BOGOTÁ – Colombia and Brazil could close their integration gap by scrapping tariff barriers and improving transport logistics, among other initiatives, said Inter-American Development Bank President Luis Alberto Moreno at the First Colombia-Brazil Investment Forum held today in the Colombian capital.
Colombian President Juan Manuel Santos and former Brazilian president Luiz Inácio Lula da Silva were present at the event organized by the IDB, the Office of the Presidency of Colombia and the Colombian trade promotion agency Proexport. The forum underscored the potential benefits of greater integration between South America’s two most populous economies. More than 600 business leaders and government authorities from both countries took part in the event.
In his remarks to the forum, President Santos stressed the importance of foreign investment for his country. "Our goal is a more equitable society with less poverty," he said. “Colombia is a friend of Brazil," he added. "Let’s look here for investments that translate into reduced poverty and more jobs and income.”
Former president Lula called the initiative "the most important one carried out between Brazil and Colombia."
"It's time to think about our shared mission," Lula said, "to promote South-South integration, not only in terms of purchases and sales among businesses, but also in terms of models that foster innovative businesses and generate income and employment,especially for the poor."
If Colombia and Brazil maintain their current growth rates, in 20 years they will comprise a market of 180 million middle class people with very similar social and educational profiles and double their current purchasing power. This represents an extraordinary opportunity for companies in sectors such as housing, food, services, health, education, and transport.
"This is where an agenda of deeper and more inclusive regional integration begins to take shape, going beyond trade and generating a dynamic that results in benefits on both sides of the border," said Moreno.
"We can start by doubling bilateral trade within five years," he added. “This will require public policy actions and a strong commitment from the private sector.”
“This will significantly close the current integration gap between both countries," he said.
Speakers included Brazilian Planning Minister Miriam Belchior and Communications Minister Paulo Bernardo, and the governors of four Brazilian states: Geraldo Alckmin of São Paulo, Sergio Cabral of Rio de Janeiro, Cid Gomes of Ceará, and Eduardo Campos of Pernambuco. The governors, who represent more than 70 million Brazilians, held meetings with representatives of the Colombian public and private sectors.
Participants from the business sector included Jorge Gerdau, founder of Movimiento Brasil Competitivo; Luis Carlos Sarmiento of Organización Sarmiento; André Esteves of BTG Pactual; Marcelo Odebrecht of Grupo Odebrecht; Germán Efromovich of Avianca; José Sergio Gabrielli de Azevedo of Petrobras; and Carlos Raul Yepes of Grupo Bancolombia, among other prominent figures.
The event featured panel discussions on trade and investment opportunities between Brazil and Colombia, covering activities such as transport and telecommunications infrastructure, agribusiness, mining and energy, and financial services.
Trade between Colombia and Brazil quadrupled since 2004, reaching $3 billion in 2010. However, a study released by the IDB’s Integration Department noted that trade between these bilateral flows represented merely 0.7 percent of the total foreign trade of both countries. Lack of infrastructure connecting these two South American neighbors remains a major constraint.
In fact, Colombian firms exporting to Brazil pay shipping costs equivalent to sending goods to Canada, according to the study. Freight costs from Brazil to Colombia are also very high.