'Colombia has opportunities to take advantage of the war': IDB

‘Colombia has opportunities to take advantage of the war’: IDB

Colombia and Latin America in general have great opportunities to take advantage of the window that is opening in foreign trade due to the war that is currently being waged between Russia and Ukraine. This was the opinion of Mauricio Claver-Carone, president of the Inter-American Development Bank (IDB), who also rejected the “sad” and “terrible” nature of the war.

(Read: The first seven new air routes in Colombia are ready).

“Latin America is a safe region. There is more confidence and we have to take advantage of the moment (…) We can come out of the situation stronger”, said Claver-Carone, who later reiterated that “we must take advantage and connect better” between the countries of the region.

In fact, harmonizing current trade agreements on the continent would mean a growth in intra-regional trade, one of the lowest in the world, since only 14% of trade in Latin America and the Caribbean is intra-regional, compared to almost 60% from Europe and 41% from East Asia.

One reason is that current trade costs in Latin America and the Caribbean are almost 60% higher than those in Asia. Harmonizing the complex web of more than 30 intra-hemispheric trade agreements could increase intra-regional trade by nearly 12%, adding $20 billion to our economies.

Thus, in the short term, the agency does not foresee disruptions in the supply chains that connect Latin America with Russia and Ukraine, except for the issue of fertilizers, which represent between 20%-40% of imports of this material and they are already in talks with actors in the region such as Trinidad and Tobago or Brazil, to offer solutions.

(What’s more: CAN countries will reduce freight costs in international transport).

The president recalled that, regarding the Andean countries, a market of US$100 billion has been recorded for Colombia, another US$200 for Peru and some US$1,000 million in the case of Ecuador.

“For example, Ecuador has been a major exporter of bananas and plantains to Russia. Before the pandemic, Ecuador was already exporting some $1 billion worth of products directly to Russia. Peru exported about $220 million dollars in products to Russia, among other things copper mine. And Colombia exported close to $100 million in products such as coffee, meat and flowers,” said President Claver-Carone.
“There are more opportunities than challenges. The opportunities are enormous”, remarked the highest authority of the bank.

In this sense, Colombia has identified opportunities to diversify exports in Latin America.

“There are enormous opportunities for Colombia. Not only in the energy issue, as an oil exporter and in renewable energy issues (…) There are opportunities in the food, automotive, rubber and plastic, machinery and equipment, metallurgy, textiles, services sectors (…) Obviously , there are challenges that we have to overcome to achieve it, how to reduce the tax burden and improve infrastructure”said Claver-Carone, when asked about Portfolio.

One of the key points during the conversation “is that the region, Latin America, should not depend on Russia, and that Latin America can help offset the market problems created by the war, especially the problems with the supply and price of raw materials (oil, food, etc.)”.

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