Improve outcomes and equity in education. Limited access to high-quality education increases income inequality and inhibits productivity.
Actions taken: As part of the peace process special education programmes targeted at rural areas were started in 2018.
Recommendations: Strengthen access to early childhood education and its quality. Limit grade repetition and provide additional support to disadvantaged students. Improve governance in vocational education and adjust curricula and funding according to labour market needs. Increase employers’ involvement in the delivery of vocational education.
Reduce barriers to trade, including infrastructure gaps. The economy remains relatively closed to trade, despite the numerous trade agreements signed. High tariff dispersion, an increasing number of non-tariff barriers, infrastructure gaps and long customs procedures, constrain trade and productivity.
Actions taken: Further progress in the Fourth Generation (4G) public-private partnership programme was made in 2017 and 2018.
Recommendations: Reduce dispersion in tariffs. Evaluate non-tariff barriers and eliminate those found to be distortive. Continue to improve transport infrastructure, particularly primary roads. Improve long-term planning of intermodal transportation and the use of cost-benefit analysis. Streamline customs processes.
Reduce barriers to formality. High non-wage labour costs and minimum wage in combination with complex and costly systems to register firms and declare formal workers promote informality, contributing to high levels of inequality and low productivity.
Actions taken: No action taken.
Recommendations: Continue to reduce non-wage costs by phasing out contributions related to Cajas de Compensación. Differentiate minimum wages for regions to account for differences in productivity. Establish one-stop shops to start-up companies. Reduce the monetary cost to register a company.
1Reduce regional disparities. Economic performance and living conditions are very uneven across regions. Poor physical and social infrastructure and weak local governance and service delivery hamper productivity and inclusiveness, particularly in rural areas. The end of the 50-year armed conflict creates an historic opportunity to tackle striking differences in living conditions.
Recommendations: Improve rural infrastructure, particularly secondary and tertiary roads. Complete and update the property cadastre to improve revenues of local governments and land use. Shift the emphasis of agriculture policies away from providing subsidies to producers and focus them more on providing public goods or physical and social infrastructure.
Improve R&D support and its efficiency. Colombian firms invest little in innovation, which hampers productivity. Most companies that make use of tax credits are large and in traditional sectors, such as oil.
Actions taken: To avoid excessive fragmentation in R&D projects run by regional and local governments, as of 2018, funding will be allocated directly to research centres. An expenditure review of government interventions in this area has been undertaken in 2018.
Recommendations: Strengthen collaboration between research centres and companies. Promote more the use of R&D tax credits by SMEs and by new firms. Improve the follow-up of firms receiving support to inform the design of new programmes.
