Antioquia Colombia’s Secretary of Economic Development Talks Regional Growth & Foreign Investment With Me
In March, Daniela Trejo was appointed as the new secretary of economic development for Colombia’s Antioquia department, where Medellín is located. One of the most populated and diverse departments in Colombia, Antioquia reaches from Caribbean coastal plains up into the volcanic mountains of coffee country, deep in Colombia’s interior.
Finance Colombia’s executive editor Loren Moss was able to connect with Trejo to discuss Antioquia’s growth and resiliency during the pandemic, also exploring the role of Colombia’s departmental government (Colombia has departments instead of states or provinces) in investment promotion along with the municipal agencies like ACI Medellín, and the national agencies like ProColombia.
Finance Colombia: I want to ask you about the current status of Antioquia, how are we doing after a year of pandemic? Antioquia has a very diverse economy, obviously there is a lot of activity in the agricultural and industrial area, but it’s also a department that has tourism and events, large events. So my question is, how do you see the entire economic state of Antioquia and in which sectors has it affected the economy the most? But before that I ask you to explain your role and what your responsibilities are in the government, so that people understand what Daniela Trejo is doing in Antioquia.
Daniela Trejo Rojas: First of all, let me introduce myself. I am Daniela Trejo, the new secretary of economic development, innovation and new economies of the department of Antioquia. Previously I had been working as director of internationalization and this brings me new challenges, thinking first of all about employment. Employment is like the pain and the cut off of everything that this secretary does, and it’s to take care of and protect the business fabric, I will tell you a little by way of context, Antioquia is the second largest population conglomerate and economy of Colombia.
Here we speak very well of businesspeople and others. Whenever we talk about Antioquia one thinks of Medellín and then in Valle de Aburrá (Aburrá Valley, where Medellín is situated). In Valle de Aburrá there are 10 municipalities that make it up, but in the department, there are 125 municipalities. We are the department of Antioquia and of those 125 in Medellín and in the Aburra Valley, in these 10 municipalities we have very important companies such as Familia, Grupo Argos, Grupo Éxito, Grupo BIOS, Bancolombia, Suramericana, which are the large holding companies of Colombia, which are in the stock market and that for us they are all a source of pride because they represent that business fabric and that productive specialization of the department.
It’s convenient to tell you that COVID hit us very hard. Last year we closed with a loss of approximately 130,000 jobs. The main economy of Antioquia is in the services sector, in the commerce sector, of course they were very affected sectors and that was largely due to those strict closures that we had in the first three months of the pandemic, where we doubled the unemployment we had, in December of last year we had a recovery of 150,000 jobs and we closed the year with a loss of 130,000. This year we have that goal, and it’s to recover 100,000 jobs, but that is not a goal for the department of Antioquia alone, it’s a goal that we have with other sectors such as construction, services and manufacturing, and merchants. We know that we have to come together to move the department forward.
Regarding the context for those who haven’t traveled and for those who don’t know either Colombia or Antioquia, we are divided into 9 subregions. In those 9 subregions we have the Aburra Valley, and here we have a whole ecosystem of innovation, for us this is a source of pride. We have Ruta-N and we have many entrepreneurs and enterprises that are publishing everything; creative industries and business ventures, technology and added value, but we have other subregions, all very different with a diversity of climates, with a diversity of soils, and that has allowed us to specialize. If we go north, we find ourselves in Urabá where we have access to the sea. In Urabá we have an important logistical location for the tertiary economy and from there 40% of the bananas and plantains that the country exports go out.
But if we go down a little bit, we get to the southwest where the specialties are coffees and citrus fruits. Today we are finding very specialized markets in Europe & Asia for our coffees, not only exporting them as commodity coffees, green coffee but already specialized coffees. We have a region in the North where dairy and textiles are also very significant. We have of course historical knowledge in mining, especially the Mid-Magdalena region and there we already have foreign companies that are in the exploration stage.
We have eastern Antioquia where our José María Córdova international airport is located, there we also find very diverse soil and we are promoting all the exploration in medicinal Cannabis, but also the Hass avocado, passionflower, mango, vegetables. This is how our territory is made up, we also have a sub-region that I forgot, the Occident of Antioquia. From the Occident of Antioquia, we have very agricultural locations and we also have a mining presence so we think of it as an important logistics corridor for the development that we are going to have in Urabá.
That is a context for you to understand that Antioquia has a multiplicity of soils and territories, however, what contributes the most to the Antioquia team is trade, manufacturing and construction, those are the factors that contribute the most and that were most affected in the pandemic.
Finance Colombia: Well speaking of the Occident of Antioquia, they are building the 4G highway projects and they are also building the Antioquia port. When do you plan to finish all this? If I understand correctly, you are going to start making a 4 lane highway from Las Palmas to El Tablazo, near the José Maria Cordova international airport (serving Medellín), a project that will be carried out for 36 months under construction by the firm Conconcreto. I remember 6 years ago when Rionegro was a rural town, and Rionegro is a suburb now, as Envigado was before. It’s how Las Palmas was 10 years ago, it’s already Rionegro, they are expanding the roads into double lanes each way, and I imagine that La Ceja and El Carmen de Viboral will be the next. But speaking of that, with so much growth, when do you think the 4G projects and the port of Antioquia will be finished? How is that going? And what changes do you hope these development projects will bring to the regional economy?
Daniela Trejo Rojas: We have a series of infrastructure projects, some more representative than others, of course betting on the regions where we see that there is significant potential. The Department of Antioquia is very focused on Urabá trying to strengthen the port that we already have there. These are projects that are medium-term, but committing to a special date is difficult because each of the projects has a trajectory and has a dynamic, but we hope in three years to be able to have the roads and also the port developments in Urabá, that will allow us to have competitive advantages between Antioquia and other departments, we will be much closer as a port than other departments that have a large flow of merchandise and that today they are leaving through Barranquilla, they are leaving through Cartagena and that they will be able to pass through Antioquia and have to close all the commercialization there.
So for us that also implies changing the locations of the soil a bit, going from having almost concentrated the spirit of Urabá in the production and commercialization of plantain, banana, pineapple and passion fruit, also moving to products transformed with high added value that also induce us to compete with other markets, but you know that port developments also bring social and cultural impact.
You were asking me about the Orient of Antioquia around Llanogrande: the San Nicolás Valley implies a challenge and immense potential for us. Today we can say that they are two valleys that are connected, it’s even very difficult to determine when Envigado ends and when I am in La Ceja, or when Envigado ends and I am already in Rionegro through the same infrastructure. Before it was very easy because you could notice the change in the roads and lighting, and today you go from Rionegro to La Ceja and find more dynamic restaurants, hotels and others, so we can say that they are two valleys that are completely established, and that has also allowed us to have developments such as the Orient of Antioquia Tunnel that connects us easily between the two valleys, and allows us to have more interaction and that is finally competitiveness for the department, that I can land in Rionegro and in 15 minutes I can be in Medellín, that increases the competitiveness that we have as a territory. After this year of pandemic, we saw that people are leaving Medellín to live in the Orient of Antioquia, people are located in Llanogrande, in La Ceja, in El Carmen, in El Retiro and there is a real estate pressure that for the mayors has been a bit complex to handle. People are already migrating to the Orient of Antioquia, to the entire San Nicolás Valley and this also brings to mind some adversities in infrastructure and waste collection, and all the solid waste management is very important.
Also in the same ecosystem, we forget that there are territories that don’t have very good networks of public services, that don’t have good drinking water networks, we still find many of those municipalities that their villages have aqueducts that have been built by the communities themselves and that they themselves administer. Today that means that we are arriving there with demands that the territory is not very prepared to handle. It’s important not only with roads, in the Orient of Antioquia we from the department have an important position especially in Rionegro, we also have the decentralization of innovation centers where we are talking with the Orient of Antioquia’s chamber of commerce, where we are talking with businessmen from the Orient of Antioquia and we have a special project that is the Orient of Antioquia’s airport city, thinking towards the future and taking advantage of the free zone that we already have there.
In the future we are going to start building the second most important complex in Colombia, today El Dorado (Bogotá’s international airport) is not enough, it’s the Bogotá airport, today it doesn’t provide for the maintenance, spare parts and others of its aircraft, and we are understanding that the transport and logistics sector is leaving to migrate to eastern Antioquia, that implies that we have to help young people think about the areas in which they want to work, what kind of professions and trades we need to promote in the Orient of Antioquia because if the demand reaches us and we don’t have someone to fill it, it would be a problem, but that cannot be solved overnight, that has to be with enough time, so that is why we are preparing. But if we envision where the urban growth is and the economic development of the department, surely the answer is: towards the Orient of Antioquia and towards Urabá.
Finance Colombia: Yes, I was at an event with the mayor of Medellín and the president of Viva Air and they announced that they are going to name Rionegro as the hub and their vision is that they have about 20 planes already in the factory being built, and it’s funny because like when they already have 20 planes on order, and they say their long-term vision is to connect—basically they are doing what COPA (Copa Airlines) did with Tocumen in Panama, that’s what they want to do with Medellín, and connect, in the words of the president of Viva Air, from Buenos Aires to New York all with connectivity in Medellín. I imagine that they are going to have to build or expand the airport again, they just finished renovating the José María Córdova airport, but I imagine they will have to expand it more, I also hear about making a second runway. I don’t see where; I imagine they know how to do that.
What can you tell me? Because I have also heard rumors of making more airports, for example in the Occident of Antioquia, since Santa Fe de Antioquia is a very touristy area, at least they are expanding the highway, but beyond Santa Fe and San Jerónimo, there is also a lot of activity in Buriticá, with 4G highways that are already under construction, are there current plans? I understand that you are not Secretary of Transportation but if there is something you can tell me about plans to expand the roads?
Daniela Trejo Rojas: Answering you very precisely if we are now promoting developments other than our José María Córdova international airport? No, we have to go step by step, the Orient of Antioquia still has a lot of capacity, since we don’t have overcrowding. The demand that the airport has, we have where to grow, and we are also betting that free zones are a tool for economic development. They can bring foreign direct investment, we don’t see that we still have to bet on airport issues in another region other than the Orient of Antioquia so that it becomes very strong, but speaking of competitiveness, we have all the rehabilitation of the railway system, which is a nice project that is led by the department through the Antioquia railway.
Where many of the sections of the Antioquia railway will be rehabilitated, which was liquidated in 1956 and some sections were left without use, absolutely without use. Today we see all the potential for them to be rehabilitated, many of these sections are in feasibility, others are in pre-feasibility, and in particular there is one that I want to tell you about, which is the one that goes from Barbosa to Puerto Berrio, all of the Rio Magdalena to Medellín.
In that section, today there is a national government plan to rehabilitate the navigability of the Magdalena River, this river is one of the arteries of the country, it crosses all the states, including Antioquia, and in Puerto Berrio there are plans to have a multimodal port that we allow the loading and unloading of maritime merchandise and connect it with the railway section between Barbosa & Puerto Berrio, especially we have the garbage ecosystem, almost all the waste and garbage collection of the Aburra Valley goes to this side of the department of Antioquia, and in the garbage we see a potential for a circular economy and green business.
We think this section of the railway in one day can transport people and in others, for example at night, it can transport garbage, but it’s not only transportation but also to achieve that garbage to complete a cycle, that we call green business and circular economy, and that we can see value in the management of that garbage. It’s a project that today is ahead of schedule in its completion, since last year the feasibility of the project was verified and it’s a work that we hope has already been very viable in that administration. We also have other sections that are being rehabilitated, among that we have the section of the “Tren del Rio,” it’s expected that we will have the railway crossing the Aburra Valley, that project is also in pre-feasibility, and there is a section that goes to Urabá, inclusive. This is the section that is more in its infancy, but it’s expected that we will achieve rail connectivity throughout the entire department. Previously we had it, 60 years ago we had it and today we see the potential of having a multimodal plate, also of lowering the load a little off our roads so that they are more efficient, and that we can also take advantage of the Magdalena River and be able to have loading and unloading of multimodal merchandise in this important area in Puerto del Rio.
I don’t know if you knew that in the 1920s all merchandise taken out from Antioquia was by mule, they had 1 or 2 days of travel crossing mountains to go down to the middle Magdalena (river) and arrive especially at Cisneros, in Cisneros the order was made and the Magdalena was crossed until reaching Puerto Berrio, and in Puerto Berrio the merchandise left to Barranquilla. In Barranquilla there were all the ships with international destinations, including those that were leaving Antioquia and if they wanted to go to Europe they had to go to New York and from New York on to Europe.
That is to say that ancestrally there were already some roads, this is very beautiful, in its time Puerto del Rio was a point of arrival for artists, for tourism it’s spectacular. You started the conversation with tourism and I have not mentioned much about that, and we have some municipalities with a history, still with that railway and with those spectacular railway stations, preserved, with still very light infrastructures that have allowed nature to be preserved. Today ecotourism is important in Antioquia, bird watching and being able to enjoy nature today is one of the great bets we have in the department This is especially speaking of infrastructure other than road and airport infrastructure.
Finance Colombia: Yes, that is something I remember my first time in Colombia almost 20 years ago, that was something very curious for me, that there are no trains. One thing that impacts me, still the case but much better now, is that Colombia has always been very regional, as you mentioned there was no transportation to go to Bogotá or Medellín before modern times. I talked to the president of Tecnoglass and he commented on how expensive it is to transport materials within Colombia, due to lack of infrastructure. They are in Barranquilla because that is where the port is, they export a lot of merchandise. Colombia now is changing a lot, before it was not a great force in exporting, perhaps a little coffee, and before, textiles, so that seems great to me, mainly because of the industry that can grow by having railways but also for example in the tourism sector.
In Bogotá I took the tourist train to go from Bogotá to Cajicá and Zipaquirá, in this case it would be longer distances. I imagine it is like taking a train from here to Puerto Berrio, but you are there near Hacienda Napoles and so many things of nature that can be seen, right? I find it very interesting that the railway system can be used not only to transport people and make more connectivity not only with the Magdalena River, but there can also be access to Bogotá and that tourist part of western Antioquia, far west near the Magdalena River, and also connecting with Santander and towards Bucaramanga and those areas because they also connect with the Magdalena River.
Speaking of which, because you mentioned Urabá, are there tax incentives? I know that here we have the free zone, here nearby if I understand correctly there are three free zones in Antioquia, but what incentives are there? Because in Urabá we are already going to have the port, but that area has been an area to some extent forgotten, that is to say, much development is lacking, there is still opportunity and we cannot complain about what happened in history, but currently there is a lot of development that is missing. Are there incentives to encourage or promote investment and development in the north of Antioquia? Speaking more specifically after the mountains, speaking of the coastal plain there in Urabá.
Daniela Trejo Rojas: Well I’ll tell you, we have a particularity as a department and that is that after the signing of the peace process, the national government came up with a strategy called ZOMAC and PDET regions that consists of those municipalities and the most affected areas by the armed conflict and where for more than 10 years we have been investing in changing the productive vocation of the soil, trying to replace illicit crops. Especially in Antioquia we have done it with coffee and cocoa, but also with other projects, fish farming and beekeeping projects.
We in Antioquia have a corridor where we have four subregions where we can find 55 ZOMAC, areas that were declared the most affected by the armed conflict, and 24 PDET municipalities, that in other words is a strategy where the government says what we can do with these territories, How can I change the productive vocation to encourage the establishment of local and foreign companies so that we can generate the different dynamics of the economy, promote development in another way, and this is often not so easy. It is not easy to simply make a refund, but who am I selling to? How do I trade? How do I inject technology and innovation into it? Sometimes very complex and important investments are required. We have those municipalities in Antioquia, we have four sub-regions, among them is Urabá that we have mentioned so much, we also have municipalities in the north, in the northeast and in Bajo Cauca, almost all the municipalities or areas that are there as most affected are in those four subregions that if you see them on the map, it is as if they formed a corridor that weaves through Urabá.
This interview was first published in Finance Colombia
There the national government through its agency for the renewal of the territory implements the PDET strategy along with tax incentives, that is: “how do I make a businessman decide to invest in Mutatá, in Caucasia, in Vegachí, in El Bagre,” and not in the Orient of Antioquia where the port, where the free zones are located? So special tax incentives are created both in income tax and in industry and commerce. We also have slightly lighter incentives where entrepreneurs get a very important discount. I am going to tell you about some municipalities: Caucasia, Tarazá, Puerto Nare, Puerto Berrio, Támesis, Vegachí, Santa Fe de Antioquia are municipalities that have very good tax incentives, they are ZOMAC, and they are a little more distributed throughout the territory. The PDETs are concentrated in this corridor that runs from the northeast, Bajo Cauca and that ends in Urabá. There we have proper incentives in industry with trade discounts, notices and boards, and we have three permanent free zones, we have one in Apartado, Urabá, we have one in the Orient of Antioquia in Rionegro, and we have one in Caldas, in the Aburra Valley (north of Medellín) These are the strips, for us they are the poles of development and commercial exchange where businesspeople have some discounts, where they have tax extensions to bring inputs and to export. Those free zones still have a lot of potential. We see that entrepreneurs are a bit fearful, but it has become a hub for the development of suppliers where within the free zone where, for example, as a businessperson I occupy the textile space, I can find someone who brings me the fabrics, who brings me the threads, all the spare parts for the machines and that way I can export and import more easily and obviously benefit from important incentives.
Today we are looking to have more expansion of these zones, so they don’t remain only in the special areas. We also seek to have special free zones…today for example in Guarné they already have their free zone, companies are already seeking to participate, and the legislation is new, “fresh from the oven.” We spent more than six months reviewing it, sending comments to the ministry, and they shared it just 15 days ago. It’s just published, it is a strategy of the national government to be able to attract investments directly so that they can install themselves in those territories and see that for many years they will have significant discounts in sales, commerce, notices and boards, among others.
Now that you mentioned the textile sector, we in Antioquia historically have an important vocation in the textile area. In the 60s we had the largest companies in the Aburra Valley installed in Itagüí and in Medellín, today we see that it is a sector that continues to grow, and which has been growing by 2.4% a year. Today it represents around 18,000 companies and 117,000 jobs generated. This is according to the chamber of commerce (so the statistics are) formal, the legalized business. Outside of this. the number must be doubled (due to the informal economy) but the numbers that I give you are those that we have in the chamber of commerce.
The textile sector continues to have gigantic potential, and we have been promoting it. From the department of Antioquia, we have been betting on it because we know that there is ancestral knowledge that has passed from generation to generation and that moves local economies and especially economies of gender. When we go to the municipalities, we find that those clothing and fashion companies are led by women and this helps us to boost local economies. It’s another sector that I did not make much mention of, but I would not want to let it pass because it is a sector that we have been betting on and that we see that there are export opportunities especially to the United States. That even with the pandemic, a business line was developed of supplies and personal protective equipment. Last year we had four companies within the department that did export, especially masks to the United States, and this is important because it shows the resilience of entrepreneurs to take advantage of the difficulty of a pandemic and turn it into an opportunity to transfer it to their own business production line. So Loren, this is a summary of what we have been doing, of these productive bets, of those large infrastructure projects; not only roads but also railways, ports in Urabá and the job we have in the Orient of Antioquia, Airport city. If you are living in the Orient of Antioquia, you are going to see the transformation that it will have in 5 years. It will be an impressive thing because we know that it is the “second story” of Medellín and the Aburrá Valley. We want to thank you for the space, for opening the space in your agenda that we had postponed many times, thank you for that and that it is not the first and the last time.
Finance Colombia: Yes, of course, one last question and I also want to give you space if there is a subject or a topic that I forgot to ask you, I also want to give you the opportunity to mention if there is any news from the government but my last question is how does the government of Antioquia work and collaborate with other actors in the development of the economy?
Daniela Trejo Rojas: Last year was a very interesting year for us from the department’s perspective because our development plan set goals for this secretariat which were very different from the ones they had been working on before. We have a direction that is the focus on internationalization that it had been focusing its efforts on international cooperation. The United 2020-2023 development plan presents us with three other challenges: The promotion of exports, the attraction of direct foreign investment and the promotion of the territory, which are topics of the focus for what ACI Medellín has been doing and also what the national government does for ProColombia.
This forces us to open our gaze towards the department and understand that when we talk about internationalization it is not only international cooperation but also that export issues are fundamental, to enable, for example, competitive infrastructures. They are fundamental for the internationalization of companies, but also to promote the territory. Who more than we who know the municipalities, who speak with the mayors, can promote the territory and attract investors to settle here? Since last year we began to work hand in hand with ACI and with other organizations, including ProColombia of the national government, the ACI has two foci: the attraction of foreign investment and also international cooperation. They do not work in the export line, although I think they are going to start doing it because we are already seeing that need. They are very focused on Medellín and Valle de Aburra, but the alliance we made last year for the internationalization of the territory put a challenge on us that is to always work with the gaze of both a city and region.
I, as an Antioquian, I tell them: I enjoy all the effort they have made in Medellín to position the city, but it is not a lie that the companies that are in Antioquia today have their production outside the Valley of Aburra. They cooperate, but outside of the Aburra Valley, so there is a connection that is impossible to separate and makes our relationship necessary, since to us as a team and as the manager put us a challenge and that is that we have to do it together, territorial promotion: see what the productive stakes are, that Medellín is not walking on the one hand and I on the other, but that it is a regional & city setting.
Since last year we signed an agreement outside the internationalization alliance, we have been doing it, the work is extremelyhand-in-hand and not only with the city-region but also with the national government through ProColombia because there are many promotion issues where they are the experts, where they have regional alliances in other countries then we know that it is a matter of working together. For you to understand a little, Antioquia has four purposes from our secretary: international operation, attracting investment, promoting the territory and promoting exports. The ACI complements a lot in that purpose and ProColombia helps us with the issue of exports and territorial promotion, that is the job. We even have a table that is the internationalization table where we are with other entities such as ProAntioquia, the chamber of commerce in Medellín for Antioquia, talking about the issues and having a common discourse and narrative that is very important.
Finance Colombia: I think this will be the first meeting between us and to see how we can support you in your missions, Daniela Trejo, thank you very much for your time.
Daniela Trejo Rojas: Many thanks Loren, see you soon.
Images courtesy ACI Medellín