Presentation session 5 colombia's general system of royalty payments

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Mr Javier Villareal, Main Advisor for Royalties Affairs, National Planning Department of Colombia during the Second Meeting of the Policy Dialogue on Natural Resource-based Development, held on 3-4 June 2014 at OECD Headquarters in Paris.

Text of Presentation session 5 colombia's general system of royalty payments

Presentacin de PowerPoint

National Planning Department www.dnp.gov.co

Colombian General Royalties System Opportunities and Challenges Behind the Reform

Javier Antonio Villarreal

Paris. June 3rd, 2014

School- Tumaco

Colombia is the 3rd economy in Latin America

Decentralized country

32 departments, 1.102 municipalities, 13 Metropolitan

areas

Between 2009 and 2013 GDP average growth was 4,1%

Nevertheless regional GDP disparities need policies to

reduce inequity.

While Bogotas participation in national GDP is 24%, Vichadas participation is 1%.

Source: SGR and DNP, 2013

Increasing gaps

17 % of population had

80% of resources

Funds were focused on 8

departments

Earmarked use: health,

education, water and

sanitation

Before 2011 After 2011

100% of population allocated

with resources

Savings and investment funds

Serves all departments

10% of Royalties go to Science,

Technology and Innovation Fund

(U$ 484 million per year)

Non earmarked use of funds

Colombias Royalties System A Territorial Inclusive Policy for Development

SGR is System that democratizes the use of

royalties

Equity

Wealth that arises from natural resources belongs to all Colombians

Regional impact

The system created regions, aiming to provide incentives for regional impact project design and implementation, in order to promote development and competitiveness in the country

Transparency and more efficient use of resources

More coordination between national and local governments, and within regions

Improve public investment planning and resource execution

Savings

For periods when royalties income is lower

To make public expenditure sustainable

To honor obligations on pensions at the regional level

1

2

3

4

Funds Within the SGR

SGR

1,3% SGR Operation 0,7% Monitoring, control and evaluation system of royalties 0,5% Special conditions municipalities

2% Oil fields oversight and mapping

10%

20%

10%

34,5%

6,6%

9,9%

16,5% 9% 60%

10 %

20%

10%

6,6 %

MUNICIPAL

OCAD

TS

Defines the project to be funded by SGR

Assess, evaluates, prioritises and approves

investment projects submitted by

governments (depending on whether its National, Departmental, Municipal or ST&I)

Decides the execution of the projects

If a project is rejected by the OCAD the

Entity (National, Municipal, Departmental,

ST&I) does not lose the royalty funds, but is

able to design a new one.

DEPARTMENTAL REGIONAL SCIENCE TECHNOLOGY &

INNOVATION

Multilevel Governance Within SGR:

OCAD

*TS: Technical Secretariat - *OCAD: Spanish acronyms for a Collegiate Board for Administration and Decision

Ongoing Projects

2640

Completed Projects

774

Capacity-building resources 2013

($US thousands)

$ 106

$ 66

$ 66

$ 26

$ 23

$ 21

$ 18

$ 15

$ 12

$ - $ 50 $ 100 $ 150

ST OCAD regionalesDepartamentos

Corporaciones autnomasMunicipios cat. 6Municipios cat. 5Municipios cat. 4Municipios cat. 3Municipios cat. 2Municipios cat. 1

More than $353K US have been allocated to sub-national

governments capacity building strategy

% projects approved in

OCAD

Direct. Tranf [PORCENTA

JE]

Esp. RCF

40%

RCF [PORCENTA

JE]

RDF [PORCENT

AJE]

ST&I [PORCENT

AJE]

Municipalities Cat.1

Municipalities Cat. 2

Municipalities Cat. 3

Municipalities Cat. 4

Municipalities Cat. 5

Municipalities Cat.6

CAR

Departments

Regions

Municipalities and departments have

strengthened their planning capacity

Transport

$1.8 US Billion

1.594 projects

The SGR invests in different sectors

Science, Technology

and Innovation $0.8 US Billion

204 projects

Education

$0.8 US Billion

568 projects

Environment

$0.2 US Billion

180 projects

Housing

$0.7 US Billion

716 projects

Health

$0.2 US Billion

206 projects

Agriculture

$0.4 US Billion

638 projects

Data report and follow up

online SUIFP

Monitoring system

GESPROY

Citizens follow up

tools MapaRegalas

www.maparegalias.sgr.gov.co

www.sgr.gov.co

Reports for

national,

departmental

and municipal

scale

$ 2

9 U

S

mil

lio

n

Transparency tools are the core of the System

Challenges

1. Closing territorial gaps

2. Institutional strengthening

3. Multilevel governance through OCAD

4. ST&I for competitiveness

5. From a project based system to a

programme-based system

6. Transparency as a cross cutting

strategy to the system

All departments have access to royalties funds

Specialized teams working hand in hand with departments and

municipalities to develop projects:

capacity building

ST&I fund counting on the participation of academia and private

sector

5 multiregional projects

Surveillance, follow up and accountability systems

How is Colombia facing these

challenges?

The SGR is addressing key challenges

in Colombia

javillarreal@dnp.gov.co

Tel. (+57 1) 3815000

Cra 10 N10 55 Piso 19 Bogot - Colombia

Javier Villarreal Villaquirn

www.dnp.gov.co

Thank you