87% of global business transactions are made in dollars.
Most of the country’s total exports are highly concentrated in a few companies and a few products and do not bring in enough dollars to satisfy the broad consumption needs. Consequently, the deficit —in dollars— that we carry with the rest of the world becomes unviable.
This deficit also affects public finances, because much of it is paid for with more debt, more investment benefits and more exports of Colombians working in other countries. Therefore, the effort that the National Government must make to meet the service of that debt is greater, which leaves fewer resources available for social and infrastructure investments.
This situation must be transformed, so that more and more products of the family basket are paid for in pesos and not in dollars. In other words, it must be reindustrialized, producing more national supply and reducing external dependence. Importing goods or services is necessary and desirable; in fact, it is one of the wonders of globalization; the bad thing is not having to pay them.
Today the dollars that arrive in Colombia come mainly from hydrocarbon exports, which leaves us very vulnerable to fluctuations in the prices of raw Materialsthat have high volatility.
The dollars that Colombia needs to attract must come from diversified production, which implies knowing, accompanying and stimulating existing and new agricultural, manufacturing and service activities in the regions and with the capacity to become competitive in world markets.
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South Korea did. Capital was not destroyed or fled; On the contrary, it went from being a “land of misery and chaos”, according to the American writer John Caldwell, to being the tenth largest economy on the planet, the sixth most industrialized country, one of the ten with the highest quality of life in Asia, with average income per person of US$2,900 per month. There the primer was different from the one implemented in Colombia.
The failure of foreign economic policy is monumental and undeniable. To give just one example, in the first ten years of the FTA with the United States, Colombian exports were reduced by half. Its review, as proposed by the Petro-Márquez government program, is more than justified.
This does not imply injuring relations with any business partner; on the contrary, it implies studying where they should be adjusted, with the purpose of expanding the commercial relationship, but in conditions of reciprocal benefit. So, it is important to work on the creation of a trade mission and international agreements, as has been supported by the trade union centrals and some producer associations.
In this sense, the logic of the internationalization Conpes (4085) of 2022 is misguided, since it starts from the statement that “we sell to the world what we produce, and we produce what we know how to do”.
The great problem of the internationalization of the country is its limited capacity to produce. We do not sell more precisely because we do not produce enough, and we do not produce because there has been no political decision. The country’s foreign policy has focused on promoting what little is produced, but, essentially, the promotion of production is marginal, dispersed and concentrated in a few regions. Fortunately, this is about to change.
The incoming government program has established a route to transform this situation, so that foreign trade is articulated with the objectives of turning Colombia into a world power of life. An economy needs to be built to fight climate change, overcome extractivism and reduce inequalities and discrimination of all kinds. It will be done through agreements that will carry out actions against work, the countryside, industry, the popular economy and tourism, among others.
It is a pact that will be built with the populations, social movements, trade unions, unions, the academy and all the authorities of the National, regional and local Government. The goal is for production to be the main source of wealth creation. It will have to coexist with the other forms, but the goal is that the production and the work related to it are the most important.
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The role of the dollar
87% of global business transactions are made in dollars. This is still the main medium of exchange. Colombia needs to bring dollars into its economy, to a very good extent, to pay for purchases of foreign merchandise.
For example, 58.2% of the manufactured goods we consume are imported and that costs us more than US$57 billion a year. Also 30% of food. A decade ago, our exports participated with two thirds of obtaining dollars and today they participate with only half.
The manager of the Banco de la República, Leonardo Villar, has established that the main causes of the increase in the price of the dollar are external, especially linked to oil. The increase in interest rates in the US has also had an influence, because it makes it more attractive to have dollars there.
However, to the extent that Colombia increases its ability to receive dollars for its production and creates competitive exportable supply, its vulnerability will be less.
An important part of the possibility of meeting the energy transition goals will be given by breaking this current external dependency, substituting low-value exports for a more sophisticated and complex trade in terms of environmental sustainability, scientific and technological content, and greater value. labor productivity.
* Coordinator for the Friedrich Ebert Stiftung in Colombia. Member of the junction team of the commerce, industry and tourism sectors.
** Director of the Conexión Analysis research center. Member of the junction team of the commerce, industry and tourism sectors.