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'Colombia is in the process of implementing a structural spending reform', Colombian Ambassador to the OECD

Luis Fernando Medina says the organization has supported processes such as tax, pension, and labor reforms.

Luis Fernando Medina, Embajador de Colombia ante la Ocde. — Luis Fernando Medina,??Colombian Ambassador to the OECD Foto: Archivo Particular

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Noelia Cig??enza Ria??o

SUBEDITORA 08.07.2025 14:53 Actualizado: 08.07.2025 14:55

Unidad de Reportajes Multimedia

08.07.2025 14:53 Actualizado: 08.07.2025 14:55

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In April 2020, Colombia became the 37th country to join the Organization for Economic Cooperation and Development (OECD), also known as the ???club of good practices.??? Prior to the Local Development Forum that the organization will hold in Barranquilla this week, EL TIEMPO interviewed Colombia's ambassador to the organization, Luis Fernando Medina, who spoke about the benefits of joining, the recommendations and the challenges ahead.

(Lea esta entrevista en espa??ol )

Reuni??n del presidente Gustavo Petro con el Secretario General de la OCDE Mathias Cormann — Meeting between President Gustavo Petro and OECD Secretary-General Mathias Cormann Foto: Ocde

What benefits do you think Colombia has gained from joining the OECD?

Colombia will soon celebrate five years in this organization and the relationship is still being built. There have been many benefits during this time. It is not just about teaching us how to do things, but also about learning from the experiences of other countries, for example, the ability to participate in consensus building. Many ideas are being developed at the OECD on issues such as international cooperation, taxation, development, economic policy, energy transition, and artificial intelligence, and it is important to be present during their gestation. In addition, it has had great technical capacity to support processes such as tax, pension, and labor reform.

And what are the biggest challenges?

It is a long process because it is a large and complex organization. It is not simply a matter of getting the top officials in the ministries involved; all entities need to be involved, which poses logistical challenges. Furthermore, it is difficult and expensive to get to Paris and have a sufficiently large delegation there, so it must be seen as a process of construction and ideas that are very focused on structural issues. Although it is true that it originated in the rich economies of the North Atlantic, more and more countries are joining. At the moment, Brazil, Argentina, Peru, and Indonesia are in the process of joining.

What reforms does the OECD recommend for Colombia?

The OECD has long recommended the creation of a pillar system such as the one created with the pension reform. It has also recommended the consolidation of various labor rights, which is what has just been approved with the labor reform. The organization has long welcomed the fact that these reforms put us somewhat on that path. In addition, it has also spoken of the need to increase the tax burden in our countries, but obviously we are still far from the level that would be needed. Similarly, it has said that developing countries in particular, such as Colombia, are in a slump of low investment, partly due to the inability to collect the taxes to finance it.

Barranquilla hosts OECD-2025 Local Development Forum Foto: Guillo Gonz??lez-Kronos

Unlike other OECD countries, individuals in Colombia pay less income tax, with the bulk falling on companies. Should this change?

The tax authorities have tried to move in that direction, but it has been very difficult to lower the corporate tax rate in order to raise the individual tax rate. In addition, Colombia is overdue for structural reform that addresses not only revenue collection issues, but also spending. For example, moving to program or results-based budgeting to give more flexibility to spending. There is also a lot of discussion about subnational finances. The law on competencies that is being introduced is another area where the OECD has many interesting solutions. We need reforms that are more permanent than those we have had so far, which after two years we realize are insufficient.

The tax reform announced a few weeks ago by Finance Minister Germ??n ??vila seeks to review tax spending, especially VAT. Is it on the right track?

Yes, the OECD has always said that it is very important for tax benefits to be concentrated as efficiently as possible and well targeted, because many incentives are put in place, remain there for decades, and are never evaluated. However, we will have to see the government's specific proposal.

You say that you have welcomed the consolidation of some labor achievements with the latest reform. However, there is still a high level of informality in Colombia. How can this be tackled?

I am not speaking here as the OECD. I believe that one of the things that people may not have understood, which I see clearly, is that informality is not a problem with the labor code, which is there to set the rules of the game between employers and employees. Informality is a by-product of many other structural issues, so it must be tackled on many fronts, by reviving investment, boosting the popular economy, bringing the state closer to informal economies so that they can find their place, and connecting them through the public procurement system.

What other recommendations does the OECD make for Colombia?

For example, in terms of health, the OECD considers that the system has a weakness in the preventive aspect. On the energy transition, the International Energy Agency, which is part of the organization, has been saying that by 2030, oil demand will peak and then gradually decline. Therefore, we will have to think about how to start replacing those sources and foreign exchange. If all goes well, Colombia could become a full member of that agency next year. And in terms of the popular economy, which is an issue that we have been insisting is important to work on, it has pointed out that when the state's public policies reach communities hand in hand with the social and solidarity economy, more trust is generated, which makes policies more effective.

Informalidad laboral — Informal employment, one of the biggest challenges in Latin American countries Foto: Solutions & Payroll

Starting tomorrow, Barranquilla will host the OECD Local Development Forum 2025. What will be discussed?

The forum is organized by the OECD's Center for Entrepreneurship, SMEs, Regions, and Cities and the mayor's office of Barranquilla. It will seek to explore the topic of local development from many angles, including the popular economy, gender issues, the environment, and even culture as a driving force, among others.

NOELIA CIG??ENZA

EL TIEMPO

Editor's note: This text is an artificially intelligent English translation of the original Spanish version, which can be found here . Any comment, please write to [email protected]

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