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Selected as one of five strategic growth areas in the National Development Plan, the agricultural sector has traditionally been one of the primary growth engines in Colombia. However, recent supply and demand fluctuations have created challenging times for the sector and government funding has become central for ensuring its short-term viability. This is likely to improve as completion of renovation campaigns comes in sight, crops undergo further diversification, and competitiveness programmes are vigorously pursued to enable the sector’s performance in open markets. The sector is gradually changing its focus from traditional segments such as coffee and cocoa to products with higher demand in export markets. With 14.5m ha of unused land, the sector’s growth potential is tremendous. This chapter includes an interview with Juan Camilo Restrepo, Former Minister of Agriculture and Rural Development.

Over the past decade retail has become one of the biggest contributors to economic growth. In 2011 the sector’s contribution to GDP reached 8.1%, largely driven by the increasing size and wealth of Colombia’s middle class, greater access to financing and an inflow of foreign retailers. The arrival of foreign competitors with high levels of funding, innovation and efficiency has contributed to the sector’s dynamism as the retail offering continues to diversify and various segments experience rapid growth. Foreign capital inflows rose from $10m to $2.3bn between 2000 and 2011, largely driven by the increase in shopping malls. Colombia’s large population spread over numerous cities has been a key factor in supporting growth and bodes well for the future of the sector.

Weaker international demand and increasing foreign competition have caused the output of the industry sector to fall 0.7% in 2012, limiting its contribution to GDP to 12%. Traditional industries as well as the manufacturing of vehicle parts and their assembly have been hit the hardest. Nonetheless, some segments, such as fast-moving consumer goods, continue to display potential. Colombia’s shift in industrial focus from primary products to added value has also seen the development of niche segments such as cocoa products. Government initiatives such as the Stimulus Plan for Production and Employment and the Productive Transformative Programme, should help boost sector growth in the near future. This chapter contains an interview with María Claudia Lacouture, President, Proexport.

The construction sector has experienced consistent expansion in the past few years, registering 3.6% growth in 2012. While this figure is significantly lower than the 10% growth registered in 2011, prospects for 2013 suggest the sector will regain momentum driven primarily by aggressive government spending programmes aimed at closing the gaps in infrastructure and housing. Likewise, the real estate sector is showing signs of reaching maturity, as strong demand for housing and a healthy mortgage system provide access to property and have thus far, prevented speculation. Housing policies, which have traditionally focused on generating demand among the low-income and middle-class segments, are now shifting focus towards developing strategies to control rising property prices produced by the shortage of land in major urban centres. While surging property values and land prices remain a challenge, it has nonetheless increased the potential of the residential leasing market.

Colombia’s transportation network, currently a competitive disadvantage for the country, ranks poorly even by regional standards. Decades of under-investment and security concerns have created significant logistical complications, pushing up the duration and cost of domestic shipments, which has recently been exasperated by the high cost of fuel, particularly diesel. Budget allocations for investment in transport have risen significantly in the past two years as the government carries out major modernisation projects. Heavy investment and the gradual implementation of a Customs reform to streamline shipping processes should see the sector regain some dynamism in the near future. This chapter includes an interview with Fabio Villegas, CEO, Avianca.

The government plans to implement heavy spending programmes to address Colombia’s severely deficient infrastructure network, a result of a rugged topography and decades of corruption, militancy and shifting government priorities. The Santos administration, which identified infrastructure development as a key pillar of its inclusive economic development policy, has committed to increasing investments from 1% to 3% of GDP. Investment allocations in the national budget have more than doubled in recent years, exceeding $4.2bn in 2012 and 2013. By 2020 the government expects some $50bn to have been invested, with the bulk coming from the private sector following administrative reform of the National Infrastructure Agency and a new law on public-private partnerships, aimed not only at increasing transparency and efficiency but also at attracting private investment. This chapter contains an interview with Luis Fernando Andrade Moreno, President, National Infrastructure Agency.