Identifier
Created
Classification
Origin
09BOGOTA168
2009-01-21 15:59:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Bogota
Cable title:  

COLOMBIA'S NEW S&T LAW HIGHLIGHTS PUSH FOR

Tags:  ECON TSPL KCIS PGOV EINV CO 
pdf how-to read a cable
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UNCLAS BOGOTA 000168 

SIPDIS
SENSITIVE

OES/STC FOR KDELAK; WHA/EPSC FOR FCOLON

E.O. 12958: N/A
TAGS: ECON TSPL KCIS PGOV EINV CO
SUBJECT: COLOMBIA'S NEW S&T LAW HIGHLIGHTS PUSH FOR
INNOVATION-LED ECONOMIC DEVELOPMENT

UNCLAS BOGOTA 000168

SIPDIS
SENSITIVE

OES/STC FOR KDELAK; WHA/EPSC FOR FCOLON

E.O. 12958: N/A
TAGS: ECON TSPL KCIS PGOV EINV CO
SUBJECT: COLOMBIA'S NEW S&T LAW HIGHLIGHTS PUSH FOR
INNOVATION-LED ECONOMIC DEVELOPMENT


1. (SBU) SUMMARY: In December 2008 the Colombian Congress
approved a Science, Technology and Innovation (STI) Law, with
the intention for STI to become a major driver of Colombian
productivity and long-term economic stability. The law
increases GOC funding available for STI activities and
research, elevates the Colombian Institute for the
Development of Science & Technology (Colciencias) to
quasi-ministerial status, and creates a public-private fund
to ensure sustained STI investment. Local experts note that
present national spending on STI -- 0.47 percent of GDP -- is
not sufficient to promote innovation-led development, and
praise this law's goal of increasing spending to 1 percent of
total GDP by 2010. Local experts cite the lack of incentives
and sustained funding within the present system, as well as
brain drain resulting from historic political instability, as
primary causes for Colombia's lack of STI development. END
SUMMARY.

A New Priority In National Policy
--------------


2. (U) On December 16 the Colombian Senate gave final
approval for a Science, Technology and Innovation (STI) Law,
which reforms the existing law of 1968. According to
Colciencias Director Juan Francisco Miranda, this law
converts STI from a theoretical concept to an explicit
component of the social and economic development of the
country. The GOC will now include STI targets in official
planning documents, and each year Colciencias will have to
submit a national STI policy to Colombia's National Planning
Department (DNP). Miranda characterized the law as an
indication of the GOC priority that Colombia increase its
productive apparatus to move away from illicit activities and
ensure long-term economic stability. Guillermo Perry, a
former Finance Minister and senior analyst at leading
economic think tank Fedesarollo concurred that the law raised
the political salience of STI, explicitly making STI a tool
for addressing Colombia's shortfalls in competitiveness and
production.

Increased National Investment In STI
--------------


3. (U) GOC spending on STI has historically been low. In

2007 national spending was 0.47 percent of GDP, below
neighboring countries such as Argentina, Brazil, Chile and
Venezuela. Miranda said Colombia is behind Latin American
countries in numerous STI indicators -- including research
and development expenditures, number of Ph.D. science
students, and number of patents. The new law hopes to
address these deficits by increasing overall STI expenditures
to 1 percent of overall GDP by 2010. Rather than depend upon
foreign technology, local experts state that Colombia must
begin to develop its own.

Colciencias Bureaucratic Status to Rise
--------------


4. (SBU) One of the main components of the law is the
elevation of Colciencias from an institute within DNP, to an
independent quasi-ministerial body equal to DNP. (NOTE:
These quasi-ministerial bodies, such as DNP or the National
Statistics Department (DANE),are called "departamentos
administrativos" and have essentially the same authority as
cabinet level organizations but are not technically federal
ministries. Local contacts tell us Colciencias was elevated
to an "departamento administrativo" because, under the Uribe
Administration's practice of reducing government bureaucracy,
it is not politically tenable to create new ministries. END
NOTE.) The Director of Colciencias will now participate in
ministerial meetings and have a greater voice in STI policy
formation. Along with augmented status, the budget of
Colciencias will increase to USD 90 million in 2009--a 69
percent increase since 2006.

Investment Fund To Secure STI Resources
--------------


5. (U) The law creates a public fund with initial
capitalization of USD 50 million to secure sustained and
autonomous resources in support of national STI policies.
Colciencias will have oversight of the fund, with a private
investment firm providing direct management. Miranda stated

that presently, the national STI system is inefficient and
difficult to maneuver. Every government entity, be it a
federal, regional or local body, relies upon its own R&D
mechanisms and research. The GOC expects the new fund to
increase STI investment, by providing an efficient, expedient
and centralized use of resources. Likewise, Colciencias will
have the authority to instruct ministries to increase their
fund investment and the President's Office reserves the right
to make contributions mandatory in the future.


6. (SBU) Miranda also noted that private entities can invest
in the fund, recognizing the crucial role of the private
sector in securing future investment. According to Miranda,
less than 40 percent of STI research expenditures presently
come from the private sector, which is not sufficient for
innovation. While the initial USD 50 million contribution to
the fund will come from the National Royalty Fund, a public
source, Colciencias hopes that private investments will
eventually equal or surpass public sector funding.
International bodies, such as the World Bank or the
Inter-American Development Bank, may also invest. This fund
will focus only on STI projects and activities and cannot
legally finance Colciencias administrative costs or any other
public entity.


7. (SBU) Perry cautioned to us, however, that while this
fund does increase STI resources, in the long-term a more
sustainable source of funding will be necessary. To secure
long-term progress in and funding for STI, he stated that
government cannot have direct, everyday control and
supervision over the field. Perry stated that the private
and academic sectors need to have genuine authority and serve
in more than STI advisory positions to the government. Since
future governments, less committed to STI, could simply
eliminate the fund, Perry called for the same independence
and institutionality presently enjoyed by the Central Bank to
be provided STI institutions.

Targeting Academic Goals
--------------


8. (SBU) Representatives from the Ministry of Education and
SENA -- the national technical education system -- have
publicly stressed the need to increase the number of Ph.D.
students, researchers and research centers within Colombia.
They cite Colombia's graduation of less than 100 Ph.D.'s in
2007 as evidence of the lack of prioritization in Colombia on
high level research and academic promotion. Insufficient
research funding and a brain drain caused by historic
political instability are often cited as the primary causes
of this deficit. According to 2006 Ministry of Education
statistics, less than 5 percent of students who received
Ph.D. scholarships remained in Colombia. To address this
phenomenon, the STI law intends to increase the research
opportunities for students and researchers, and sets a target
of increasing new Ph.D. candidates by 500 each year.
Colciencias Director Miranda acknowledged the target as low,
but nonetheless a huge challenge for Colombia.

Tough Road Ahead
--------------


9. (SBU) While Miranda is a leading advocate for the law and
the STI philosophy it entails, he also admitted to us that he
was "completely terrified" of the new responsibilities his
institution must assume. With the same number of personnel
-- the law does not allow for increased hiring due to GOC
attempts to limit bureaucracy -- Colciencias will assume the
added obligations and pressure of a quasi-ministerial body.
While maintaining normal functions, Colciencias will now have
to take the lead on developing national STI policy, manage an
investment fund and convince other involved actors that STI
investment is essential to Colombia's development. Miranda
and other senior officials at Colciencias welcome the
challenge but admit that sustained support from the
President's Office and greater participation by the private
sector are necessary if this initiative is to succeed.
BROWNFIELD