Colombian Vice President Santos
Urges Investment, Free Trade
March 2009
STANFORD GRADUATE SCHOOL OF BUSINESS —Colombian Vice President Francisco Santos admits his country still has problems with drug cartels, but its security and economic opportunities have improved dramatically in the past seven years, he told a packed room of Stanford Business School students on February 27. His government's emphasis on security and a tradition of strong democratic institutions have allowed the country to substantially reduce its murder and kidnapping rates while increasing direct investment, he said.
Speaking on campus at the invitation of the Business School's Latin American Club and another student group planning a study trip to Colombia, Santos was in the United States to promote his country as a foreign investment opportunity. He did so by describing the turnaround Colombia has made since he and President Álvaro Uribe took office in 2002.
The country at that time had been ravaged by drug wars that included the assassination of numerous government officials and the displacement of 400,000 citizens. The first step toward healing was to regain the trust of its citizens, he said, by fortifying the armed forces and judicial system. The year Santos took office there were approximately 3,000 kidnappings. Last year there were 250, he said, a figure smaller than the number of kidnappings in Phoenix, Ariz. Similarly, Colombia's murder rate has been reduced by 50 percent since 2002, and the displacement of citizens has dropped 75 percent.
That focus on safety ushered in a return of foreign investment, tourists, and citizens who had fled the country, said Santos, a former journalist and social activist, who himself was kidnapped by a drug cartel in 1990 and held for ransom, along with 10 other journalists, for 8 months.
"Foreign investment was approximately $2 billion USD in 2002 and has since risen to $8–$10 billion," Santos said. He credited that growth to reduced taxes, private business incentives, and a safer political climate.
"We want to make Colombia a platform of exports," he said. The country has a $7 billion trade relationship with neighboring Venezuela, is in talks with Canada and the European Union for trade agreements, and is encouraging passage of a U.S. free-trade agreement that was negotiated by the Bush Administration in 2006 but never ratified by Congress. Investing in its citizens has encouraged Colombia's economic growth, he said. Health care access rose from 35 percent in 2002 to a current 85 percent. He said he hopes for full access by late next year, as well as education being accessible to all citizens by this year's end.
"We were able to do all of this by having strong institutions in the first place, believing in them, strengthening them, and providing a strong operating framework within the country. While other Latin American democracies imploded under the strain of violence, ours only became stronger. We're over some of the worst violence on the continent, but it took us 20 years."
During those turbulent times, the country, which has been a democracy since 1837, had the foresight to broaden its constitution and decentralize the government, he said, and never defaulted on foreign loans.
Answering student questions at the end of his talk, Santos said his country still faced a war on drugs, which he likened to "chasing a ghost." However, the last seven years are proof that a dire situation can be turned around, he said. For example, two General Electric executives were kidnapped in 1997. The company paid the ransom but the hostages were killed, and GE pulled out of Colombia entirely. Today, the global behemoth is back, as are other corporations, enough that the country was named the "hottest business market" in 2007 by BusinessWeek.
—Arthur Patterson