The fourth-largest economy in Latin America, Colombia has consistently risen in the rankings of the region in terms of economic performance. The COVID-19 pandemic notwithstanding, millions of Colombians are confident that the economy has achieved fundamental strength over the past decade and will survive the current health crisis.
As the armed conflict between government forces and a handful of rebel groups came to an end, the country witnessed dramatic growth in various industries at the turn of the century. Among them are electronics, construction, mining, aviation, automobile manufacturing and tourism.
Thanks to its central location in South America, as well as its access to the Pacific and Atlantic oceans, Colombia possesses the ideal conditions to become a cost-effective export platform in the region and the rest of the Americas. Also, the domestic market is made up of over 50 million consumers and an expanding middle class.
A confirmation of its rising global status, in May 2018, the country was admitted as the 37th and newest member of the Organisation for Economic Co-operation and Development. Chile is the only other South American member of the Paris-based group.
This year, Colombia also celebrates 112 years of diplomatic relations with Japan, the largest foreign investor in the country. Seeing the benefit of stronger ties, the two counties are working on a comprehensive partnership agreement.
Ambassador of Japan Keiichiro Morishita also underlines the importance of this relationship: “The government of the Republic of Colombia describes Japan as its longest standing partner in Asia. President Ivan Duque of the Republic of Colombia attaches a special importance to Asia as a new market. Colombia’s stable political situation is without a doubt another reason to consider the country as a home for potential Japanese investments.”
On the other hand, Oscar Romero, the executive director of the Colombian-Japanese Chamber of Commerce and Industry pointed out: “The economic partnership agreement is much more than a free trade agreement because it includes topics like cooperation, culture and education. Hopefully, it will be finished soon.”
“If we can complete this triangle of agreements, I am sure we will achieve the objectives that we set as a chamber: To improve Colombia’s trade balance with Japan, increase investment from Japan to and from Colombia to Japan and make the cultures of both our countries more known to each other,” Romero added.
But in the meantime, investors from Japan and Colombia can enjoy the benefits of a tax treaty signed in December 2018. By eliminating the added costs of double taxation, the agreement is meant to foster more foreign investment between the two countries and increase bilateral trade. The results are promising so far.
This year, Japanese companies in Colombia have given a 72 percent approval rating of the domestic market.
“The number of Japanese investors has been increasing compared to two decades ago, when I used to work in Colombia. And if the EPA negotiations are concluded, this will rise sharply as well,” Japan International Cooperation Agency Director General Naoki Kamijo said.
As of this year, more than 100 Japanese enterprises are operating in Colombia.
“When they visit, Japanese investors will find a country with modern information technology that is integrated with artificial intelligence. This will allow them to easily find the workers they need so they can grow their businesses and their economic activities,” Deputy Minister of Labor Carlos Alberto Baena Lopez said.