R E M A R K S B Y

ALVARO URIBEVÉLEZ

L I T T L E R O C K , A R K A N S A S N O V E M B E R 2 2 0 1 1

COLOMBIA AND THE REGION AN STRATEGICAL VIEW

Introduction

I have been asked to talk about the story behind the Colombian success during the last nine years, and to exchange some ideas on how political Will can trigger effective change.

When I was asked to do that, I felt that this should be the opportunity to express that what Colombia has experienced is not only my success as President, nor only the success of my administration.It was and it should be always remembered as the success of a whole nation that recovered CONFIDENCE and decided to mobilize in order to build a better future.

As President I had the privilege of counting with the support of my fellow citizens to put in place the concept of a Comunitary State built in the fertile ground of DEMOCRATIC SECURITY, INVESTOR CONFIDENCE AND SOCIAL COHESION. This is the story I want to share with you today

1. Colombia long history of violence

Colombia’s history has been signed by long periods of violence: In almost 200 years of independent live, our nation has only experienced 47 years of relative peace.

Violence has taken many forms: Regional and political organization struggles in the XIX Century. Partisan violence from 1900-1958 Guerrilla confrontation since 1960 Narco-Terrorism since 1980’s

Violence has affected the lives of many Colombians: My father was killed in a kidnapping attempt. I have suffered in my

own skin the cruelty of terrorism. For that reason I have fought to liberate my nation from the reign of fear.

2. Violence destroyed hope

Between 1982 and 2002 violence kept on deteriorating and became the root of structural problems: lack of investment, unemployment, poverty, brain drain, lack of hope.

In 2002 Colombia's was considered by many multilateral organizations, as a nation in the path of becoming a failed state.

The numbers made evident that we were experiencing a Confidence Deficit: 28.837 homicides 2882 kidnappings 69 homicides per 100.000 habitants 1645 terrorist attacks 350 mayors out of their municipalities 158 municipalities without police Unemployment was close to 16% Poverty close to 57% Per Capita income US$2300 FDI: US$2.1 billion Investment as % of GDP: 16% Guerrillas, Paramilitaries and drug dealers exercised control in many regions

3. Our change agenda

Colombia needed a change. In 2000 I decided to run for President building an agenda by listening to

the people and engaging in permanent dialogue: Democratic Workshops People coalition Independent candidacy Primero Colombia

We built our change agenda with the People: Confidence was our cornerstone A new concept of State…”The Communitary State”:

• No division between left and right• No Neoliberalism nor Socialism• Pure Democratic Center• A participative State• An efficient state not a bureaucratic State

Strong hand and big heart: Mano firme corazón grande Democratic Manifesto: 100 Points Three Pillars:

• Democratic Security• Investment with fraternity• Social Cohesion as the final objective

4. The 3 pillars in Government

Democratic Security

Security for All

Fight all forms of crime

Security without Martial Law

Security with liberties and Human Rights

Victims recognition

Investment with Social

Responsibility

Investor Security (Human, Legal and Political)

Sound Macroeconomics

Incentives

Access to markets

Competitiveness Factors (Infrastructure, Connectivity,

Banking,)

Social Cohesion

Education Revolution

Health with coverage and quality

Access to credit (Banca de oportunidades)

Vocational Training

Conditional Cash Transfers

4. The Three Pillars in Government:Change is possible

Indicator 2002 2010

Homicides 28838 14000

Kidnappings 2882 228

Homicides per 100K Habitants

69 35

Terrorist attacks

1645 250

Municipalitieswithout mayors

presence

350 0

Municipalities without police

158 0

Security Economy

Indicator 2002 2010

Average Economic

Growth

2.1% 4.3%

GDP per Capita 2377 5300

Invest % GDP 16.5% 27%

Exports US$11.000

US$ 39.000

FDI US$2.100

US$ 7.000

Inflation 6.9% 2.5%

Social

Indicator 2002 2010

Unemployment 16.2% 11.6%

Health Coverage 25.1 million

43.1million

Pension affiliates 4.5 million

7.1 million

Poverty 53% 37%

Education coverage (Primary, Hs, University)

97%57%24%

100%79.4%35.5%

Mobile phone users 4.6 million

lines

41 million

lines

The combination of our Policies produced significant results: Lowest violence levels in two decades, highest levels of social coverage in Colombian History and highest levels

of Exports and FDI in more than 5 decades.

5. Change drivers

Change Drivers1. 306 Communitarian Councils

• Changed the way in which the government connects with the people. For the first time Government talks to the people not the armed groups.

• People initially made their claims with anger and after 8 years with hope2. Weekly Security Councils

• Helped us confront the military forces statistics with the community. • Great example of trust building

3. 52 Economic dialogues• Helped discuss economic policy with all the stakeholders

4. Result Driven Administration• We created the SIGOB a system to monitor how Government fulfils its

objectives5. Leading by example

• The President was on top of the agenda and involved 24/76. Direct Democracy (Sate of opinion)

• The Government always open for people scrutiny• T.V Questions for the FTA

7. Determination to find solutions• Less promises but more solutions

8. Communication with the truth• The case of Governor Gaviria and Minister Echeverry

6. Security as the Heart of Change

Recovering Security1. Macro Vision and Detailed Follow up:

• Daily commitment to monitor security in every region.• How citizens had the President Mobile Phone Number

2. Early Victories :• Road caravans• Massive kidnappings are over

3. Strategic Force Integration• All Forces working together.• Share success

4. National Informant Network• Citizens became active in denouncing criminals• Reward Mondays

5. Commander in Chief assumes responsibility• The Granda Story• Operation Fenix: Fire the Air Force Commander• Operation Jaque: The pressure for a humanitarian exchange and the final

outcome6. Smart Weapons:

• The importance of strategic warfare7. Extradition:

• The decision to extradite the Paramilitary Kingpins

7. Facing crisis: perseverance to reach change

Moments of truth:

1. Nogal Bomb: Bogota cries but never surrenders

2. Killing of 11 regional senators: Facing their families when rejecting humanitarian exchanges.

3. The rescue of Fernando Araujo

4. Meeting Chavez after the Bombardment in Ecuador: a debate in live T.V

5. The rescue of National University President

6. The story of Emanuel

7. The military agreement with the U.S

8. Historical changes took place

Leadership, governance based on citizen support and political Will, helped built significant historical changes in strategic sectors: Reform the oil and gas sector:

1. Colombia is close to produce 1 million barrels per day from 250.000 in 2002. 2. Ecopetrol Reform 3. Created the National Hydrocarbon Agency

Reform the Telecom Sector:1. Restructure the Colombian Telecommunications Agency

Reform the Colombian Social Security Agency More than 2000 criminals were extradited Paramilitary structures were dismantled FARC suffered its biggest historical defeats Colombia experienced its largest historical FDI flows Biggest historical reduction in illicit crops More than 10 FTA’s signed and negotiated Largest historical health and education coverage Largest historical credit expansion Largest historical tourism flows to the country

9.Final thoughts

Colombia between 2002 and 2010 passed from a state in crisis to a state in Progress.

However some challenges remain

Security

Maintain Macro-Vision and Micro-Management

Continue dismantling all terrorist organizations

Continue dismantling drug cartels apparatus.

Strengthen Citizen Security agendas with local

authorities

Economic

Face new trends of currency appreciation

Maintain and increase FDI flows (Security, incentives

and stability rules)

Fiscal Policy to face new countercyclical challenges

Increase tax collections

Expand new trade markets through FTA’s

Social Cohesion

Fight labor informality and create quality jobs

Insure education and health quality

Expand vocational training coverage

Create Entrepreneurial Family Transfers program

Political

Judicial reform.

Strengthen Democratic Center

Improve local institutional capacity

New law implementation (Victims and land)

Prevent the emergence of populist movements

The Regional Picture

1. Opportunities, challenges and risks

Commentators and analysts continuously talk about Chinas transformation and praise its effort for becoming the World second largest economy and by being able to allow 400 million people come out from the poverty trap.

However in our region a silent process of change has also occurred and today Latin America is an active contributor to the Emerging Nations Century:

The regional silent evolution

1. Opportunities, challenges and risks

Between 1980 and 2010 we have experienced an outstanding improvement of our social indicators in what can be called a social transformation:

Life expectancy has increased from 65 to 75 years.

Child mortality has been reduced by 50 per cent.

Literacy rates are above 94%.

Mobile phone penetration has increased by 78 per cent.

Internet access has increased by 33%

Healthcare coverage has increased by 50 percent.

And water and sanitation coverage has reached on average 80 per cent in the region.

Latin America is also a land of opportunities

1. Opportunities, challenges and risks

Latin America is a region with a vast number of natural resources that will help the World attend great part of the demand patterns.

We count with:

10 percent of the World oil reserves.

6 percent of the World Gas reserves

Almost 50 percent of the World cooper reserves.

50 per cent of the World silver reserves.

13% of the World iron reserves

26% of the World fertile land.

24% of the World beef supply.

Almost 50% of the World potable water supply.

Approximately 20 per cent of the World Biodiversity is concentrated in the Amazon ring.

1. Opportunities, challenges and risks

The SECRET BEHIND Latin American Success

This change process is a consequence of the principles that a group of countries have adopted as their policy cornerstone. Brazil, Mexico, Colombia, Chile, Peru and Uruguay represent 70 per cent of the region’s population and 75% of the regional GDP.

This group of countries have common characteristics that explain their outstanding performance:

1. The strengthening of Liberal Democracy

2. The adoption of an institutional Framework in favor of foreign and national investment.

3. The construction of a sound and sustainable social safety net.

4. The expansion of export markets and the commercial integration with the World (FTA’s)

5. A public administration driven by results.

6. A sound Macroeconomic Administration driven by fiscal and monetary prudence.

7. Better regulatory environment

8. Construction of strategic infrastructure.

9. The consolidation of an innovation agenda leaded by an improvement in education.

10. A well capitalized financial sector and the constant expansion of financial services.

Today countries like Panama, Dominican Republic, Costa Rica, Salvador, Guatemala, Honduras, Belize, Paraguay, as well as most of the Caribbean States, are following that line of behavior

Building Modern

Democracies

(5 parameters)

Security

Freedoms and Private Initiative

Independent Institutions

Social Cohesion

People Participation

A dynamic Economic

transformation

Investment Target Policies

Maintaining Fiscal and Monetary transformation

Integrate commodity and knowledge based

economies.

Expand export markets

Create an Entrepreneurship culture

(Innovation agenda)

Closing Social Gaps

Improve education (quality, coverage,

vocational)

Insure Universal Healthcare

Formal Job creation

Access to Finance

Climate Change, Environment and Energy

Sustainability

Expand renewable sources

Install an energy efficiency conscience

Improve waste management

Protect the Amazon Ring

Reduce Co2 Emissions

1. Opportunities, challenges and risks

Challenges

Economic Risks

More Sovereign Debt restructuring in Europe

Higher inflation in Emerging Markets and

exploding bubbles

Real State Bubbles in China

Rapid Expansion of commodity Prices

Currency volatility

Geopolitical Risks

Terrorism

Illicit Trade (Drugs, arms, counterfeiting, organs,

persons)

Organized Crime (Central America, Mexico,

Colombia, Brazil, etc)

Lagging Democracies and fragile States (Venezuela,

Haiti,Bolivia, Cuba)

Nuclear weapons

Environmental Risks

Earthquakes and Tsunamis

Flooding

Deforestation and Biodiversity Loss

Climate Change

Social Risks

Demographic Challenges

Food Security

Massive Migration

Infectious Diseases

Economic Inequality

1. Opportunities, challenges and risks

Risks

PeruHumala Challenges

Maintain Investment Confidence

Improve social expenditure

targeting

Improve Labor markets

• Combat informality

• Improve productivity

Continue with International insertion

• Implement the FTA with USA

• Pacific Agenda with Colombia, Chile and Mexico.

Challenges

Fiscal and Monetary Credibility

Institutional quality

Capacity to generate

confidence

Solve Public-Private

Conflicts

Trigger FDI

Argentina

Security

Human Insecurity

Legal Insecurity

Political insecurity

Individual Liberties

Property rights at risk

Limit freedom of expression

Limit freedom of press

Independent institutions

Courts controlled by the Executive

Branch.

Independent institutions are

controlled by the Executive father

One Party controls the Parliament

Citizen participation

Limited

Controlled

Instruments vital for political

pressure.

Social Cohesion

Class polarization

Fiscal policy is unsustainable

Venezuela

ChallengesRegional integration

Urban security

Prevent economic

overheating

Drug consumption

Cost of money

Infrastructure

Foreign Policy

Brasil

Reform the Police Structure

Citizen participation in the fight against

organized crime

Strengthen intelligence

Border affairs

• Drug Consumption• Assault Weapons

The security challenge

Mexico

ChileTwo situations

Characteristics

Economic Stability

Political Stability

Investor Confidence

Innovation and entrepreneurship

agenda.Quality of live and opportunities

Youth distrust in Political Parties and in

Government.

Aggressive protests

Dependant on the China effect

EcuadorThe political condition

Economic

4.5% Fiscal deficit

Oil price has been the driving force.

Investors distrust

4.5% inflation

Political

The President has concentrated more powers

Conflict with congress and with independent media will deteriorate as the Government pushes more interventionist

reforms

There is not a clear opposition figure

Urban security has been deteriorating

Bolivia: new problems arise

Economic

Populism platform loosing popular support

Fiscal superavit driven by more tax collections

Economic Growth above 4.6% driven by Gas price

Inflation close to 9%

Investors distrust with the exception of foreign governments

corporations

Political

2/3 of Congress controlled by the President Coalition

Hunting of all opposition leaders

Confrontation with Santa Cruz Governor Ruben Costas.

Abstention and no vote drove the supreme court judges

elections

International

Under the influence of Chavez

Improvement in the dialogue with the U.S

International Market Distrust

One final thought: The politics of Confidence

The region requires a DEMOCRATIC CENTER PLATFORM based on three pillars: Democratic Security

Investment with fraternity

Social Cohesion

These were the pillars embraced by Colombia to make a change and are the pillars to face the challenges ahead in many countries.

Without security there is no investment and without investment there are no resources for a strong social agenda.

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