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OECD Economic Surveys: Colombia 2013

Economic Assessment

image of OECD Economic Surveys: Colombia 2013

OECD's 2013 Economic Survey of Colombia examines recent economic developments, policies, and prospects as well as taking a more detailed look at inequality and productivity and growth.

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Boosting productivity and economic growth

Economic growth in Colombia has been resilient, yet sluggish. The country has a large productivity gap with OECD countries, reflecting low levels of human capital, physical capital and total factor productivity (TFP). Furthermore, the country has experienced low and broad-based labour productivity growth, mostly due to an overall decrease in TFP since the 1980s. The commodity boom has recently boosted activity and affected other tradable sectors. Improved security conditions and prudent macroeconomic management in the last decade have spurred investment and growth, which should also benefit from recent reforms. However, reducing the productivity gap further and generating higher sustainable growth requires reforms to address key bottlenecks. The education system should be enhanced through bold reforms that promote accountability and a focus on skills and training. The large upcoming investment in transport infrastructure should involve improved prioritisation and planning, and a better involvement of the private sector. Access to finance needs to be increased through more efficient regulation, greater competition and a more active involvement of development banks. Moreover, regional disparities should be addressed by strengthening sub-national governments to reduce the incidence of corruption in regional development. It is also important to improve the business environment by promoting competition and facilitating firm creation. These policies should also help reduce informality, as they raise the benefits of formal activity.

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