2008 LEADER OF THE YEAR

ÁLVARO URIBE VÉLEZ
President, Colombia

ACHIEVEMENTS President Álvaro Uribe has achieved a remarkable and major turnaround in Colombia. Since taking power in 2002, the security climate has improved dramatically and investor confidence has soared. In 2007, GDP expanded 7.5%, foreign direct investment topped US$9 billion, exports have risen to more than US$29 billion, and approval of a negotiated U.S. free trade agreement is on the agenda.

BACKGROUND Born in 1952 in Medellin, President Uribe is a lawyer with specialized training at Harvard and Oxford. The former mayor of Medellin, Antioquia governor and two-time senator was elected president for the first time in 2002, reelected in 2006. He is the most popular president in Colombia’s history.

“Democratic security, investor confidence and building social cohesion constitute the basis of what we are fundamentally seeking in Colombia: confidence.”

LEADERSHIP

ACTIONS SPEAK LOUDER THAN WORDS
President Álvaro Uribe has profoundly changed Colombia. After almost a half century of violence, peace is a real possibility. The economy and investment are showing sustained growth. Colombians are optimistic for the first time in generations. Latin Trade speaks with President Uribe to understand the roots of his revolution and what’s left to be done.

When you assumed the presidency for the first time, Colombia was in crisis. Was there an action plan to stabilize the country? Was the plan carried out as contemplated?
We proposed a 100-point democratic manifesto to the country. This has been the guide for our work. Of course, we have made periodic adjustments but without ever departing from the basic idea. Today, we can outline the plan in three areas: democratic security, investor confidence and building social cohesion. They are profoundly related. Democratic security and investor confidence make social cohesion possible. At the same time, social cohesion is the great legitimizer of democratic security and investor confidence. The three elements constitute the basis of what we are fundamentally seeking in Colombia: confidence.

What does Colombia need to keep growing?
It’s very important to maintain fundamental principles and project them over time. For example, with regard to investor confidence, we are a country that completely respects investor rights. Repeating this statement is important at a time when there are some sectors of Latin America that are tempted by state-run capitalism, hostility toward private investment. It’s very important that Colombia continue on the path of improving macroeconomic indicators. We need to continue with administrative reforms.  It’s very important to maintain fiscal incentives like the free-trade zones. To move ahead with “rules of the game” stability agreements, many of which have been signed. To move ahead with free trade agreements. Aside from democratic security and investor confidence, what are the remaining obstacles to rapid growth of the Colombian economy?  Lack of infrastructure and the need to accelerate the integrated educational revolution.

Improving education is A challenge throughout the Americas. How does Colombia plan to achieve this goal?
We have goals and the will to achieve them. We are starting with national coverage of basic education. By 2010, we should have universal coverage. We had 21% or 22% coverage of university education and we should finish the administration [2010] at about 35%. We had a million Colombians a year in vocational training, this year we should finish with almost 6 million. We are providing 16 million hours of vocational training a year, when the country used to give only 5 million. We have integrated secondary education with vocational technology training and these programs with universities so that the learning process is a continual process. We are also moving forward in the telecommunications revolution with virtual training. We want to have 1 million Colombians studying English via the Internet. Today, we have almost 400,000.

How do you plan to improve infrastructure?
Infrastructure is wide open with lots of possibilities: public works contracted by the government, private concessions, mixed concessions, strong support for domestic construction projects, and a strong commitment to international investment in our country. We are now starting to execute large-scale projects. To promote urban competitiveness, we are building nine mass-transportation systems in Colombia. We have made great progress in ports. Colombian ports can operate as free-trade zones. We are making progress in highways that will connect the interior of the country. There’s much more to be done. The big projects, like connecting Bogota to the ports, are just getting underway or are being put up for bid.

Are there going to be more privatizations?
We have reformed 411 state-run entities. We have not dismantled the government. For example, the Colombian government continues to be an investor in the telecommunications company, but the [private] shareholders own 51%. Our idea is not to go from government to no government. It’s not to go from bureaucratic dictatorship to a complete government pullout. The challenge is to go from a state-owned political guild to social efficiency.

Will an additional 10% of Ecopetrol be sold?
Congress authorized up to 20% capitalization. We have only capitalized a little more than 10%, so we have 9% left. When will we do it? The economic authorities will watch for the right moment to do it. Before this government, Ecopetrol invested US$500 million to US$700 million a year. This year, it has the ability to invest more than US$4 billion without affecting the Colombian government’s budget or its level of debt.

What are the next steps to maintain the rhythm of foreign investment and exports at US$9 billion and US$29 billion, respectively?
Direct foreign investment is growing quickly in Colombia and so is the global rate of investment. In the past, we had less and more inconsistent direct foreign investment. It entered when we invited foreign and domestic bidders to invest in a TV channel, mobile telephony, or an oil well. Now it’s starting to be more consistent. In recent years when the beer company [SABmiller] invested, we had more than US$10 billion in direct foreign investment. The next year, it was US$6.5 billion. Last year, it was US$9 billion. This year it will probably surpass US$10 billion. The global investment rate has gone from 12% to 14% [of GDP] to 21%, 25.5% and 27.5% in recent years. This year, despite the economic difficulties, we have maintained the high rate of global investment. What makes the difference is that we have investor confidence.

What happens if the Free Trade Agreement with the United States is approved in the U.S. Congress?
I don’t think that we will increase very much our exports to the United States in the short term, but there will be an increase in investment in Colombia. There are a lot of investors waiting for this agreement before investing in the country. It’s a huge step to stimulate investment in Colombia. We want a high rate of licit investment to become an alternative to illicit crops. The agreement with its impact on investment is a great alternative to illicit crops.

What were the key elements to achieving improved security in Colombia?
We worked with the same army, the same police force as before, the same justice system, the same legal framework. It was the change in political concept from the idea that security is worthless, that it is an extreme-right issue. Security is a democratic value. You have to work for it and inject it into the hearts of Colombians. We still have to keep working so that the country reaches a point where the progress in security becomes irreversible. We have to put into practice in government that old popular saying, “perseverance overcomes what promises cannot attain.”

Instead of talking about your reelection, you talk about your ideas: “Colombia needs to reelect democratic security and investor confidence as paths to social policy.” How is that done?
First, make an effort to achieve good resu lts in the short term. Second, recognize what still needs to be done. Third, provide a patriotic example for all Colombians. And then comes the most important element: Support citizens deeply committed to these ideas.

“Our idea is not to go from government to no government. The challenge is to go from a state-owned political guild to social efficiency.”