Colombia: One of the best friends of Israel

To explain the recent history of Colombia is necessary to go back in time. In 1964, a Marxist- Leninist guerilla movement named FARC group was formed and started to fight in the jungles against the army country. This conflict was very harsh, and in more than 50 years, more than 250 thousand people died, most of them civilians [1].

Moving forward, during the ’80s, Colombia was well known as the world’s producer and distributor of cocaine. Most of it was controlled by Pablo Escobar, who earned around 30 billion USD during his years at the Medellin Cartel. In 1993, Escobar was killed by the Colombian army, and the drug dealers moved to Mexico [2]. However, the guerrilla and paramilitary groups continued to operate. 

During all these decades, there were multiple attempts to reach a peace agreement. One of the most recent began in 2001, but the effort failed after the FARC decision to leave “an empty chair” during the negotiations. [3]

Casa de Nariño, the Official Residence of the President of Colombia
Credit: Juanjo70000 [CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)%5D

Modern Politics of Colombia 

In 2002, Alvaro Uribe was chosen as President by promising to fight against terrorism and drug trafficking. During his presidency, until 2010, he presented a firm policy against FARC that reduced the kidnappings and terrorist actions. And the economy was also improving: in the period 2003-2008, the GDP grew by an average of 5.8%, the FDI almost quadruple from 2.1 billion USD in 2002 to 7.2 billion USD in 2010. However, the government’s fiscal deficit was 4.5% of the GDP, and nearly half of the population was living in poverty. [4]

Uribe left the presidency with a high level of popularity. After his two constitutional periods, his back then, Ministry of Defense, Juan Manuel Santos, was chosen as the successor, and the Colombian people voted him to replace Uribe as their President.

Santos started his presidency by continuing the fighting against the terror but also initiated secret dialogs with groups. The talks with the FARC began in 2011 in Oslo, Norway, and ended in 2016 when both sides declared that they achieved an agreement, signed during September 2016. According to it, the FARC will be able to build a political party, and the fighters of the militia will be pardoned [5].

To be ratified, the agreement required the approval of the people of Colombia. Uribe thought that this agreement was as forgiving the terrorists and lead the No campaign, which won by 50.14% in the referendum held in October 2016. In November, a new agreement was achieved and signed at the Colon Theatre in Bogota. Later that year, Santos received the Nobel Peace Prize [6].

In 2018, Ivan Duque won the presidency, and his mandate expires in 2022. During his Presidency, Duque has to deal with an influx of over 1.3 million Venezuelans, who moved to Colombia and need houses and jobs [7]. 

Israel- Colombia Relationship

Given the left ideology of the FARC and the fact that most of the Colombian cocaine was sent to its borders, the US forged a strong alliance with the Latin American country in the fight for terror. For example, in 2003, Uribe supported the war in Iraq but declined to send the army. [8]

The excellent relationship with the US set the framework for a good friendship with Israel. With a significant military expenditure (3,1% of GDP in 2018[9]), multiple military pieces of equipment were purchased from Israel, including arms, military training, and consulting services.[10].

In 2013, Santos visited Israel as President and signed various accords in science and technology. In 2017, Netanyahu returned this visit, by including Colombia in his first Latin American trip. However, despite the excellent relationship between the leaders, an unpleasant surprise awaited for Israel. On his last day as President, Santos sent a letter to the Palestinian Mission in Colombia, recognizing the State of Palestine. The Israeli embassy wrote a press release considering this decision, a “slap on the face” [11]. 

Netanyahu with President Santos during his visit to Bogota in September 2017, Colombia
Credit: Avi Ohayion, GPO

The new government promised to review the decision. But after a few weeks, Duque’s Administration decided not to revoke it. However, his administration stated that it wouldn’t develop a diplomatic relationship with the Palestinians [12]. 

Without any doubt, the most important agreement signed by both parties is the Free Trade Agreement [13], signed in 2013 after two years of negotiations. After a judicial procedure, the agreement was approved in 2019 by the Supreme Court of the country and will improve the commercial relations between the countries [14]. Now, the negotiation teams are discussing minor details, and the agreement should entry in force in 2020.  Erez Zaicone, Head of the Economic and Trade Mission to Colombia, expressed in 2018 that Israel invests about 300 million USD per year, and with the FTA, it can double that amount to 600 million USD per year[15]

Regarding the bilateral trade, according to the Colombian Government Data, the country exported in 2018, 429 million USD to Israel. The main good exported is Coal, with over 90% of the trade followed by coffee with only 5%. Regarding the Israel export to the Latin American country, almost 60% is machinery followed by chemicals. In the area of tourism, about two thousand Colombians are visiting the Middle East country, and about twelve thousand Israelis are going to the country, mainly for vacation purposes [16]. 

Doing Business in Colombia 

Colombia has experienced remarkable economic growth in the last years, with a GDP growth of 3.6% in 2019, and it is expected to keep similar rates during the next years [17]. It’s GDP per capita; it’s also likely to grow by about 25% in the next five years (from 6325 USD to 8096 USD in 2024) [18]. Colombian inflation remained at 3,8%, with an unemployment rate of 9.8%[19].

The Doing Business report of the World Bank put Colombia as one of the best countries to start a business, with the lowest time (10 days against 28 in the region) and cost (14% of income per capita against 31% in Latin America). Other important areas are getting credit and protecting minority investors, where Colombia receives the best score in the region [20]. 

City of Bogota
Credit: Laslamedas40 / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)

All of these indicators created a prosperous environment for investment in the country. In the last decade (2007-2018),. In 2019 (January-July), these inversions grew 24% compared with the same period in 2018. It is important to highlight that most of it went to energy-related sectors (petrol and Coal) [21].  Israel invested 51 Million USD in the country, being a little part of the total Foreign Direct Investment (0.03%) [22]

Colombia, after a complicated process, became in 2018 a member of the OECD. The country became the third Latin country following Mexico and Chile. Together with those countries (Mexico and Chile), and Peru, the country is part of the Alliance of the Pacific, a regional trade group that has Israel as an observer country. Colombia also has FTA with the US, Korea, EU, Canada, Mercosur, and others, making the country an attractive site for investments. 

Opportunities for Business and Cooperation

As said, the most important agreement between Israel and Colombia is the FTA. Within it, the investment section is considered one of the most important chapters. As a complement to this chapter, in 2015, the countries signed, and R&D cooperation agreement focused on industrial projects [23].  

In the photo: President Shimon Peres and President of Colombia Juan Manuel Santos Calderón sign Free Trade Agreement. with Minister of Economy Naftali Bennett and Minister of Commerce of Colombia Sergio Díaz-Granados in Jerusalem in May 2013 (Photo Credit: Mark Neyman/ GPO)

In 2019, the countries signed a cooperation agreement, this time on agriculture, which will focus on access to water and agriculture (tomato, fishing, melon, and more) [24]. The agreement will start in the Guajira region, an arid section where Israeli technologies can be tested and implemented. Still, both sides expect to expand it to other areas of the county. This agreement is a cooperation between the Colombian Agriculture Ministry and MASHAV. 

MASHAV is Israel’s Agency for International Development Cooperation. Since 1958, the agency has trained hundreds of thousands of people from around the world in areas such as agriculture, sustainable development, entrepreneurship, education, and others. The agency ranked the country as a priority, and many Colombians have visited the country for its courses [25].   

Regarding the innovation sector, there are multiple sectors for cooperation. For example, the Israel Innovation Authority and Ruta N (the Medellin Innovation Authority) started a pilot validation program on the Smart Cities sector. This agreement will allow Israeli companies to partner with Colombian companies and to validate their technologies [26]. The Mayor of Medellin, Daniel Quintero Calle, visited Israel in 2019, in the search for technology and innovation in the security area [27]. 

As known, Colombia has excellent weather for the cultivation of cannabis. Since 2015, the use of it for medicinal use is approved. Multiple companies are working in the field, but they need the R&D knowledge. This fact can be a unique opportunity for Israeli companies, known as world experts in this field.

Another area can be infrastructure and ports technology. In the Doing Business 2020 report, Colombia gets the worst score in trading between borders, taking more than double the hours (112 hours vs. 55 in the region) and with a higher cost (630 USD of border compliance against 515 USD in Latin America). In this regard, the Israeli company Shikun & Binui is already working in the country, building a 150 km road, and there is more place for other companies to join it [28].  

As seen, Colombia and Israel had an excellent bilateral relationship, and the possibilities for the development of it are multiples. For more information about these opportunities, please contact me at urielhiskin27@gmail.com.

References 

One comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s