The Organization for Economic Co-operation and Development (OECD) announced a key charter of policy priorities and economic advice regarding Colombia’s economic growth and prosperity.
The organization’s Secretary General, Angel Gurria, met with Colombian President Juan Manuel Santos to discuss and publicly release the “Better Policies for Colombia” report in Paris on Tuesday.
The Colombian government, currently in the process of a now year and a half attempt to enter the formidable 34-nation organization, engaged the assistance of the OECD to provide substantive input and suggestions regarding the nation’s “National Development Plan 2014-2018.”
President Juan Manuel Santos’ development plan rests on three core pillars: Peace, Equity and Education.
The “Better Policies for Colombia” report acts as a supplement to the OECD’s “Economic Survey of Colombia,” presented in Bogota last week.
The OECD labelled Colombia’s path to high-income status “challenging.”
“Further reforms are needed to tackle deficiencies in the country’s territorial development, education and innovation systems, competition framework, land rights, and infrastructure. Colombia should also consider a reform of its social protection and tax systems to make them fairer and more growth-friendly,” said the report.
The tax reform should become the government’s immediate priority, stated the report, explaining that “tax revenues are insufficient to meet the public spending and investment needed to close the productivity gap. The design of the tax system could be improved to make it more progressive, reduce the negative impact on employment and promote green growth.”
Additionally, “determined and strong government action is also necessary to tackle pervasive tax evasion,” said the OECD.
MORE: OECD bashes Colombia’s tax system for being detrimental to growth, favoring the rich
Inequality and slow productivity were other key blights on Colombia’s economy, with the OECD recommending a comprehensive policy reform package to combat the issues.
The OECD report illustrated Colombia’s slow productivity growth, labeling it well below the average level of the organization in which the South American nation is desperately trying to gain acceptance to.
Further reforms were suggested to tackle deficiencies in the country’s territorial development, education and innovation systems, competition framework, land rights, and infrastructure.
With regard to the OECD’s unsparing opinion of Colombia’s tax system, the OECD expressed its full support for a comprehensive tax reform in the country, taking into account the experience of the organization in this matter.
“We offer that we would gladly contribute to this effort by the President (Juan Manuel Santos) and the Minister of Finance (Mauricio Cardenas),” Gurria was quoted as saying on the President’s website on Tuesday.
In Gurria’s public speech, released on the OECD website, he firstly praised President Santos’ “ambitious reforms to guide Colombia towards a new era of growth.”
This was later qualified with the assertion that, “those achievements should not be grounds for complacency, however. Colombia continues to face very significant challenges as it strives to achieve inclusive growth. And the OECD stands ready to help identify and address those challenges.”
Sources
- La OCDE destaca solidez de la economía colombiana (Presidencia de la Republica)
- Better Policies for Colombia (OECD)
- Launch of the report on Better Policies for Colombia (OECD)
- OECD Urges Reform Of “Inefficient And Regressive” Colombia Taxes (Bloomberg)
