Nyu stern presentation

NO LOST CAUSESInside the transformation of Colombia

Remarks by Alvaro Uribe VélezAPRIL 2013

Issues to address

1. A historical problem2. Facing the problem: From

campaign to Government3. Generating change in times of

crisis4. Colombia current challenge5. Peace process with FARC6. Latin America’s big challenges

1. A historical problem

“Every creative journey begins with a problem”

Colombia in 2002 was a fragile State

Security

28.837 homicides

2.882 kidnappings

69 homicides per 100.000 habitants

1.645 terrorist attacks

350 mayors out of their municipalities

158 municipalities without police

Economy

Average Economic Growth 1994-2001: 2.1%

GDP per Capita: US$2377

Investment as % of GDP: 16.5%

Exports: US$11.975 million

FDI: US$2.100 million

Inflation: 6.99%

Fiscal balance: -3.2%

SocialUnemployment: 16.2%

Health Coverage: 25 million Colombians.

Pension affiliates: 4.5 million

Poverty:57%

Education Coverage: Primary 97%, High school: 57%, University: 24%.

Mobil Phone Lines: 4.6 million

Internet coverage: 1.9 million

The Colombian Paradox: a long and stable democracy in a permanent threat from terrorist groups, drug dealers and organized

crime…

1. A historical problem

Colombia faced a Confidence DeficitThe elusive quest for

peaceMany governments exhausted all their

political capital attempting to reach

peace through political dialogue…the result was military strengthening

from illegal armed groups and a rapid growth in

their criminal activities (68% thought the

country was going in a negative track)

Terrorist Groups (Guerrillas and

Paramilitaries) had created a sense of

defeat in the Colombian people

Fear impacted in the Colombian people

Mindset

The lack of investmentThe drain of human

capitalThe sense of danger in

Colombian roadsThe expansion of

massive kidnappings created an emotional

domino effect

2. Facing the problem

Vision

Policy

PRINCIPLES

CommunicationInnovation

Leadership

Results


VISIONOur vision was to build a Comunitary State:

CONFIDENCE was our main goal Without Confidence:

No investment Unemployment Lack of opportunities Brain Drain (Young people wanted to leave without a

return ticket) Three main Policies:

Democratic Security Investment with fraternity Social cohesion

For the First Time a National Development Agenda had Security as a driver of Development (Security = Investment = Social Cohesion)

No more a debate between left and right


POLICY• Democratic Manifiesto (100 Points)

Democratic Security

Security for All

Fight all forms of crime

Security without Martial Law

Security with liberties and Human Rights

Victims recognition

Investment with Social

ResponsibilityInvestor Security (Human, Legal

and Political)

Sound Macroeconomics

Incentives

Access to markets

Competitiveness Factors (Infrastructure, Connectivity,

Banking,)

Social Cohesion

Education Revolution

Health with coverage and quality

Access to credit (Banca de oportunidades)

Vocational Training

Conditional Cash Transfers


Principles

Political Pedago

gy

Build a citizen

coalition

Macro Vision & Micro

Management

Permanent dialogue

with citizenship

Beyond traditional

politics (Colombia

FIRST)

Accountability

Security as a

Democratic Value


Messages

Security as a Democratic Value

Strong hand with a big heart

To work, work and work

Against corruption and traditional politics

Communication


InnovationBefore

Presidents inside the office

Presidents not engaged in details

Lack of an effective vision communication

Solve problems through political

channels

Political calculations

Secretaries appointed by Political

Representation

Secretaries rotated on a permanent basis

Luxurious governments

Congressional Governance

InnovationPresident with the People(Consejos Communitarian)

Macro vision & Micro Management

Three eggs

Face problems with regular citizens

Pedagogic policy formulation

Secretaries appointed by experience

4 year term secretaries

Austerity

Citizen Governance


Innovation in SecurityRecovering

SecurityMacro Vision and Detailed Follow up:•Daily commitment to monitor security in every region.

•How citizens had the President Mobile Phone Number

Early Victories :•Road caravans

•Massive kidnappings are over

Strategic Force Integration•All Forces working together.

•Share success

National Informant Network•Citizens became active in denouncing criminals

•Reward Mondays

Commander in Chief assumes responsibility•The Granda Story

•Operation Fenix: Fire the Air Force Commander

•Operation Jaque: The pressure for a humanitarian exchange and the final outcome

Smart Weapons:•The importance of strategic warfare

Extradition:•The decision to extradite the Paramilitary Kingpins

2. Facing the Problem

Leadership

Mobilization

Drivers

306 Communita

rian Councils

Weekly Security Councils

52 Economic dialogues

Result Driven

Administration

Leading by example

Direct Democracy

(Sate of opinion)

Determination to find solutions

Communication with the truth


Moments of truth:1. Nogal Bomb: Bogota cries but never surrenders2. Killing of 11 regional senators: Facing their families

when rejecting humanitarian exchanges3. The rescue of Fernando Araujo4. Meeting Chavez after the Bombardment in Ecuador:

a debate in live T.V.5. The rescue of National University President6. The story of Emmanuel7. The military agreement with the U.S.8. Operations FENIX and Jaque9. Extradition of the paramilitary leaders

Leadership: Tough Decisions


Indicator 2002 2010

Homicides 28.838

15000

Kidnappings 2.882 228

Homicides per 100K Habitants

69 35

Terrorist attacks

1.645 250

Municipalities without mayors

presence

350 0

Municipalities without police

158 0

Security EconomyIndicator 2002 2010

Average Economic Growth

2.1% 4.3%

GDP per Capita

2.377 5.300

Invest % GDP

16.5% 24.6%

Exports US$11.000

US$ 39.000

FDI US$2.100

US$ 7.000

Inflation 6.9% 2.5%

SocialIndicator 2002 2010

Unemployment 16.2% 11.6%

Health Coverage 25.1 million

43.1 million

Pension affiliates 4.5 million

7.1 million

Poverty 57% 37%

Education coverage (Primary,

Hs, University)

97%57%24%

100%79.4%35.5%

Mobile phone users

4.6 million lines

41 million lines

The combination of our Policies produced significant results: Lowest violence levels in two decades, highest levels of social coverage in Colombian History and highest levels of

Exports and FDI in more than 5 decades.

Results


Leadership, governance based on citizen support and political Will, helped built significant historical changes in strategic sectors: Reform the oil and gas sector:

1. Colombia is close to produce 1 million barrels per day from 250.000 in 2002 2. Ecopetrol Reform 3. Created the National Hydrocarbon Agency

Reform the Telecom Sector:1. Restructure the Colombian Telecommunications Agency

Reform the Colombian Social Security Agency More than 2000 criminals were extradited Paramilitary structures were dismantled FARC suffered its biggest historical defeats Colombia experienced its largest historical FDI flows Biggest historical reduction in illicit crops More than 10 FTA’s signed and negotiated Largest historical health and education coverage Largest historical credit expansion Largest historical tourism flows to the country

Results

3. Change in times of crisis

Lessons

Lincoln• Get out of the

office• Honesty• Courage• Strong Hand• Commit to

results• Preach a vision• Talk to people

directly

Kotter• Honesty• Energy• Competence

Moss Kanter• Consistency• Congruence• Competence• Caring

Security

Maintain Macro-Vision and Micro-

Management

Continue dismantling all

terrorist organizations

Continue dismantling drug cartels apparatus

Strengthen Citizen Security agendas

with local authorities

Economic

Face new trends of currency

appreciationMaintain and

increase FDI flows (Security,

incentives and stability rules)Fiscal Policy to

face new countercyclical

challenges

Increase tax collections

Expand new trade markets through

FTA’s

Social Cohesi

onFight labor

informality and create quality jobs

Insure education and health quality

Expand vocational training coverage

Create Entrepreneurial Family Transfers

program

Political

Judicial reform

Strengthen Democratic Center

Improve local institutional

capacity

New law implementation

(Victims and land)

Prevent the emergence of

populist movements

4. Colombia current challenges

5.Peace talks in Colombia

1. Defining peace: Colombian National Seal has two important concepts: Liberty

and Order A peaceful country requires the right exercise of individual

liberties and a general environment of institutional and social order

In 2002 Colombia lacked both Concepts: 28.000 homicides 2800 Kidnappings 1645 terrorist attacks 350 Municipalities without majors

Our Democratic Security Policy was built to restore institutional order and protect the exercise of individual liberties. It was a policy for peace not a policy for war. The great evidence is that by 2010 homicides were reduced 50%, kidnappings 80% and terrorist attacks by 90%

5.Peace talks in Colombia

2. Our Democratic Security Policy was based on Strong Hand and Big Heart. We conceived Universal Demobilization for all members of

illegal armed groups We confronted all illegal armed groups with the same

determination and open the door for peace processes. Under clear conditions defined in the Peace, Truth and Reparation Law

The peace process with AUC was based on: Cease of illegal activities International verification (OAS) Incarceration Anyone who did not cooperate or continued with illegal activities will

lose the privileges and be extradited if any extradition request existed

No eligibility for those accused for crimes against humanity or crimes different than political delinquent practices

5.Peace talks with FARC

Prevent Big Failures today:

Negotiation without seizure of criminal activities Negotiating Policy with weapons on the table

clearly affects Colombian Democratic Values Allowing political participation to individuals

responsible for crimes against humanity is a wrong message for our democracy

No imprisonment Allowing dictatorial regimes that affect liberties

and support FARC, as guarantors is a bad signal

5. Peace talks in Colombia The Peace process that I would support:What Colombia

thinks

68% of Colombians are not willing to pardon crimes committed by terrorist

organizations

78% of Colombians are against no prison sanctions

for terrorists

72% of Colombians are against political

participation by terrorist groups

My opinions

No impunity for crimes against humanity

Justice, peace and reparation

Immediate release of kidnapped people

Unilateral cease of criminal activities

My opinions

International verification of disarmament

No policy agenda on the table

Reinsertion agenda

6. Latin America’s big challenges

Policy Changes since 1980 match four range of opportunities

Population

Close to 600 million people

Average age between 24 and

28

Per Capita Income in PPP

close to US$10.000

Poverty reduction

64% of our population is a expanding middle class

During the last decade 40 million people have left

the poverty lineLife expectancy has

increased from 65 to 75 years

Child mortality has been reduced by 50 per cent

Literacy rates are above 94%

Mobile phone penetration has increased by 78 per

cent

Internet access has increased by 33%

Healthcare coverage has increased by 50 percent

water and sanitation coverage has reached

80%

Commodities in time of Demand10 percent of the

World oil reserves

6 percent of the World Gas reserves

Almost 50 percent of the World cooper

reserves 50 per cent of the

World silver reserves

13% of the World iron reserves

26% of the World fertile land

24% of the World beef supply

Bio Reserves

20 per cent of the World

Biodiversity is concentrated in the Amazon ring

Almost 50% of the World

potable water supply

57% of the world primary

forest

The strengthening of Liberal

Democracy

The adoption of an institutional

Framework in favor of foreign

and national investment

The construction of a sound and

sustainable social safety net

The expansion of export markets

and the commercial

integration with the World (FTA’s)

A public administration

driven by results

A sound Macroeconomic Administration driven by fiscal and monetary

prudence

Better regulatory environment

Construction of strategic

infrastructure

The consolidation of an innovation

agenda leaded by an improvement in

education

A well capitalized financial sector and

the constant expansion of

financial services

The change process is a consequence of the consistency, congruence and sense of urgency that a group of countries have adopted as their policy cornerstone. Brazil, Mexico, Colombia, Chile, Peru and Uruguay represent 70 per cent of the region’s population and 75% of the regional GDP.

Today countries like Panama, Dominican Republic, Costa Rica, Salvador, Guatemala, Honduras, Paraguay, as well as most of the Caribbean States, are following that line of behavior


The regional current Political Map is a “Tale of two cities” like the Charles Dickens Book… (The ALBA and the non Alba Model)

ALBA (Leaders: Venezuela, Ecuador,

Bolivia, Nicaragua and Cuba)

Anti-U.S

Anti-Free Trade

Lack of investment Confidence

Weak institutions

Political Insecurity

Ideology driven countries

Political Polarization

Modern Democratic Center Countries (Brazil, Colombia,

Peru, Chile, México, Uruguay, Paraguay, Panamá, Republic Dominican, Costa Rica, etc)

Cooperation with the U.S.

Pro Free Trade

Investment Confidence

Independent Institutions

Political Stability

State Long Term Policies and Mgt by

Results

Organized Party Systems

The Democratic Center takes the lead: • Investment grade countries are in this Group: Mexico, Brazil, Chile, Colombia, Peru and Panama.• Countries with more market access through FTA’S are in this group• Countries with more FDI are in this group• Countries with more Middle Class Expansion are in this group.• Better fiscally sustainable social programs: Chile, Mexico, Brasil and Colombia.

Only the group of Countries in the Democratic Center will become the regional active participants of the Emerging Markets Boom…some of the ALBA Members will see some benefits, but without solid long term development agendas, they will face transitory profits…

But not all the socio-economic models are a success story…


Venezuela

Inflation

Reduction in oil production

Brain drain

Social conflict

Insecurity

Private initiative in Jeopardy

Bolivia

Loss of citizen support

Quality of live deterioration

Lack of private initiative

Loss in private investment

Ecuador

Press Liberties in danger

Lack of long term private

investment

Political stability at the expense of higher tensions

Oil driven political power

Nicaragua

Institutional deterioration

(Reelection without constitutional

authority)

Corruption

Private initiative: Uncertainty

Shameful Chavistas

Bad policies are deteriorating the political and economic context in the ALBA Countries….


Building Modern

Democracies (5

parameters)Security

Freedoms and Private Initiative

Independent Institutions

Social Cohesion

People Participation

A dynamic Economic

transformation

Investment Target Policies

Maintaining Fiscal and Monetary transformation

Integrate commodity and

knowledge based economies

Expand export markets

Create an Entrepreneurship culture (Innovation

agenda)

Closing Social Gaps

Improve education (quality, coverage,

vocational)

Insure Universal Healthcare

Formal Job creation

Access to Finance

Climate Change,

Environment and

Energy Sustainabilit

yExpand renewable sources

Install an energy efficiency

conscience

Improve waste management

Protect the Amazon Ring

Reduce Co2 Emissions

Despite the changes that have been achieved some important challenges remain…

The region top challenges


Final Thoughts

1. Human problems require human solutions

2. Our strategy worked because it was conceived by the people, by the people for the people

3. Our esence was pedadogy not demagogy

4. Macro Vision and Micro Management are esential to succed in times of crisis

www.alvarouribevelez.com

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Nyu stern presentation