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  • WEDF 
  • Discussion Brief for the Export Strategy-Maker

    Colombian Network for Export Promotion and Development

      1. Introduction 

    The present document briefly describes the structure of the institutional set-up for export promotion and development in Colombia. To that effect it starts by describing the leading public sector institutions. They represent, in fact, the core of the institutional framework within which export promotion and development take place. In this regard, it must be pointed out that after completing the lengthy observation process required to prepare this paper it has been concluded that co-ordination is quite developed within the network as a whole, but one point should not be forgotten: IT HAS TAKEN 35 YEARS TO DEVELOP SUCH NETWORK AND SUCH GOOD CO-ORDINATION. The initial description is followed by a short reference and mention of the export procedures. 

    Subsequently, the paper describes key aspects of export promotion: trade information, other export promotion activities and instruments, export financing and credit insurance, quality management, and transportation and logistics. For each of these subjects, a description of the particular instrument and institution is made, and a clear reference is made to inter-institutional and functional co-ordination. 

    To complement the above there is a detailed reference to sectoral bodies and their functions, and a description of the actions being undertaken with the precise objective of supporting SMEs. This part concludes with a mention of investment promotion activities (which could be considered conducive to export development), but which unfortunately are very weak in Colombia. 

    Special reference is made to three important "success stories" which could be considered as "best practices", and consequently might be adopted, with due adjustment, by other countries. They are the following: 

    • The CARCES (Comités Asesores Regionales de Comercio Exterior), which are fully described in Annex 2 
    • The EXPOPYME programme, to a great extent similar to some practices adopted in Spain and Mexico, which is already in the process of being copied by other Latin American TPOs with assistance from PROEXPORT COLOMBIA 
    • The establishment of "export plans" as a requirement to obtain technical assistance and guidance from PROEXPORT COLOMBIA. This has significantly increased the effectiveness and impact of the institution. 

    In order to facilitate the work of the reader, there is a "Glossary" (Annex 1), with the short form of the names of every institution or instrument, a brief description of the same in the English language, and the official name of the body or tool in Spanish. 

    2. Leading public sector institutions 

    The highest echelons of the Colombian structure for foreign trade promotion are represented by the following bodies: 

    • The CONSEJO SUPERIOR, chaired by the President of the Republic, and including the following Ministers: Foreign Trade, Foreign Affairs, Finance, Economic Development, Agriculture, Mines and Energy, Transport, and Environment. Also the General Manager of the Central Bank and the Head of the Planning Department. Other people (such as the CEO of BANCOLDEX, PROEXPORT COLOMBIA and DIAN) can participate in their meetings on invitation. The CONSEJO SUPERIOR is the organ responsible for designing the country's foreign trade policy and for defining guidelines for all the participating institutions. It is most useful for co-ordination purposes. The CONSEJO SUPERIOR meets approximately once every quarter. 
    • The COMISION MIXTA, which was established with the original purpose of serving as a co-ordination forum between the private sector and the authorities, and as a mechanism for exchange of ideas, points of view and strategies concerning foreign trade in general. It was also intended as a tool to perform follow up activities regarding the execution of policies, plans and programmes concerning foreign trade. The COMISION MIXTA was very important in the past. However, the present Government has diminished its importance, and it has called only three meetings during the last three years (in spite of the legal mandate to call on it every three months). Today it mainly serves to endorse Government decisions on particular foreign trade issues which are presented to the COMISION as a fait accompli. It has been substituted de facto by frequent and very active meetings between the MINISTER and the pertinent representatives of the private sector. This has in fact created a good although informal co-ordination tool, and is working in a very effective and convenient manner. 
    • Notwithstanding the operational deficiencies it might show today, the COMISION, it is worth mentioning, is chaired by the MINISTER, and has a flexible composition. To this effect, the CONSEJO SUPERIOR must define the sectors (no fewer than five) which should be represented at the COMISION MIXTA. The sectoral institutions in those sectors then present lists of three candidates to occupy a seat at the COMISION, and one from each list is selected. 

    • There is a Committee for Customs and Foreign Trade, which formulates recommendations to the CONSEJO SUPERIOR and to the MINISTER. It is composed of the Deputy Ministers of Foreign Trade (Chair), of Finance, of Economic Development, of Agriculture, of Mines, the deputy chief of the Planning Department, the General Director of Foreign Trade at MINCOMEX, the CEO of DIAN and the two Advisers to the CONSEJO SUPERIOR. 
    • An important complement to the above is represented by CARCES (Comités Asesores Regionales de Comercio Exterior, as noted above), an institution created in 1991, which remained dormant until two years ago when its bodies were given a significant boost. The CARCES aim at bridging an important gap existing between the capital of the country, where the government is centralized, and the different regions and states. As such, the individual Committees are very important and significant for planning and co-ordination purposes. For a comprehensive description of this institution see Annex 2. 
    • MINCOMEX, created 10 years ago, which constitutes the top foreign trade authority. Gradually, it has gained importance and support, and is considered by the business community as a very positive tool, in contrast to the situation prevailing before its establishment. Previously, the Ministry of Development's foreign trade responsibilities, were shared with the Ministry of Foreign Affairs. Due to the many obligations and responsibilities of the Ministry of Development, not enough attention was given in the past to foreign trade problems, and there was lack of clarity between the two Ministries regarding negotiations abroad. Today, MINCOMEX is the sole organization responsible for trade negotiations, without any involvement of the Ministry of Foreign Affairs. The concentration of responsibilities at MINCOMEX has been most beneficial to the sector. MINCOMEX has recently absorbed the Foreign Trade Institute (INCOMEX) which was responsible for operational aspects such as authorization of licences, granting of incentives, etc. 

    In order to achieve relatively close co-ordination, the MINISTER or his/her delegate are members of numerous Councils and Committees. However, given the number of these bodies, it becomes increasingly difficult to exercise such co-ordination. 

    Linked to MINCOMEX are the following bodies: 

    • BANCOLDEX, created in 1991 as a mixed economy body, carries out all the activities related to a bank. Its capital originates from funds accumulated by PROEXPO, which was the export promotion institution created in 1967 to be responsible for both the financial and non-financial promotional activities. Aside from its credit-granting responsibilities, BANCOLDEX has been given the responsibility of providing the financial resources required for export promotion. To this effect, a trust fund (FIDUCOLDEX) was created in 1992. 
    • FIDUCOLDEX is an institution established with a majority financial holding by BANCOLDEX, and a minority participation by the main sectoral bodies, and the Chambers of Commerce. It is responsible for administering the resources allocated to cover export promotion activities through PROEXPORT COLOMBIA. FIDUCOLDEX does not carry out any promotional activities, but is exclusively devoted to the provision of funds. As such, its CEO participates in the BoD of PROEXPORT COLOMBIA, without voting rights. 
    • PROEXPORT COLOMBIA is the focal point for export promotion and development. It has an Advisory Board composed of the MINISTER (Chair), the CEO of BANCOLDEX, two representatives of the President of the Republic, and two representatives from the business sector chosen from lists presented by the main sectoral bodies. 
    • The other important body in relation to foreign trade is the DIAN, responsible for all operational matters related with taxes and customs. 
    • The other Ministries, such as Agriculture, Mines, and Development, which should be concerned with foreign trade promotion and are closely connected with export promotion/development, are quite passive in this regard and are not deeply involved. Everything seems to have been left to MINCOMEX. 

    3. Export Procedures 

    In order to make custom procedures easier, DIAN started Project SIGLO XXI some time ago. This programme aims to facilitate and simplify all custom activities through systematization of the various steps, and establishment of a mechanism that will allow all custom operations to be carried out through the Internet. So far, and in order to reduce the red tape affecting export operations, DIAN has established simplified procedures benefiting large exporters – known as "enterprises with a highly developed export activity". The new system will benefit all exporters across the board. On paper, the export procedures are simple: 

    • Registration with MINCOMEX as exporter. However, demonstration of such registration is not required by DIAN when carrying out an export operation. 
    • Presentation of a commercial invoice and an export declaration to be approved by DIAN. If approved, shipment can be made. 
    • If appropriate (see below), special approval by other entities. 
    • Inspection of merchandise on a random basis. 

    In addition to the above, if the export item falls under any of the international preferential schemes which require a certificate of origin, this document is issued by MINCOMEX, in spite strong objections by the Chambers of Commerce. 

    Although the above may seem an easy process, it involves a fairly large number of steps and delays. It is expected that with the new electronic procedures, the number of steps that must be satisfied today in order to process an export shipment will fall from 12 to 3. In addition to simplification of procedures, most customs processing is expected to take place through the Internet, which will also make life easier for Colombia's economic actors. The simplification of procedures and their full incorporation into the Internet will also improve the speed and accuracy of statistical information. At the same time, the system has been conceived to provide improved control practices and increased transparency. It must be pointed out that all operations with customs must be carried out by registered intermediaries. Individual companies cannot carry out these tasks directly. 

    The linking of export procedures to the Internet will represent a very significant advance over the existing system. It must be recognized that DIAN has adopted a very positive attitude with regard to the business sector. It has created a number of "concertation or harmonization groups or forums" to discuss various problems. This practice has led to a frequent and constructive dialogue between the custom authorities and the users of its services. 

    However, there is a notorious lack of co-ordination between DIAN and several other bodies which must approve the export of particular products, mainly: 

      • emeralds and other precious stones 
      • live animals 
      • fish (dead or alive) 
      • vegetable products and plants 
      • glands and organs of human origin 
      • pharmaceutical products 
      • food 

    In the case of these products, when an export is going to take place, the interested party must address the pertinent body, and there is no effort to coordinate the activities of the various institutions. 

    In addition to the promotional activities described elsewhere, a few other instruments aim at stimulating export development and are handled today by MINCOMEX. For many years they were the responsibility of the old INCOMEX. These specific tools operate when the exports actually take place. They are: 

    • CERT: this certificate is intended to be used in the payment of various taxes. It is granted as a percentage of the FOB value of exports, and is applicable to a selective list of products and markets. The percentage varies according to the product and destination. CERT is granted on the basis of the "export declaration" approved by DIAN. There is a rather complicated and lengthy process before the funds are collected. The participating entities, in addition to MINCOMEX, are the Ministry of Finance and the Central Bank, both of which maintain close co-ordination for this purpose. 
    • PLAN VALLEJO: this is a mechanism established many years ago, to allow the temporary import of raw materials, components and equipment, without involving the payment of import duties and other charges. The process is based on an export programme in which clear indications are given of the items to be imported, as well as the goods that will be exported. The mechanics of the process seem to be rather complicated, but companies learn fairly quickly how to take advantage of it. Imports and exports are assessed by unit and not by value; the control is exercised by MINCOMEX, and DIAN only intervenes if the plan is not implemented. This programme has been very beneficial to the development of foreign trade, and has led to significant volumes of import substitution. 
    • TRADING COMPANIES: several years ago there was a special programme to stimulate the creation of trading companies. The incentives provided at that time were very significant and led to a number of abuses until they were abolished. Today there are a few tax incentives to be obtained by channelling the export through a trading company. The incentive is not very important in actual practice. In fact, exports handled by these companies account for only some 10% of total exports. However, it should be noted that the number of trading companies registered in the past two years has increased significantly in relation to previous years. 
    • FREE ZONES: this instrument was widely promoted and used a few years ago. It was expected to be a total success. However, existing zones are not completely full. Many are occupied at less than 30% capacity. Free zones have proven to be a good instrument for sales to the local market, and not so much for export to third countries. Given the facilities granted for imports today, such as the PLAN VALLEJO mentioned above, the operation of a free zone does not offer a really interesting option. 

    For co-ordination purposes, an agreement between MINCOMEX and DIAN covers consultations and changes in the regulations affecting these promotional instruments. 

    4. Trade information 

    As in most other countries, trade information is provided by a wide number of entities. In Colombia, the bulk of this function has concentrated around PROEXPORT COLOMBIA,, which has developed very sophisticated information systems taking advantage, among other things, of the facilities offered by the Internet. In fact, in order to make life easier for exporters, there are two main alternatives: to visit the "Information Centre" at headquarters, or to go through the web site created by the institution. In the four cities outside Bogota where there are local offices of the TSI, exporters can also visit the information centre. 

    A significant effort has been deployed throughout the whole country to make known the existence of the information service and to train users, either directly or through the Internet. Since the dissemination seminars started some time ago, the number of consultations have increased at least threefold. The seminars have been launched in cities outside Bogota through the local Chambers of Commerce, the local offices of PROEXPORT COLOMBIA or MINCOMEX, through the CARCES, and through certain regional organizations. This has developed close cooperation and co-ordination between all these institutions. 

    Each Information Centre has the purpose of serving as a filter and guide to the visitor. Specialists at the Centre listen to requests and guide visitors to their proper destination. In addition to a number of standard services at each Centre, a few officers of MINCOMEX serve the same purpose in respect of the functions implemented by the Ministry. 

    Data fed to the system originates from a number of sources, both local and foreign. Extensive use is made of international data banks, information provided by the offices maintained abroad by PROEXPORT COLOMBIA, and local sources such as DIAN and DANE, responsible in general for compiling foreign trade statistics. Good co-ordination has been achieved between the participating institutions, and an advisory committee meets once every month to discuss relevant matters. Since the committee includes private sector representatives, the information service is constantly adjusted to satisfy the needs of the sector. 

    At the TPO level, trade information activities are carried out under the direction of the Trade Information Division of PROEXPORT COLOMBIA. The main items of information are: 

    • INTELEXPORT, or market intelligence, through which a wide variety of information items are supplied. Access to the service at the Centre or through the Internet is free of charge. The service so far includes data on 52 countries, export guides to 23 foreign markets, and 16 detailed market analyses. The number of these items of information is increasing progressively. 
    • ALERT SERVICE which automatically sends information to exporters regarding potential buyers who have shown interest in their products (through consultation of the site). 
    • POTENTIAL PRODUCTS which provides information about foreign demand for products that could be exported from Colombia. Through a number of selection procedures it is possible to arrive at a conclusion regarding the best markets for a given product. 
    • PROFILES ON REQUEST can also be prepared upon demonstration by an exporter that he/she has a real exportable product. This item might include field research through the offices abroad. 

    Access to all these services is free of charge, but there are plans to start charging for some of them. 

    DIAN has been working for a number of years on the design of another information service, SIEX. The system will offer detailed figures for imports, exports and trade balance since 1998. Figures on exports, however, originate with the DANE. The system provides FOB and CIF values in dollars, as well as net weight. Values are grouped in accordance with international classifications, or in accordance with statistical groupings of the customs book. They can also be examined by country, economic groupings, and other criteria. No time series are presented, and for comparison and analysis purposes the time sequences must be built by the users. In addition to this Internet service, the users can obtain ad-hoc information through the DIAN information Centre. 

    One area which remains rather in a vacuum is related to international prices. No one has undertaken a serious effort to collect and disseminate this information in an intensive or systematic manner. Perhaps the only exception is the CORPORACION COLOMBIA which handles prices of agricultural products (see end of Section 7). 

    5. Other export promotion activities and instruments 

    By definition, export promotion activities are concentrated around PROEXPORT COLOMBIA, which is the official body responsible for their implementation. However, throughout its existence (and that of the previous body PROEXPO, which had similar responsibilities) significant changes have taken place in the manner in which its responsibilities are discharged. Within PROEXPORT COLOMBIA, and in order to rationalize more the use of resources and increase impact, the potential 'universe' has been divided in four "macro-sectors", as follows: 

    • Agro-industry: flowers and plants; agricultural products; agro-industrial products; cattle; poultry; fishing. 
    • Manufacturing: metal engineering products; metallurgy; spare parts; electrical and electronic equipment; furniture and other wood products; chemical and pharmaceutical; plastics; rubber; packaging material; minerals; building material. 
    • Clothing: textiles; garments; leather and its manufactures; shoes. 
    • Services and entertainment: services; software; editing; printing; teaching material; gifts; handicrafts; toys; sport articles. 

    As an important step towards rationalizing the use of the services offered by PROEXPORT COLOMBIA, it has been decreed that in order to receive assistance from the promotional body (except market and transportation information), the interested enterprise must prepare an "Export Plan". Without such a plan it is impossible to receive any assistance, even in the offices that the TSI has established in foreign countries. Since this requirement is strictly applied, to facilitate the observance of this practice, PROEXPORT COLOMBIA provides assistance in the co-ordination and preparation of the export plan. To this end, the procedure starts with the preparation by the manufacturer, of a draft export plan (following a pre-defined pattern). Subsequently, the plan is submitted to scrutiny, as follows: 

    • The enterprise, together with the officer responsible for the corresponding macro-sector, must verify and validate the information on market potential. This is done with the aid of the INTELEXPORT mechanism. 
    • Additionally, the export plan must be verified and approved by the corresponding office abroad, and/or by the regional local office. 
    • The export plan can suggest assistance in the following fields: 
      • participation in trade fairs; 
      • membership at trade missions; 
      • technical assistance for some activities such as improved product design; 
      • assistance for quality certification; 
      • export logistics, and other topics. 
    • Surprisingly, export plans are not used or required as a basis for obtaining export credit from BANCOLDEX, in spite of the close relationship between the two institutions. 
    • Once agreed, the resources are allocated after approval by the President of the support institutions. Up to 50% of acceptable expenditures can be covered. 
    • Each activity is evaluated independently, and at the end of each year an examination is carried out of the results obtained. 
    • Resources are provided for two years. However, the coverage of the second year is conditional on the achievement of targets established for the first year. 
    • If during the initial six months the enterprise has not carried any of the foreseen activities, the plan is automatically cancelled. 

    The promotional programme is carried out in close cooperation with other institutions, such as MINCOMEX, BANCOLDEX, DIAN, Chambers of Commerce, sectoral associations, and private consultants. PROEXPORT COLOMBIA here fulfils an important co-ordinating and catalytic role. The support institution has indicated that it does not want to delegate supervision and co-ordination of export plans to sectoral bodies. It wants to maintain them open to enterprises which might not be members of those sectoral bodies. However, since the export plan applies to a single institution, there is no formal co-ordination mechanism aside from the frequent meetings carried out between the macro-sector staff and the enterprise, with the occasional participation of third parties as necessary. The mechanism of Export Plans has been very well received by the users, since they have realized that the systematization and organization of activities around a plan are extremely beneficial to the enterprise. From 300 enterprises which initially participated in the programme in 1998, the number of companies involved in 2000 went up to 1,300, indicative of the increased interest shown by the business community. 

    Aside from individual export plans, the other system adopted by PROEXPORT COLOMBIA is known as "Special Programmes". In essence this follows the same steps and procedures of the Export Plans, but instead of covering a single enterprise it extends to a varying number of companies with common interests, with a maximum of 15 enterprises. Although this is also an interesting approach, in several instances it has failed due to the jealousy and poor attitudes of some of the companies involved. 

    It should also be mentioned that PROEXPORT COLOMBIA does not participate in the provision of technical support regarding design matters. This issue is covered entirely by private consultants. 

    The services of PROEXPORT COLOMBIA are concentrated in Bogota. However, the body has regional offices in four of the main cities (Barranquilla, Cali, Cúcuta and Medellin), and works with the Chambers of Commerce in other locations. Abroad it maintains 15 offices in key locations, with an emphasis on markets that are considered as priorities: in neighbouring countries (Quito, Lima and Caracas); in other Latin America cities (Santiago de Chile, Sao Paulo, Guatemala City and Mexico City); in North America (Miami, New York and Toronto); in Europe (Madrid, London and Hamburg); and in Asia (Taipei and Tokyo). In addition to the normal duties carried out by these offices, they are responsible for validating the Export Plans presented by exporters in support of their request of promotional services. As mentioned before, if the plan has not been approved by the pertinent office, nothing can be obtained from the other divisions of PROEXPORT COLOMBIA. 

    In order to expand the services of the support institution in other countries, an agreement was signed a number of years ago between MINCOMEX and the Ministry of Foreign Affairs, designed to permit and stimulate cooperation from diplomatic staff posted abroad. However, it cannot be said that the agreement operates effectively: much depends on the attitude of the Ambassador, and in most cases staff are not really committed to export promotion and development. 

    6. Export financing and credit insurance 

    @Since 1991, export financing has been led by BANCOLDEX, which acts both as a first and second level bank. Prior to the creation of the Bank it was PROEXPO who provided the bulk of export financing, acting always as a second floor or discounting bank. It should be noticed that PROEXPORT COLOMBIA does not get involved in any manner in financial subjects. This is a drastic change from the situation prevailing before the creation of BANCOLDEX, and is justified taking into consideration the need to have a specialized body covering financial matters. 

    BANCOLDEX is rather keen on advising exporters on matters related to financing of their export business. This attitude is very positive and encourageable. The Bank provides pre-export financing, discount of export documents, and medium to long term sales coverage. It has increased and enlarged its facilities for direct operations in order to alleviate the high financial costs created by other intermediaries. 

    It works exclusively on the basis of the credit worthiness of the customer, without much concern to the feasibility of the export programme as such. Surprisingly enough, for credit granting there is no formal relationship or co-ordination with PROEXPORT COLOMBIA, but the CEOs of both institutions are members of the corresponding BoD of the other institution. 

    The other entities which actively participate in export financing corresponds to the entire conglomerate of banks, finance corporations and similar entities, which are coordinated through the corresponding sectoral bodies, such as ANIF and ASOBANCARIA. 

    In relation to export credit insurance it is important to point out that the previously existing company, LA UNION, was liquidated in 1993. Simultaneously, SEGUREXPO was created, as a joint effort of BANCOLDEX and the Compañia Española de Seguros de Crédito a la Exportación S.A. (CESCE), each one having a participation in the capital of slightly less than 48%. The remainder is held by a number of small shareholders. SEGUREXPO operates with the technical guidance of CESCE and NSM from Holland. It provides insurance for export credit, and it covers commercial, political and catastrophical risks, being the last two categories the responsibility of BANCOLDEX in representation of the national Government. It also extends its commercial coverage to internal credit 

    The company has had a moderately successful development. It has concentrated mainly on large export companies, and is covering approximately 5% of the non-traditional exports, a percentage fairly low in comparison with other countries where a similar system is in operation. 

    It maintains close co-ordination with PROEXPORT COLOMBIA; both institutions are entering an agreement to establish a data bank on the qualification of foreign customers, with the contribution of the offices that the promotional body maintains abroad. 

    7. Quality Management 

    The most important institution regarding quality is ICONTEC, which was created in 1963 as a non-profit private sector institution. It is the national standardization organ since 1984, by delegation from the Government. In its BOD, in addition to 10 representatives from the business community, it has 5 public sector officers representing the ministries of Foreign Trade, Development, Mines, Agriculture and Health. It has also been approved as a certification body. ICONTEC is a member of ISO and IEC, and of COPANT at the Latin-American level. It also participates at the Pacific Area Standards Congress (PASC). 

    It maintains very close relationship with MINCOMEX and PROEXPORT COLOMBIA. It is a self sufficient organization, which lives from the contributions of close to 1,400 affiliates and the technical services rendered as well as the work connected with certification contracts and audits, for which it charges a fee. 

    With the recent upsurge and greatest importance given to quality management at a world level, the importance and activities of ICONTEC have increased substantially. Naturally, ICONTEC covers the definition of standards for both the local and foreign markets, although not all the certification activities are geared to facilitate foreign market penetration. 

    PROEXPORT COLOMBIA has maintained (as a continuation of practices undertaken by PROEXPO in the past) a vivid preoccupation for quality matters. At the moment it has a "coordinator" responsible for promoting the certification, valid at an international level, of companies within quality assurance systems such as ISO9000, HACCP, BPM and ISO14000. The programme is implemented through the following main phases: 

    • Training: a given number of workshops are carried out periodically to facilitate the implementation by the enterprise of the recommendations which have been formulated regarding quality practices. 
    • Advisory service: advisory visits, carried out following a previously agreed timetable, simultaneously with the workshops, with the purpose of solving problems at the company level. 
    • Certification: it is performed after the previously indicated phases have been completed, and is composed of a pre-audit visit, and subsequently an Audit visit made by the certifying body. The only three entities recognized for this purpose by the Colombian authorities are: ICONTEC, S.G.S. INTERNATIONAL, and BUREAU VERITAS. 

    The certification process is relatively expensive in terms of Colombian purchasing power. Therefore, PROEXPORT COLOMBIA, in addition to disseminating the advantages of certification, and inducing companies to go through the certification process, has agreed to cover 50% of the cost of such process. In addition to using its own resources, it has linked the activity with other entities. On the one hand, it has taken advantage of the new programme called "CYGA-Calidad y Gestion Ambiental", carried out by SENA, together with ICONTEC and with financing provided by the IADB. The same Bank has also established a programme with COLCIENCIAS to assist, among other things, in the certification of large companies. PROEXPORT COLOMBIA works with the above indicated institutions through a co-ordination committee which meets periodically. The activities carried out in two years have resulted in 331 enterprises inserted in the certification programme, of which 86 have already received their certification. 

    CORPORACION CALIDAD is a mixed corporation created 10 years ago through the joint effort of the government and 44 private companies, with the purpose of "coordinating the various economic sectors and to work in sponsoring, promoting, channeling and catalyzing efforts that will lead the various organizations to develop and commit themselves with a concerted movement to favor "quality culture", in such a manner that it will foster the progress and welfare of the population." It has as of now 33 affiliated companies and 101 institutional members. CORPORACION CALIDAD has worked very actively in training and in researching various subjects connected with productivity and competitiveness. It maintains very close contact and co-ordination with other bodies working in the quality subject, as listed in this section. 

    Another institution which has a close relationship with quality matters is CORPORACION COLOMBIA, a mixed economy corporation created through the cooperation of the private sector and the ministry of Agriculture and the Planning Department. It was originally established in order to work in the improvement and supervision of quality matters for horticultural exportable products and fruits, mainly to the Far East. Today it concentrates on the same products, but provides all type of information (including prevailing prices at home and abroad) regarding domestic and foreign markets. It fulfils an important role in the quality verification of some export products upon the request and mandate from foreign buyers, an activity for which it charges a reasonable fee. It works on a very autonomous manner, with very little co-ordination with PROEXPORT COLOMBIA. Some officers have indicated that there is a clear duplication of activities among the two entities, although there is a representative from the promotional body at the BOD of CORPORACION COLOMBIA. The other export related body represented at the BOD is ANALDEX 

    8. Transportation and logistics 

    The Shippers Council created in the early 70’s is gradually disappearing due to the lack of support from its members, although it served a good purpose during many years. It seems that it will be difficult to replace it with a similar body. For many years PROEXPORT COLOMBIA has been serving a comparable purpose vis-à-vis the transportation companies, and at the same time it has established a very good information service on available transportation facilities and logistics. It also provides advisory services to new exporters, guidance on the solution of transportation and logistics problems, and training on various aspects of the subject. 

    Information on shipping facilities (land, sea and air) is provided through a WEB page which is all encompassing, except for freight rates, which will be included in the near future. There is close co-ordination with MINCOMEX and also with transportation companies and sectoral bodies. However, such co-ordination is carried out on an ad-hoc basis and not on a structured way with a pre-scheduled agenda. It has been indicated that through the activities of PROEXPORT COLOMBIA and the pressure exerted by the same, it has been possible to obtain quite a large number of more competitive freight rates in both sea and air transportation. 

    The staff responsible for the service considers that there are many aspects which still require much more development, among them the various aspects related to International Physical Distribution, under the methodology developed by ITC, which in their opinion has been used only to a very minimal extent. 

    9. Support to SMEs 

    As many other developing countries, Colombia is characterized by the abundance of SMEs, whatever parameters may be adopted to measure their existence. Aside from a few sectoral bodies which accept SMEs as members, there is ACOPI, which in theory represents all SMEs from all over the country. Although in the past ACOPI was fairly active in export promotion matters, unfortunately today it has lost its importance. In fact, this body designed the programme EXPOPYME (see below), but was not able to implement it due to scarcity of resources. The project was transferred to PROEXPORT COLOMBIA, which has implemented it quite successfully, as explained below. 

    ACOPI, for unknown reasons, has adopted an attitude of remoteness with regards to export promotion and development. It has concentrated more efforts on the PRODES, which cover from 7 to 15 enterprises in many aspects, not specifically related with export development. As defined by ACOPI, PRODES is a very "pragmatic programme which relies to a minimal extent on studies and research". They have assisted close to 3,000 enterprises in the last 3 years, and the programme is fully supported by the Ministry of Development. 

    EXPOPYME, implemented by a number of institutions using PROEXPORT COLOMBIA as a leader, is a programme geared exclusively to small and medium size enterprises, through which comprehensive assistance and support is provided in order to assist SMEs to penetrate foreign markets or to reinforce the position they have already gained there. Participating institutions are MINCOMEX, BANCOLDEX, ANALDEX, universities, sectoral bodies and CONFECAMARAS. 

    The objective of EXPOPYME is to assist each enterprise in the preparation of an export plan, through whose implementation the enterprise penetrates foreign markets. The plan identifies the needs, strengths and weaknesses of the enterprise and its products, and helps consequently in defining markets, strategies and activities, within a pre-defined time span, and with precise export targets. EXPOPYME aims at promoting development of new products, and the adoption and adaptation of productive processes and management procedures with a marked export inclination. Therefore the significant proportion of the training component. 

    In order to prepare the export plan, a three phases programme is followed: analysis of the export potential of the enterprise (30 days); market intelligence (45 days); and preparation of the export plan (45 days) Simultaneously with these phases, a selected staff member of the SME is given intensive training in a programme called "Change Management" which is offered by 7 pre-selected teaching and training institutions around the country. PROEXPORT COLOMBIA covers 50% of the cost of such training, plus a portion of the salary of the person concerned. 

    Assistance tools offered by the EXPOPYME programme include: 

    • Financial and promotional assistance 
    • Market intelligence 
    • Trade fairs and missions 
    • Marketing assistance 
    • Quality certification 
    • E-business opportunities 
    • Direct market contacts 
    • Assistance in export logistics 
    • Assistance in packaging and labeling 

    So far, the programme has assisted more than 1,000 enterprises during its one and a half year of existence. Of these, close to 50% have concluded the programme. Their exports have increased by almost 40%. As indicated by some of the officers involved in the programme, it will be increasingly difficult to find adequate SMEs to extend the programme in the future, since it has almost saturated the local demand for this programme. However, other people does not agree on these points of view. One alternative that is being considered for the future is to concentrate efforts in the creation of specialized trading companies that will assist those SMEs which have gone through the programme. 

    The programme works very smoothly due to the adequate co-ordination existing among the different participants, and the close supervision and relationships established by PROEXPORT COLOMBIA with the various participating institutions. There is also an "Audit Committee", with the following members: the President of ANALDEX, two of the Principals from the participating Universities, 2 representatives from the private sector, and the President of PROEXPORT COLOMBIA. Although it is fairly difficult to have all the members available for the committee meetings, it has been possible to follow a pre-agreed schedule, meeting regularly every Semester; this has proven to be a most useful instrument. 

    There is a group of more than fifty "enterprise incubators" which have been created in many cities in order to facilitate the creation of new technologically based enterprises. Usually, they are non-profit entities created by one of the leading universities, with the support of the Planning Department and of large industrial groups. The financial support provided by the founding partners has diminished over the years due to various reasons, and gradually it has been replaced by the funds derived from international support bodies, as well as the moneys collected for services rendered. 

    The main purpose of these type of bodies is to facilitate the materialization of manufacturing or service projects, which their owners or partners cannot implement due to the costs incurred in the starting period, before the company is in a position to generate its own funds. Therefore, the incubators cover almost entirely the administrative and similar expenses for a period of two to three years, until the enterprise is self sufficient. They have supported many small enterprises, with an important contribution to employment generation. 

    10. Sectoral bodies 

    There are numerous sectoral bodies in Colombia, many of them highly efficient and respected, with only a few which are not worth these qualifications. It must be pointed out that most of these bodies experience difficulties, of a financial nature, in developing themselves into big and significant associations or chambers. In general, businessmen are reluctant, to some extent, to contribute with large sums of money to the creation and operation of these institutions from which, in many instances, do not seem to obtain any benefit. But many of the existing bodies have survived for quite a number of years and have developed a number of programmes which have proven to be really useful to the associates. 

    As a starting point, it must be pointed out that for several years many efforts have been made to coordinate these associations. To that effect, approximately 20 years ago the "National Sectoral Council" (Consejo Gremial Nacional) was created by the leading bodies, in order to achieve such co-ordination. It operates under the rolling presidency of one of the CEO of the member associations, and meets regularly once a month, or sooner if the circumstances make it advisable. Given the level of such Council and its members, it handles only important matters, and defines policies to be followed by the business sector vis-à-vis the Government. 

    From such a Council, a more recent creation corresponds to the "Inter-sectoral foreign trade committee" (Comité Intergremial de Comercio Exterior – CICEX), composed of representatives, at the technical level, from all the sectoral bodies except ANDI, which is absent for unknown reasons. This Committee has been very effective in the foreign trade field, since there is no other pre-established effective co-ordination mechanisms (aside from the COMISION MIXTA, which does not work in actual practice, as explained in Section 2 above). In addition to the co-ordination activities, this Committee serves an important purpose as adviser to the Government on matters related with international trade negotiations. It also works actively in obtaining information from the Government regarding the status of such negotiations, since there is no specific dissemination mechanism for that purpose. It depends mainly on the positive or negative attitude of the Minister. 

    It is also interesting to note that in spite of these co-ordination and analytical bodies, as well as other mentioned in this document, a certain "lack of trust" has been noticed among some of the heads of sectoral bodies, which explains the fact that in several instances they prefer to work on their own, and even do their own lobbying abroad, since they do not fully rely on third parties (including the Government) for the undertaking of all the actions that they require. 

    The most important sectoral bodies are the following:   

    • ANALDEX is the sectoral body for the exporters. However, its membership is not as wide as desirable, and for that reason it has recently enlarged its institutional purpose to include not only exporters but also importers. In addition to fairly well known activities normally carried out by associations of such type, it has devoted much effort to cooperating with the Government on matters related with competitiveness, and is an active member of the various committees called by MINCOMEX on this regard. It maintains very close contact and co-ordination with the various bodies linked to the Ministry, including PROEXPORT COLOMBIA. 
    • The leading and most important private sector association is ANDI, a very traditional and widespread body devoted to the defense of the interests of manufacturers. It has been involved with foreign trade since its creation, and has a large and well equipped Foreign Trade Vice-Presidency. ANDI has a very active participation in negotiations abroad and in all matters related with the creation of adequate framework for imports and exports. 
    • It has created 16 committees (known as "chambers"), 14 of which cover manufactured products and 2 cover service sectors. Members of these committees must pay a special quota to the committee, in addition to the one paid for their regular membership at ANDI. The committee have a federal character, and concentrate their actions on training, technology transfer, and generating increased added value to the products being manufactured. 
    • One interesting case of those committees is the one covering the metal engineering industry. Due to problems experienced by many companies in that industrial sector (attributable to globalization and contraband practices), most of them started to reduce expenses, which in many instances included canceling their membership at FEDEMETAL, which was up to a year ago the Federation of metal engineering manufacturers. This lead to the final liquidation of the Federation. ANDI decided to create one of those committees to replace the disappeared FEDEMETAL, and today is even stronger and more dynamic. It runs a technological Centre for the metal industry. 
    • ANDI maintains very close relationships with MINCOMEX, PROEXPORT COLOMBIA, DIAN, as well as ANALDEX and the other sectoral bodies. ANDI complains about the poor co-ordination observed among the various Ministries, which apparently has left most of the trade promotion and development responsibilities almost solely in the hands of MINCOMEX.  
    • Aside from the above, there are a number of sectoral bodies, most of them based in Bogotá, but extending their services to the country as a whole. These associations cooperate quite closely with the entities responsible for trade promotion, mainly with PROEXPORT COLOMBIA with whom they link very closely. The most important ones are the following:
      Short name Product covered Full name

      ACICAM 

      Leather and manufactures 

      Asociación Colombiana de Industriales del Cuero y sus Manufacturas 

      ACOLFA 

      Auto spare parts 

      Asociación de Fabricantes de Autopartes 

      ACOPLASTICOS 

      Plastics 

      Asociación Colombiana de Productores de Plásticos 

      ASCOLTEX 

      Textiles 

      Asociación Colombiana de Productores Textiles 

      ASOCAÑA 

      Sugar cane 

      Asociación de Cultivadores de Caña de Azúcar de Colombia 

      ASOCERAMICA 

      Ceramic products 

      Asociación Colombiana de Ceramistas 

      ASOCOLFLORES 

      Fresh cut flowers 

      Asociación Colombiana de Exportadores de Flores 

      ASOTABACO 

      Tobacco 

      Asociación Colombiana de Exportadores de Tabaco 

    • In addition to the above there are 57 CHAMBERS OF COMMERCE, all of them of a private nature. The main role of the chambers is to handle commercial registration for all companies existing in the country, a function which is implemented by delegation from the Government, and which has contributed to the considerable size, financial strength and importance of many chambers, given the significant fees that are collected every year. Most of the main chambers, located in the biggest cities, have indulged for several years in foreign trade matters. A few of them have carried out studies to define which are the clusters that should be fostered in their corresponding region or area of influence. Such definition helps in the implementation of fairly important activities regarding participation in trade information programmes, promotion of selected products, and organization of trade fairs and missions (incoming or outgoing), with a high concentration on the defined clusters. The degree of efficiency and effectiveness of the various programmes varies from chamber to chamber, but it must be recognized that the export promotion bodies maintain, in overall terms, a good relationship with those chambers. 
    • Shortly after the start of the export promotion movement in Colombia (end of the 60’s) and with the support of PROEXPO, the Colombian Confederation of Chambers of Commerce (CONFECAMARAS) was created. This organization has been very effective in coordinating the many Chambers of Commerce, but respecting their operational autonomy and independence. CONFECAMARAS is active in helping the Chambers to provide assistance in fields such as information, promotional events and training. It also has given certain guidelines for the handling of the Technical Secretarial work carried out by the Chambers in respect of the CARCES, and stimulates joint ventures arrangements between two or more Chambers, or with other private sector entities. 
    • CONFECAMARAS has institutionalized an internal foreign trade committee, which meets every quarter with the participation of representatives from every chamber who are dealing with foreign trade subjects. This tool has proven to be very useful for co-ordination purposes, as well as an important tool to disseminate among the various chambers the specific programmes which have been undertaken by a given one, and which could be replicated by others. It has also established a committee with staff of MINCOMEX, which meets once every Semester, and which also effectively serves for co-ordination purposes. 

    • The other important entities along these lines are the bi-national chambers, of which there are about 20. The Bogota Chamber of Commerce acts as support to most of these bi-national chambers, and provides guidance in the programmes they undertake. They have an important role to play in fostering the trade relationships with the corresponding country. 

    11. Investment Promotion 

    Responsibility for investment promotion has been allocated to COINVERTIR, an institution created in 1992 as a joint venture of the government and large corporations (approx. 100), mainly multinational ones. Initially, the body carried out all the typical activities of similar bodies in other countries, but due to scarcity of resources it has significantly diminished its activities. 

    COINVERTIR works mainly under contract with the Planning Department, preparing a number of studies made to order. It has completed 33 sectoral profiles, which are widely disseminated and are inserted in the Web site. It is starting to develop a data base on investment projects, some of them with significant export potential. 

    The body works closely with MINCOMEX and PROEXPORT COLOMBIA, entities which have their CEO at the BOD of COINVERTIR. Today, the day-to-day work is highly concentrated on answering consultations made by potential investors. Since it has resulted difficult to demonstrate the positive achievements of the institution, it has become increasingly difficult to obtain adequate Government support. 

    Another institution which is important in this field is COLCIENCIAS, which has a concern with development and implementation of projects with a technological base. This institution is geared to export development, and maintains a close relationship with PROEXPORT COLOMBIA. It also cooperates very closely with MINCOMEX in all its activities related with competitivity and productivity. It could be said that the leading force behind COLCIENCIAS is "innovation to become competitive". It operates on the basis of resources derived from both the national budget and loans from international financial institutions. The resources are used to assist interested enterprises to cover a certain percentage of the cost of the project. Such compensation works under a scale going from 18% of the cost of the project if it only involves technological advance, to 30% if it is not only innovative but is also geared to export creation. 

    Annex 1 

    GLOSSARY 

    Short name 

    English equivalent 

    Original name 

    ACOPI 

    Association of SMEs 

    Asociación Colombiana Popular de Industriales 

    ANALDEX 

    National Foreign Trade Association 

    Asociación Nacional de Comercio Exterior 

    ANDI 

    Association of Industrialists 

    Asociación Nacional de Industriales 

    ANIF 

    Association of financial institutions 

    Asociación Nacional de Instituciones Financieras 

    ASOBANCARIA 

    Bankers Association 

    Asociación Bancaria de Colombia 

    BANCOLDEX 

    Foreign Trade Bank 

    Banco de Comercio Exterior 

    BOD 

    Board of directors 

    Junta Directiva o equivalente 

    CARCES 

    Regional Advisory Committees for Foreign Trade 

    Comités Asesores Regionales de Comercio Exterior 

    CERT 

    Tax reimbursement certificate 

    Certificado de Reembolso Tributario 

    COINVERTIR 

    Investment promotion institution 

    Corporación Invertir en Colombia 

    COLCIENCIAS 

    Colombian Institute for Science and Technology 

    Instituto Colombiano para el Desarrollo de la Ciencia y la Tecnología 

    COMISION MIXTA 

    Public-Private Coordinating Commission 

    Comisión Mixta de Comercio Exterior 

    CONFECAMARAS 

    Confederation of Chambers of Commerce 

    Confederación Colombiana de Cámaras de Comercio 

    CONSEJO SUPERIOR 

    High Level Foreign Trade Council 

    Consejo Superior de Comercio Exterior 

    CORPORACION CALIDAD 

    Private sector corporation handling quality matters 

    Corporación Calidad 

    CORPORACIÓN COLOMBIA 

    Colombian corporation for international quality 

    Corporación Colombia Internacional 

    DANE 

    National statistical office 

    Departamento Administrativo Nacional de Estadística 

    DIAN 

    Customs and Excise Office 

    Dirección de Impuestos y Aduanas Nacionales 

    EXPOPYME 

    Training and advisory programme for SMEs 

    Programa de asesoría y entrenamiento a PYMEs 

    FIDUCOLDEX 

    Trust body to administer the finances of PROEXPORT COLOMBIA 

    Sociedad Fiduciaria Colombiana de Comercio Exterior 

    IADB 

    Inter-American Development Bank 

    Banco interamericano de Desarrollo 

    ICONTEC 

    Standards and Certification Institute 

    Instituto Colombiano de Normas Técnicas y Certificación 

    INCOMEX 

    The old Foreign Trade Institute 

    El antiguo Instituto de Comercio Exterior 

    INTELEXPORT 

    Trade information system 

    Sistema de Inteligencia de Mercados 

    MINCOMEX 

    Ministry of Foreign Trade 

    Ministerio de Comercio Exterior 

    MINISTER 

    Minister of Foreign Trade 

    Ministro de Comercio Exterior 

    PLAN VALLEJO 

    Maquila mechanism 

    Sistemas especiales de importación-exportación 

    PLANEACION 

    National Planning Department 

    Departamento Nacional de Planeación 

    PRODES 

    Development programme for groups of enterprises 

    Programa de desarrollo para un grupo de empresas 

    PROEXPO 

    The previously existing TPO 

    Fondo de Promoción de Exportaciones 

    PROEXPORT COLOMBIA 

    Focal point for export promotion 

    Fideicomiso de Promoción de Exportaciones 

    SEGUREXPO 

    Export credit insurance company 

    Aseguradora de Crédito y del Comercio Exterior 

    SENA 

    National training service 

    Servicio Nacional de Aprendizaje 

    SIEX 

    Statistical System of the Customs Office 

    Sistema Estadístico de Comercio Exterior de la DIAN 

    SIGLO XXI 

    Updated mechanisms to handle custom procedures 

    Sistema Global de Información y Mejoramiento de la Gestión Aduanera 

    Annex 2 

    CARCES 

    (Comités Asesores Regionales de Comercio Exterior) 

    Purpose 

    The CARCES were created in 1991 in order to integrate the points of view of each region or state, and to serve as a link with the Central government. CARCES aim also at developing higher competitivity through regional activities that point out to foreign markets, and to create a real and positive export conscience. For these purposes, CARCES must design a regional export plan, and supervise its realization over the years. It should also present to the consideration of the Government "competitiveness agreements", through which the government provides support and incentives to participating entities in order to allow them to achieve a higher level of competitiveness. 

    Composition 

    The Executive Committee of the CARCES is composed of the following members: 

    4 prominent local businessmen 

    1 representative from the Chamber of Commerce 

    2 representatives from regional sectoral bodies 

    1 representative from the academic/university sector 

    1 representative from the local vocational training office (SENA) 

    1 representative from the local DIAN office 

    1 representative from the State government 

    In cities where there are offices of PROEXPORT COLOMBIA and/or BANCOLDEX, they are entitled to send their representatives. 

    Executive Secretariat 

    In addition to a President elected by the Executive Committee, there is an Executive Secretariat which is organized within the local Chamber of Commerce. The Executive Secretary is responsible for the day to day operations of CARCE and to collect the information that allows the follow up of activities by the Executive Committee. 

    Objectives 

    The objectives of the CARCES have been summarized in the following five ideas: 

    • To increase the export supply of goods and services in accordance with the world demand. 
    • To consolidate and increase foreign investment aiming at increasing exports. 
    • To increase the competitiveness of the export activities, at large. 
    • To provide increased importance to regional/state activities in foreign trade. 
    • To develop an export culture and conscience. 

    Activities 

    The CARCES have two main responsibilities: to increase competitiveness at the regional level, and to develop a real export culture. To these effects, they must undertake the following actions: 

    • Design a Regional Strategical Export Plan which must follow an approach in accordance with the national Strategical Export Plan. The Strategical Plan provides a medium to long term scope to the Export Development Programme, and contributes to an improved usage of resources. Both MINCOMEX and PROEXPORT COLOMBIA will provide the necessary methodology and/or assistance for the preparation of such regional plans. 
    • Implementation of a Competitiveness Action Plan through the creation of regional committees to increase export competitiveness, and by gradually leading the region to the participation in the "Colombia Competes Network". All this work is related with the efforts being carried out, at different levels of the public and private sector structure, to analyze and raise the level of competitiveness in accordance with the 8 criteria given at the World Economic Forum at Davos: internationalization; infrastructure; human capital; labor; science and technology; government; finance; and management. To improve each of these factors, the Central Government has created eight networks integrated by different entities in both the public and private sectors to improve the performance. While at the national level MINCOMEX acts as the central coordinating point, at the regional level it is the CARCE which fulfills such role. 
    • Design and implementation of projects, an activity to be carried out using as a basis the list of potential projects which has been studied, analyzed and agreed by PROEXPORT COLOMBIA. From this list, each CARCE will select those projects that better fit the vocation and resources of the corresponding region and will develop the successive actions until their materialization. This item incorporates not only the supply of ample and comprehensive information, but also the implementation of several training activities, at different levels and through various means. 
    • Carry out a plan of action for the development of a real Export Culture, through a number of activities undertaken each year, such as the "Exporters Week", and a number of other projects related with the subject. Subjects being handled at the "Weeks" include: analysis of recent trends in world markets; formulation of strategies for market penetration; connectivity as an export strategy; financing export projects; use of, and access to, export promotion instruments; design of business plans. 

    Performance 

    At the beginning, the CARCES operated as regional bodies. However, experience demonstrated that it was necessary to break them into State bodies, since the regions themselves presented a number of differences that made it difficult for the CARCES to operate smoothly. Today, there are 23 of those bodies. 

    The Central Government is providing significant support to them, and their presentations are given full consideration. The MINISTER meets at least once a year with each Executive Committee, in addition to continuous contacts maintained with them by the staff of MINCOMEX and PROEXPORT COLOMBIA. 

    Top of page  

    Posted 18 August 2010 
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