
The politic relations of the European Union and Colombia and the rest of the Latin American countries are established by the Treaty of Lisbon entered on December 1, 2009, the main priorities of this policies are to maintain relations with peace stability and alternative development, justice and human rights and trade and competitiveness.
The EU’s relations with Colombia are built on political dialogue, trade , and development cooperation, and cover a wide range of bilateral, regional and multilateral issues, whilst also helping to address the legacies of its internal armed conflict.
Colombia is the EU’s fourth most important economic partner in the region, with a trade volume of €11.884 billion. The EU is Colombia's second biggest trading partner.
Evironment is part of the stakeholders in a company.
So everything that happens in the environment will afect the company directly or indirectly.
http://eeas.europa.eu/colombia/index_en.htm
http://eeas.europa.eu/delegations/colombia/eu_colombia/political_relations/index_es.htm
26.Foreign countries economic conditions:
Economic conditions are important to give an indicator state of an economy, its also important because it helps a company to analyze the economic conditions of a country and where and how to invest.
The changes of the economic conditions can affect both industrial and consumer products and services, and directly affect suppliers and distributions, but they also help companies to have an idea in how to adapt, enter and mantain in a foreign market.
http://www.economywatch.com/economic-conditions
http://www.un.org/en/development/desa/policy/wesp/wesp_current/WESP2014_mid-year_update.pdf
