An article in The Economist titled “Security in Colombia: new names, old games” (30th April 2011) about the state of security in the country prompted me to address the question that many British businesses ask: would you do business in Colombia?
Colombia is a vast country with rich resources and a population of 45m. According to The Economist Pocket World in Figures (2011 edition), the main Colombian exports are petroleum and related products, coal, coffee and nickel. Unsurprisingly, the US is the country’s main export destination with 38% of total exports.
In terms of advice for UK businesses, UKTI says “In addition to the FARC and ELN, there are several illegal armed groups operating in Colombia. Most of these groups are mobile, so it is difficult to assess whether an area will be unsafe at a particular time. In general, the more remote the area, the greater the potential threat to your safety. Threats against Western interests remain low. However, Western companies should remain vigilant as kidnapping remains a serious problem and Westerners are attractive targets.”
So why would you consider doing business in Colombia at all? UKTI summarises the key areas of trade that can benefit UK businesses:
“Colombia offers a large potential market with particular opportunities in the following sectors:
- Mining machinery and training in the oil & gas sector
- Environment including water treatment, Clean Development Mechanism projects, environmental consultancy and renewable energy
- Infrastructure
- Security equipment”
Clearly, there is risk and there is potential. But how do UK businesses perceive the balance between the two? Here are a few views from UK business people who have worked in Colombia:
Martin Hilton commented on the Yorkshire Mafia LinkedIn Group Discussion “I found the country the most scenic that I have visited, I found the professional people amongst the friendliest and most competent that I have met. After saying this there was always a sinister undertone, there were indiscriminate shootings; westerners were intimidated into purchasing worthless trinkets for cash. I had a lot of problems clearing product shipments through airport customs, although all paperwork was in order. I was stopped and intimidated by the Colombian army on numerous occasions early morning whilst travelling by taxi from Medellin to the airport, kidnapping of prominent western business people was common.”
Stan Jenkins also commented on the Yorkshire Mafia LinkedIn group discussion: “I also have visited Colombia in the past (Cali) and found the people very friendly and professional. When I went, there was a lot of violence and kidnapping, so my hotel had armed guards around it and our customer provided an armed support vehicle whenever we travelled between the hotel and the factory.”
Hannah Senior has had a more positive experience: “We also do business in Colombia, & were out there last year. Sniffer dogs and armed guards outside the hotel was discomforting, but other than that we found it a wonderful place. People were courteous, our customer professional, and travel around the country easier than many developing world countries. We weren’t in the country for long (although we have traded there for years) but my impressions are very positive.”
Andrew Wright, Risk Management Consultant at Knightsbridge Consulting in Bogotá, explains: “Inward investment is flooding into Colombia helped by improved security but also proactive government policies which provide one of the most pro-foreign investment environments in the region. Mining, oil and gas are booming, with UK trade and investment having increased substantially over the last 5-10 years. Security is greatly improved but still needs proactive risk management and local knowledge in certain areas, as well as awareness of community, environment and CSR issues that are beginning to have a greater impact on projects.”
It is clear that doing business in Colombia is viable yet expectations should be adjusted. The importance of up-to-date research and local contacts cannot be emphasised enough. Risks and benefits will depend on how you conduct business, what sector you work in and how prepared you are.
We would like to thank all the contributors to this article and to Mr Cleaver, who contributed to our previous blog post on this subject.
For more information, see
www.ukti.gov.uk/pt_pt/export/countries/americas/southamerica/colombia.html – UKTI profile on Colombia
www.economist.com/world/americas – news and features from The Economist
ukincolombia.fco.gov.uk/en/ – Foreign and Commonwealth Office in Colombia
www.colombianconsulate.co.uk/ – Colombian Consulate in London
Very interesting post!
Colombia is a country with great potential, however it is true and realistic admit that still some security problems represent risks for foreign investors. Nonetheless, since Alvaro Uribe government, security has notably improved and Juan Manuel Santos’ government is highly involved with programs to offer foreign investors support.
I think it is important to highlight that Colombia is a market in its “early” stages of development, which from my point of view means great potential. For instance, tourism is one of the industries with many opportunities.
I would say that the stereotype image of Colombia should not lead to underestimation of its potential and improvements in recent years!