Mr. Chair, and honourable members, it's a pleasure to be here, and I thank you very much for the invitation.
I will try to be brief. I know you have some questions. I know you are already very familiar with the Pacific Alliance and have heard from one of our ambassadors already.
I have a written statement and I've provided copies, but I'd like to read it briefly.
Colombia continues to sustain a very positive economic performance. We have been growing at an average rate of 4.5% over the last 10 years. This has meant very welcome changes for our country.
During the last decade, the size of our economy has doubled, and this has meant that our middle class has grown from 16% to almost 30% and that we have finally begun to reduce poverty. In 2012, Colombia attracted a record amount of foreign investment, over $16.5 billion, and this is a result of our stable economic policies, increased security, and our legal stability.
After a very difficult time, Colombia is now widely seen as an emerging economy and a regional leader. How did we get there?
The transformation is due to several very basic reasons.
The first one, of course, was by preserving sound economic policies. That means maintaining an independent central bank, which is focused on controlling inflation, and prudent public spending policies, including responsible management of our debt. As you know, Colombia is the only country in Latin America that has never defaulted on its debt. Also, there has been transparent economic information available, with the government emphasizing the provision of open information as to the government's numbers, statistics, and management of the budget. This allows capital markets and investors to judge economic performance with accurate information.
The other reasons that explain the transformation of Colombia are our focus on security and the improvement of programs for social inclusion.
On security, after experiencing an unprecedented wave of violence throughout the late nineties to 2004, the government, through considerable sacrifice from Colombians and the generous support of the United States and other countries, was able to push insurgents to the more remote parts of the country and to cut their numbers by more than half.
The government reclaimed control of the territory and has also been implementing crucial social programs of supervised assistance to the poorest members of society. Programs, carefully audited, including incentives like conditional transfers to encourage school attendance and health care prevention, have been very successful. Just in the last year, 1.2 million people were lifted from the extreme poverty category because of these programs.
As the Colombian economy continues to grow, we find that the sectors showing the most promise are mining, financial services, real estate, business, and commerce. As the rating agencies improve our standing, inflation continues to be kept at 2%, unemployment continues to diminish—if somewhat more slowly than we would prefer—and many of our exports and imports grow substantially.
The relationship between Colombia and Canada has been a very positive one since the formal establishment of our relations in 1953. However, with the entry into force of the free trade treaty of August 15, 2011, it has entered into a new strategic phase. In the first 18 months of the agreement, Canada increased its presence in the Colombian market. Its exports just in the last year increased over 19%, bringing the total for the first time to over $1 billion. Canada's investment has also increased significantly, notably in financial services, mining, and energy. According to the Central Bank of Columbia, Canada recorded cumulative foreign direct investment in Colombia of $1.5 billion in the last 10 years. The main Colombian products that we export to Canada, and which show a healthy increase, are fresh flowers, sugar, textiles, and apparel, whereas the main Canadian exports, which are growing, are grains, industrial machinery, and vehicles.
Colombia firmly believes in the benefits of free trade as a tool to promote jobs and to foster economic growth. We believe in free enterprise, we protect investment, and we aim to provide security to all nationals and foreigners in our territory within a framework of strong respect for human rights.
As in every good, strong relationship, from time to time certain issues arise requiring special attention. While we advance on many fronts, the issue that we have identified as requiring significantly more time and attention is the facilitation of the entry of Colombian visitors to Canada. An improvement in this matter would lead to an increase in our bilateral trade, investment, and tourism. We are convinced that if we work together on this issue, as we have done with many other issues and close allies, we will be able to achieve significant progress without compromising the security and policies of either country.
The Pacific Alliance was created just two years ago, in April 2011, in Lima, as a mechanism for economic and trade integration. It seeks to act as a trade investment bloc and to ensure full and free movement of goods, services, capital, and its people. It is here where it goes beyond the traditional free trade agreement that generally limits itself to services and goods.
As you know, the alliance is composed of Colombia, Mexico, Chile, and Peru, and emerges from the affinity between these four Latin American countries on issues, such as the importance of the rule of law, the market economy, openness to foreign investment, and a common goal of increasing trade and also deepening our political and economic relations with the Asia-Pacific region.
All four countries have free trade agreements among themselves already, as well as with third countries, such as Canada, the U.S., and Costa Rica. The four member countries of the alliance jointly comprise a population of about 260 million people, with an income per capita of about $13,000 U.S. Colombia, Mexico, Chile, and Peru together account for half of our region's foreign trade—$534 billion in exports and $520 billion in imports—and are recipients of an average of $48 billion in foreign direct investment. Members of the alliance are expected to grow between 3.5% and 5% this year.
The alliance may integrate other regional economies in the future. It is a unique opportunity to capitalize on the stable growth of these economies. It has the following objectives: to build an area of deep integration and move progressively towards the free movement of goods, services, capital and people; to promote further growth, development, and competitiveness of the alliance's economies; and to become a political, trade, and economic integration platform projected to the world, with a special emphasis on the Asia-Pacific region.
The alliance has an active and comprehensive agenda, based on the significant results already achieved on trade liberalization by its members. For example, there will be new joint initiatives between all the export promotion agencies of each country, as well as much closer cooperation on climate change research, student mobility, and a way to make migratory measures more flexible.
The alliance has a very simple hierarchy. It has a summit of its leaders; a council of foreign affairs and foreign trade ministers; a high level group, which really is composed of the vice-ministers of foreign affairs and foreign trade; and technical groups, who will be looking at services, cooperation, communications, institutional issues, institutional affairs, trade and integration, intellectual property, and government procurement.
What is Colombia's view of the Pacific Alliance? Colombia sees it as very pragmatic mechanism with not a lot of institutions. It does not seek to impose any restrictions on the existing integration initiatives in the region. On the contrary, it complements and promotes the creation of ideas in order to enhance integration opportunities and contribute to strengthening the economic and trade relations. It is an open process, involves the participation of other states, and according to the framework agreement, third countries can participate as observers or special guests.
Colombia's interest is having a platform for deepening trade and investment with the countries in our region that share our values, share a commitment, and have a like-minded way of looking at the future in economic terms. The alliance allows the entry of Colombia into some of the most dynamic markets of the Asia-Pacific region.
The consolidation of the Pacific Alliance will allow for deeper integration, not just goods and services, but much more. Harmonizing the rules of the four countries will eliminate many unnecessary barriers so that the alliance market will be bigger, and its common rules will attract a lot more in foreign investment. This way, the whole region can achieve greater growth and reduce poverty and unemployment.
Colombia will assume the pro tempore presidency at the summit of the alliance next May 23 in Cali, Colombia.This will be the seventh summit at the leader level since April 28, 2011.
Currently, we have nine member countries with observer status: Australia, Canada, Costa Rica, Spain, Guatemala, Japan, New Zealand, Panama, and Uruguay. Costa Rica and Panama have made clear their intention to become member states.
I'd just like to mention two recent developments in the Pacific Alliance. One is that last November Mexico announced that, pursuant to an agreement in Chile, nationals of Colombia and Peru who are travelling to Mexico will no longer require a visa if they're coming for non-commercial exchanges for up to 180 days. That is a very big advancement. It means that our consular and our immigration authorities are working much more closely together, allowing for the free movement of people.
The other is the launch of our platform for student academic mobility, which initially is looking at each country awarding a hundred scholarships. The first call will be for 50 scholarships per country, to be granted in the second half of this year to accomplished students so they can get higher education in the member countries.
I want to finish my statement by saying that our aim is to complete the tariff liberalization for 90% of goods this year and the phase-out of the remaining 10% in a maximum of seven years, to be agreed by May 2013. That's the purpose, and this should happen in May, in Cali.
I think that pretty much covers it, and I would open it to questions. Thank you.
