World Economic Forum 2016: Medellin, Colombia Grab Limelight

Medellin’s growing international reputation as a center for high-profile events took another big step forward June 16-17 with some 800 participants at the prestigious World Economic Forum (WEF) 2016 Latin America regional conference.

According to the WEF conference organizers here, some 550 leading business and organizational leaders from 40 countries — mainly from Latin America but also from Europe, North America and Asia — joined three sitting presidents (from Colombia, Argentina and Dominican Republic), several former presidents and prime minsters, 30 top government ministers and numerous local and national officials at the conference, which focused on opportunities and challenges in the global, high-tech “fourth industrial revolution.”

WEF ‘White Paper’ Highlights Medellin

WEF simultaneously released a new “white paper” study showing how Medellin and six other global cities recently have emerged as outstanding players in the growing “global value chain” (GVC) industrial trend.

“Medellin’s renaissance has been mostly driven by two perspectives that have sought to integrate the people into the city’s dynamics,” according to the WEF study.

“First, the city strove to build social inclusion through urban interventions that connected citizens from less developed areas to the city’s central areas, including a sustainable transport system, quality public schools, library parks and a series of comprehensive urban projects.

“Second, recognized as the industrial capital of Colombia, and considering the rapid changes in the global economic context, the city decided to migrate from an industry-based economy into a knowledge-intensive one where citizens acquire the capabilities to become involved in its economic development.

“For instance, having a university-enterprise-state [local government] committee as a meeting space for businessmen, academia and government representatives since 2003 has created a unique field for discussion around science, technology and innovation as the main engine of economic growth.

“Medellin is the first city of Colombia to build a public policy around science, technology and innovation (STi). With the special leadership of [high-tech ‘landing’ center’] Ruta N, the STi Plan 2011-2021 guarantees not only the resources, but the commitment of the municipal government while directing the efforts to added-value activities as a mechanism for competitive advantage.

“The city has facilitated the landing of more than 130 companies from 21 different countries that have found in Medellin the right conditions to grow, and have created more than 2,000 qualified new jobs mainly in ICT [[information and communications technology], energy and healthcare.

“In the northern area of the city, where Ruta N is located, an innovation district of 172 hectares is being developed with the objective of becoming the epicenter where different actors converge around STi activities and where 28,000 new quality jobs will be created by 2021,” WEF’s study concluded.

WEF Session Highlights

Among session highlights here:

1. Colombian economic growth outshines most of Latin America: Maria Claudia Lacouture — Colombia’s Minister of Commerce, Industry and Tourism – pointed out in a speech here that growing foreign direct investment (FDI) resulted in 125 new companies coming to Colombia in 2015, up 29% year-on-year.

These companies joined 597 other multinationals that have arrived in Colombia since 2010, investing a total of US$25 billion. This investment came even in the face of the recent downturn in oil and mining FDI because of the global crash in oil, coal and industrial metals prices.

2. New drug policies emerging: Medellin and Colombia have suffered greatly from violence and drug-trafficking — and gained vast, unwanted global publicity, especially from the “Medellin Cartel” era of 25 years ago. But drug cartels have since evolved into global organizations (resembling multinational corporations) — and today it’s Mexico, rather than Colombia, that grabs most of today’s drug-violence headlines.

Responding to these trends, WEF’s opening session here — titled Ending the Narcotic Cycle — focused on new policies that could replace the decades-long global “war on drugs,” a war that many now agree has largely failed.

“Because we’re in Colombia it’s really symbolic” that WEF kicked-off its conference with a session on illegal drugs, as session leader Ilona Szabo de Carvalho, executive director of Brazil-based Igarape Institute, explained here.

But unlike past “war on drugs” discussions at countless conferences, new, “smarter” policies and legislations are emerging in dozens of countries, Szabo noted here.

This policy shift – recently debated by the United Nations General Assembly “Special Session on Drugs” – would if more widely adopted decriminalize personal drug use and instead switch to broader education, addiction treatment, prevention and (at least in some cases) more tightly-regulated production and distribution — while maintaining a fight against violent drug mafias and especially their money-laundering operations, according to Szabo.

“Criminals today regulate drugs,” she said. “You can buy them anywhere and at any age. We have a free-for-all market in the hands of the wrong people,” while at the same time countries including the U.S. and Brazil have vastly overpopulated prisons filled in large part by petty drug criminals, she added.

As for methods to reduce drug addiction, “it’s better to see a doctor than a policeman,” she concluded.

3. New energy trends: Franceso Starace, CEO of Italy-based Enel — one of Colombia’s biggest electric-power producers and distributors – kicked-off a separate panel discussion here titled Transforming Latin America’s Energy Landscape.

Enel has 3.4 gigawatts (GW) of installed power capacity in Colombia through its “Emgesa” subsidiary, which operates 10 hydro-power plants and two thermal power plants. Enel also operates the local “Codensa” utility subsidiary, which distributes and sells electricity in Bogota and 102 other municipalities, serving 2.9 million Colombian customers.

Because operators of long-distance transmission lines (which connect remote central power stations to cities) are “slow to adapt to technology changes,” and because citizens increasingly object to new, large-scale power-plant and transmission-line projects, that means power distribution and utility companies “need to digitize distribution” in order to fill “the inevitable space left by transmission companies,” Starace said.

“Look at legacy [electric power] infrastructure and what can be changed to fit the new world,” he said. “Some of it must be left to die. That’s a difficult decision by companies.

“Decentralization of energy production is going to happen anyway. Digitization is required for decentralized energy production. This is a trend that will continue,” Starace concluded.

4. “Peace” pact to spur more Colombian investment: In a plenary session here, Colombian President Juan Manuel Santos bragged that Colombia’s gross domestic product (GDP) year-on-year consistently continues to grow, even despite the recent collapse in oil and commodity prices, which cut Colombian net FDI and simultaneously pinched government royalties and tax revenues.

Meanwhile, the “peace” talks between the Colombian government and the Fuerzas Armadas Revolucionarias de Colombia (FARC) guerrillas are nearly complete, he said. The resulting “peace” deal would boost Colombia’s economic growth even more, especially in rural areas that suffer the most from the drug-trafficking-fed guerrilla war, Santos said.

Only 13.5% of Colombia’s eligible voters would need to vote “yes” on the upcoming plebiscite on the “peace” deal, he said. But if the “no” vote prevails, then “we go back to war,” Santos warned.

Asked whether subsequent negotiations for an improved “peace” deal could result if the “no” vote prevails in the plebiscite, Santos stated that “we have information that [the FARC] are preparing to return to war, to an urban war in the cities,” which could be even more bloody than the 50-years-long rural war that has resulted in some 8 million Colombians displaced and tens of thousands murdered, he said.

However, this claim drew the scorn of former Colombian President Alvaro Uribe, who said that Santos was using the threat of renewed FARC violence in cities as a warning to citizens inclined to vote “no” because they’re skeptical of the terms of the FARC “peace agreement.”

Many Colombians fear that the “peace” agreement will enable FARC leaders to escape any jail time for their tens of thousands of murders, kidnappings, bombings, drug-trafficking schemes, environmental and infrastructure destruction, rapes and massive recruitment of minors into their ranks.

Ironically, one expert on Colombia’s armed conflict — Juan Carlos Ortega – was quoted in local newspaper El Colombiano as saying that if FARC members try to infiltrate Colombia’s cities following a “no” vote in the plebiscite, then they’re likely to be killed by existing mafias and gangs that control big-city drug trafficking and extorsion — the FARC’s two main sources of revenue today.

What’s more, new reports are emerging on growing defections of FARC guerillas to the rival Ejercito de Liberacion Nacional (ELN) guerillas, who are taking-over former FARC-controlled cocaine production areas and extorsion networks.

Hence any “peace” agreement with the FARC merely could result in continuing, business-as-usual violence by rival groups in rural areas, with the only difference being that some FARC leaders will now get seats in the Colombian Congress and in local mayorships — perches from which they’ll be able to offer strengthened political cover for their mafia colleagues, many fear.