Colombia: Turning over a new leaf

(This article was submitted several months ago, but better late than never. My previous reporting from Colombia, on the situations in Medellín and in the Bajo Cauca region, can be read here and here, respectively. MD)

Colombia: Turning over a new leaf

By Michael Deibert

8 August 2010

Foreign Direct Investment

The exit of president Álvaro Uribe marks a new era for Colombia. Once given a wide berth by investors, security has improved and its capital, Bogotá, is undergoing a revival. Michael Deibert reports.

(Read the original article here)

Amid a warren of alleys where a chaotic jumble of brick and concrete houses springs up on hills that once housed a city garbage dump, Milena Gómez Valencia is quite literally harvesting the fruits of peace.

“I wanted to change and become a new person,” says Ms Valencia, whose new perch behind her computer is hard to square with her former role in the country’s notoriously brutal paramilitaries. “We wanted to leave behind all the fighting, the massacres, the kidnappings.”

Ms Valencia is a former member of the Bloco Centauros wing of the Autodefensas Unidas de Colombia (United Self-Defense Forces of Colombia, or AUC), which demobilised in August 2005. She is now less concerned with the crushing of either of the country’s leftist insurgencies and more concerned with the daily rounds of accounts billable and payable with which she and half a dozen former fighters try to keep their enterprise, a concern that sells fruit pulp to restaurants and other businesses around Medellín, afloat.

The business, Aso Pulpaz (short for Asociación Pulpaz, a play on the Spanish words for both ‘pulp’ and ‘peace’), was founded with the aid of a government grant, and is emblematic of the complex legacy bequeathed to the country by president Álvaro Uribe, who left office this year after eight years as the country’s premier. Juan Manuel Santos, a former defence minister in Mr Uribe’s cabinet and his preferred successor, captured nearly 70% of the record 9 million votes cast in elections in June.

“Colombia has been able to cross the threshold of being perceived as a place where you would never, ever visit, to being a place where people think about going to Cartagena or [Colombia’s capital] Bogotá or any number of places,” says Alberto Bernal, head of research with Bulltick Capital Markets, a financial services firm specialising in Latin America. “And I think that’s a very important development.”

Past terrors

When Mr Uribe took office eight years ago, Colombia was a country where all but the most hearty or cynical investors feared to tread. Army barracks were regularly overrun by guerillas closely linked to the drugs trade and large swaths of territory were beyond state control.

As he prepares to leave office, the insurgents have peen pushed out to remote areas along Colombia’s borders, Colombian security forces have benefited immensely from a slew of US-led training and financing measures known as Plan Colombia (originally proposed by Mr Uribe’s predecessor, Andrés Pastrana) and Colombia is on the radar in terms of foreign investment – for the first time in many decades.

Medellín, a city of 2.5 million people that has alternately been famous as the hometown of the world’s most notorious drug trafficker (Pablo Escobar) and Colombia’s most famous painter (Fernando Botero), is perhaps the most telling paradigm of Colombia’s complicated renaissance.

The capital of the state of the department of Antioquia, Medellín now bustles with activity under a perpetually spring-like climate, an economic hub and gateway to some of Colombia’s most scenic regions.

“The most important improvement in recent years has been security,” Luis Alfredo Ramos, Antioquia’s governor, told fDi while sitting in an office overlooking some of Medellín’s modern architecture and shadowed by life-sized portraits of the two great leaders of the nation’s rebellion against Spain, Simón Bolívar and Francisco de Paula Santander.

“For example, it is now easy to transit the road to Bogotá, whereas for many years it was closed. There were kidnappings, acts of terrorism, explosions...Now more than 70,000 people have returned to this region,” says Mr Ramos.

Some 250 kilometres away, Bogotá is also enjoying a rebirth, the benefit of a series of mayors of different political stripes who built on one another’s accomplishments in improving the country’s most important city.

Locals credit Jaime Castro (mayor between 1992 and 1994) with developing a political charter for Bogotá and reforming its tax base, Antanas Mockus (mayor from 1995 to 1996 and 2001 to 2003) with helping to create a sense of citizenship, Enrique Peñalosa (1998 to 2001) with strengthening the city’s infrastructure, public spaces and educational system, and Luis Eduardo Garzón (2004 to 2007) with extending public programmes to help Bogotá’s neediest citizens.

“The change in response by the companies we’re approaching is dramatic,” says Virgilio Barco, executive director of Invest in Bogotá, a four-year-old public-private partnership established by the city and the Bogotá Chamber of Commerce. “In 2006 we were having a lot of problems getting any traction at all, and last year we were talking to mainstream, very conservative companies which felt that security was no longer an issue.”

Economic figures from the Banco de la República, Colombia’s central bank, in May, bear out this sense of optimism. The Colombian economy was expected to have grown from 2.3% to 3.1% during the first quarter of 2010, a small increase from the same quarter in 2009, and leading to an overall projected growth rate in 2010 of between 3% and 3.5%. Also in May, Moody’s Investors Service announced that it was upgrading Colombia’s rating for its 2011 notes from Ba2 to Aaa. In Bogotá alone, FDI has grown from $87m in 2000 to $1.7bn for 2009, the largest chunk of it in the transportation sector and with the largest single investor in the city remaining the US, followed by Spain.

Drug problems

Colombia still has significant hurdles to negotiate. A series of vicious new drug gangs, many with links to the former paramilitary groups, continue to wage brutal turf wars in various locations around the country, and the country’s two rebel armies, while knocked back on their heels, remain heavily armed and well-financed by enormous sums of money derived from the drugs trade. A series of political scandals of close allies somewhat tarnished Mr Uribe’s reputation, and there is a sense that, despite the forward movement, more must be done to address the country’s extreme inequality.

“It is very difficult here, everyone is looking for work,” says Rosa Palacio, a 28-year-old mother of two in Soacha, a grindingly poor suburban municipality of about 400,000 on Bogotá’s southern edge.

Amid improvised dwellings scaling steep hills that can be reached only by dirt roads, many refugees such as Ms Palacio from Colombia’s armed conflict remain in limbo, fearful of returning home but not entirely settled in their new lives either. Nevertheless, after so many years of war, Colombians could be forgiven for looking towards the future with a sense of guarded optimism.

In Medellín, as Ms Valencia talks with the staff of Aso Pulpaz as they commence their work for the day, she recalls the story of one of the organisation’s founders, another exparamilitary member who was killed “by delinquents” she says, in Medellín a little over a year ago.

“The dead go to their graves,” she says, using a familiar Spanish expression about soldiering on through tough circumstances. “But the living must get back to the dance floor.”