In 2023, Colombia experienced a record income of more than $9 billion USD from air transportation of passengers and travel, representing an increase of 22.4% compared to the previous year, according to nation’s central bank.

This figure also reflects a 70% increase compared to the levels recorded in 2020, indicating a notable recovery in the tourism sector following the challenges arising from the pandemic.

The Minister of Commerce, Industry and Tourism, Germán Umaña Mendoza, highlighted that the increase in foreign currency from these exports derived from tourism services “is related to the record arrival of non-resident visitors that we had in 2023. This meant for our economy a greater dynamics of consumption and spending in the sectors associated with tourism, and had a very positive effect on the territories visited.”

According to data from Migración Colombia, the arrival of non-resident visitors increased significantly in 2023, exceeding 5.8 million, which represents a growth of 26.6% compared to the previous year. Of these, non-resident foreigners made up 64.3% of the total, with 3.8 million arrivals, marking an increase of 26.2%.

Colombians residing abroad also played an important role, with 1.5 million arrivals to the country in 2023, representing 26.0% of the total and experiencing an increase of 22% compared to the previous year.

There was also a large increase in the arrival of cruise passengers, reaching a total of 345,285 in 2023 — a massive spike of 106% compared to the previous year. The arrival of non-resident visitors from Venezuela totaled 233,704 travelers, 1% less than the previous year.

“This data underlines the crucial role that international tourism plays in the Colombian economy, both in the generation of foreign currency and in the promotion of economic development and job creation,” said Carmen Caballero, president of ProColombia.

My chums over at Bloomberg reported over the weekend that Ecopetrol is looking for alternative natural gas sources to import. According to the report, by 2025, Colombia will have a 17% deficit versus demand. Purportedly, this is until Ecopetrol builds the supplies from its own offshore fields. And, unfortunately, that comes with few guarantees — and a lot of “possibles” — whenever the company is asked.

The other issue is price. It would make far more sense, setting aside the geopolitical risk, to import very cheap gas from Venezuela, which is also desperate for the revenues. That option, however, at least for 2024, is under threat due to the urgent need for pipeline repairs.

It’s a complicated situation — and one that needs both a short and long-term solution. Opposition politicians have been taking shots at Ecopetrol CEO Ricardo Roa due to the drop in profits, but that has more to do with prices and the Colombian peso than operations, as production in 2023 was at an eight-year high.

In other news, while we have hardly discussed the equity market this year, it has been performing somewhat better of late — although volumes remain worrisome.

What is more concerning, though, is that amid all the celebratory noises related to the Madrid agreement and the resolution of the Gilinski/GEA situation, Nutresa will forthwith disappear from the COLCAP once the tender is complete. This follows on from Grupo Éxito, which after some positive vibes to the contrary has also suffered the same fate following the Grupo Calleja tender auction.

This is nothing new in Colombia. There has been a gradual reduction of listed names over the years with few new issuers.

It also nothing new that most market actors have lost faith in the Bolsa de Valores de Colombia, Asobolsa, and other entities entrusted with the guardianship of the market — as they have no idea what to do about the situation.

Last week, we had the Superfinanciera Colombia criticizing, rightfully, the banking sector for being too conservative in their lending — while they themselves appear to have completely forgotten what it is to approve and support new products for the capital markets.

That is made worse with the ongoing nuam exchange and the merger with Chile and Peru, which is (1) highly distracting, (2) still in the distant future, and (3) comes with no guarantees of success. Hopefully, the term “Emperor’s New Clothes” doesn’t need to be translated into Spanish.

Never miss Rupert’s latest commentary
Follow him now on LinkedIn to see What Jumps Out

Colombian state-controlled oil company Ecopetrol (BVC: ECOPETROL) (NYSE: EC) recently reported year-end 2023 net proven reserves of 1,883 million barrels of oil equivalent (MBPE) and a net profit of 19.1 trillion Colombian pesos on consolidated revenues of 143.1 trillion pesos.

The company’s average reserve life now sits at 7.6 years, with a reserve replacement ratio (RRR) of 48%. Proven developed reserves also grew roughly 4% compared to 2022, which Ecopetrol credits to improved execution capacity.

While citing a difficult climate that saw per-barrel prices of Brent crude drop from an average of $99 USD in 2022 to just $82 USD in 2023, the company highlighted its ability to benefit from global production cuts.

“Ecopetrol’s commercial strategy capitalized on increased demand for our crude oils due to OPEC+ production cuts and limitations in Canadian crude supply,” the company stated its reserves report. “Simultaneously, differentials for our refined products remained strong compared to historical levels, allowing us to leverage the growth in our refinery capacity.

Ecopetrol Reserves & Production

In its statement, Ecopetrol added the following details about its reserves and production: “An organic incorporation of 307 MBPE was achieved in 2023, which represented a 43% increase as compared to the organic incorporation in 2022, mainly as a result of new projects, better forecasts of production fields, increased prospects for enhanced recovery, extensions and discoveries.”

“However, the incorporation of reserves decreased by 188 MBPE, as a result of economic factors such as the fall in the Brent crude oil price and inflationary effects, as well as changes in technical conditions, mainly, water intrusion, in fields such as Ballena, Cupiagua and Recetor. The above resulted in a positive net incorporation of 119 MBPE.”

Ecopetrol also noted that 93 MBPE of the reserves incorporated last year came from “better capacity for execution and implementation of improved recovery expansion projects” in fields including Chichimene, Castilla, and Akacias.

“In addition, fields such as Cano Sur and Rubiales presented positive reserve revisions due to good production performance and new drilling projects to implement in the future,” added Ecopetrol.

Overall, 78% of the proven reserves are liquid reserves with 22% being gas reserves.

Geographically, 89% of proven reserves — which includes all the crude oil, condensate, and natural gas of the company, its affiliates, and subsidiaries — are located in Colombia with the remaining 11% in the United States.

(Photo credit: Ecopetrol)

The underwater works at mega-hydroelectric dam Hidroituango are nearing completion, according to public utility Empresas Públicas de Medellín (EPM).

Officially, EPM recently quantified these works as 86% complete and this has set the stage for the restoration of additional tunnels, two of which were already brought online last year and are now “working optimally,” according to the company.

One tunnel will soon be outfitted with a 100-ton piece of machinery known as a hydromechanical plug that recently arrived from Croatia and will require specialized divers to install some 200 feet underwater. This process is expected to take nearly a month, says EPM.

“We have been working at a very good pace,” said John Maya Salazar, general manager of EPM, in a statement.

The company added that “progress is also being made” on the wider stage two of the project as well as on the plugging of the key right diversion tunnel.

“We have already completed the drilling for the injection of resins that will enable the definitive plugging of this tunnel, approximately in the second half of this year,” said William Giraldo Jiménez, vice president at EPM, in a statement. “The project is progressing satisfactorily, as the year goes on, the work will increase more.”

Photo: Hidroituango hydroelectric dam. (Photo credit: EPM)

The following notice was released by the US Federal Voting Assistance Program (FVAP) to help inform US citizens about how they can vote from overseas. Finance Colombia is re-publishing it here in full as a courtesy to our readers. Please reach out to the agency if you have any questions.

The US Embassy in Bogota’s American Citizens Services Office, in collaboration with J. Scott Wiedmann, director of the Federal Voting Assistance Program (FVAP), are thrilled to extend an invitation to our upcoming Voting Workshop.

Our facilitators will guide you through the process of absentee voting from abroad, equip you with valuable resources, and address any questions you may have.

RSVP using the following link to attend virtually OR in person:

https://forms.office.com/g/azEUTaXxVM

Date: March 15, 2024
Time: 1:00 pm – 3:00 pm
Location: American Colombo Center
Cl. 98 #17-32, Localidad de Chapinero
Bogotá, Colombia

Let’s empower our community to cast their vote, no matter where in the world they may be. We look forward to your active participation in this important initiative.

Send questions to [email protected]

Smartphone shipments in Colombia declined by a shocking 19% in 2023, marking the worst year for the sector in the Andean nation since the pandemic hit in 2020, according to an analysis from market research firm Counterpoint. The fourth quarter figure followed this trend, showing a 18.4 year-over-year drop compared to the final quarter of 2022.

Even market leader Samsung felt the hit, shipping less than half of the volume last year that it moved in 2023. In the fourth quarter, the Korean giant held a 21% market share, per Counterpoint.

Several companies did have good years in Colombia, however.

According to the firm’s report, Apple — a relatively small player in Colombia — gained 200 basis points in Q4 of 2023 compared with the same period in 2022. Motorola jumped by 100 basis points in the quarter, while Several Chinese OEMs — including established local player Xiaomi, Guangdong-bassed giant Oppo, and Huawei offshoot Honor — are also picking up market share in Colombia.

Tina Lu, senior research analyst at Counterpoint., wrote in an analysis that economic factors played a large role in the decline last year.

“Colombia was hit hard by macroeconomic turbulence and its economy grew half of what was expected, with the GDP only 0.6% higher in 2023,” wrote Lu. “On a positive note, inflation closed the year in single digits. However, there are potential upside risks for 2024, like El Nino and the rise in fuel prices.”

These current downturn and difficult market dynamics, however, have not fully disrupted demand.

“Despite the economic struggle,” she added, “demand is slightly resilient as some OEMs continue to increase promotions. Also, the 5G spectrum auction that occurred in December can become a driver for the market as customers want to experience the new technology. Colombia’s 5G penetration currently stands at 11%.”

Counterpoint analyst Andres Silva commented on the performance of several of the largest players, including Samsung, which he says felt a larger hit than anyone else in the low-end segment of the market.

“Consequently, its promotional activities were focused on other devices, like the Galaxy A34 and Galaxy A24, both from the price band just above the low-end segment,” he stated. “Xiaomi doubled its market share to 20% in Q4 driven by a strategy under which its most promoted device in the open market was the Redmi Note 12, while in carriers it was the Redmi 10C.”

Honor, meanwhile, saw a huge 225% spike, year-over-year, largely by focusing on marketing its smartphones through the “sponsorship of events where the attendees are younger and more tech-savvy,” he added. Overall, Honor’s 7% market share placed it fourth among brands in the fourth quarter..

This article, written by Douwe den Held, was originally published by InSight Crime, a Medellín-based foundation dedicated to the investigation and analysis of crime and security in Colombia and Latin America.

A Dutch court sentenced drug trafficking pioneer Ridouan Taghi to a lifelong prison sentence. Despite Taghi’s role in creating a global network to import drugs, his conviction will have little effect on the cocaine pipeline into Europe.

Dutch-Moroccan Taghi and two others were convicted on February 27 for five homicides, two attempted homicides, and planning several other murders.

The trial, known as the Marengo process, lasted six years and involved 16 defendants, including Taghi. It was unprecedented in size and duration for the Netherlands. In addition to the three life sentences, another 13 co-conspirators were sentenced to between two and 29 years.

Although Taghi had been on the authorities’ radar for cocaine trafficking for years, the Dutch case focused on a series of murders, part of a wave of violent tit-for-tat killings in the Dutch underworld which started in 2012, when a cocaine shipment did not arrive in the port of Antwerp.

The five killings covered in the trial took place in 2015 and 2016 throughout the Netherlands. Taghi ordered the murders of Ronald Bakker and Samuel Erraghib because he believed they had been passing information to the authorities. One victim, Ranko Scekic, had formerly worked as a hitman for Taghi and was killed after becoming a witness against him.

The journalist Martin Kok, who had a criminal past, was killed for writing about Taghi, using his criminal sources for insider information. The fifth victim, Hakim Changachi, was killed accidentally when Taghi’s assassins got the wrong target. This last murder pushed Nabil B., one of Taghi’s associates, to testify against him in exchange for a reduced sentence.

In response, Taghi allegedly ordered three more homicides after the Marengo trial had started. These attacks on civilians with no criminal ties shocked the normally tranquil Netherlands. Nabil B.’s brother Redouan was killed on  March 29, 2018 in his office in Amsterdam. A year-and-a-half later, on September 18, 2019, hitmen killed Nabil B.’s lawyer Derk Wiersum. On July 6, 2021, Peter R. de Vries, a famous journalist and confidant of Nabil B. in the Marengo trial was shot after leaving a TV studio in Amsterdam. He died days later.

These three murders are being tried in separate ongoing cases.

InSight Crime Analysis

Despite the sentencing of Taghi and several of his top associates, the cocaine trafficking infrastructure that he created remains, and the cocaine trade in Europe continues to grow.

Taghi began his criminal career by selling hashish on the street, quickly graduating to importing the drug wholesale from Morocco. His hashish smuggling business turned into a drug trafficking empire after he switched to trafficking cocaine around 2008.

In the 15 years that followed, cocaine trafficking to Europe via the Netherlands boomed, as the country became one of the main distribution points for the rest of the continent.

In his heyday, Taghi and his associates imported an estimated third of all the cocaine entering the Netherlands each year — about 33 tons — via the port of Rotterdam, according to police documents accessed by the Dutch Newspaper Algemeen Dagblad in 2019.

Seizures in the Netherlands skyrocketed from around 10 tons of cocaine a year between 2008 and 2010 to 60 tons in 2023. In the same period, coca cultivation in South America increased, while in the Netherlands the retail price remained fairly stable, and cocaine purity and consumption increased.

Partnerships were key to Taghi’s success.

“We live in a globalized world … It is almost impossible to run [organized crime operations] within an ethnic group because you play on a transnational field” Yarin Eski, criminologist and associate professor in Public Administration at the Vrije Universiteit Amsterdam said.

On the distribution side, Taghi partnered with some of Europe’s biggest traffickers, including the Italian Camorra mafia and the Irish Kinahan crime group. Together, they formed a network, often referred to as a “supercartel,” that benefited from the contacts of each associate.

“The Netherlands as a location is important, but it’s not so much Dutch groups or Belgian groups,” Thomas Pietschmann, research officer at the United Nations Office on Drugs and Crime (UNODC) told InSight Crime. “There are a lot of other groups who just use the territory and infrastructure of these two countries.”

Taghi also had strong connections on the supply side. His second-in-command, Said Razzouki, who was also convicted to a life sentence, lived in the outskirts of Medellín, Colombia for years. There, Razzouki organized the export of cocaine to Europe. He allegedly bought cocaine from the Gaitanistas (Autodefensas Gaitanistas de Colombia – AGC). Colombian authorities arrested Razzouki in 2020 and extradited him the following year.

Several other members of Taghi’s network were arrested in Latin America and the Caribbean and Suriname, including the alleged number three, Mao Romo, who was also convicted to life for the murders in the Marengo trial.

But the infrastructure that Taghi helped create has continued to import cocaine in greater quantities even after the arrests and convictions of Taghi and others in his organization.

“What really has been the most important trend in Europe over the last few years was the massive increase in cocaine,” Pietschmann said.

This article, written by Douwe den Held, was originally published by InSight Crime, a Medellín-based foundation dedicated to the investigation and analysis of crime and security in Colombia and Latin America.

United Airlines announced this week that it will begin servicing Medellín with a direct flight to Houston as part of a wider expansion that includes several new global routes and an increase in frequency for some existing flights.

While this will be the US carrier’s first flight from Medellín to the United States, it already operates a daily flight from Bogotá to both Houston and Newark.

United Airlines has not revealed when the Medellín-to-Houston flight will begin operating, noting only that tickets “will be available later this year.”

The increased connectivity for Medellín comes as part of a global rollout of new flights, with the airline also announcing new routes from Newark to Marrakesh (Morocco) and Tokyo to Narita-Cebu (Philippines).

Along similar lines, and without mentioning specifics, United added that it plans to increase frequencies to Hong Kong, Seoul (South Korea), and Porto (Portugal), while adding four weekly flights from Los Angeles to Shanghai “as the Chinese and U.S. governments recently agreed to increase flights between the two countries.”

“We have consistently been ahead of the curve in finding hidden-gem destinations for our customers to explore and remain committed to providing the most unique slate of travel options for their adventures abroad,” said Patrick Quayle, senior vice president at United. He added that this expansion is part of its push to serve “customers looking for experiences they can’t have with any other carrier.”

(Photo credit: United Airlines)

Last night, the National Administrative Department of Statistics (DANE) published CPI data for February and revealed a year-over-year inflation rate of 7.74%, which once again reflected a decline in inflation (from 8.25% in January) — and was almost bang in line with the 7.73% expected in the latest survey from Fedesarrollo. That makes 11 months of decline. The PPI number saw a significant decline of 5.38% in the same month.

Photo: Leonardo Villar, governor of Banco de la República. (Photo credit: Banco de la República)

The month-over-month increase of 1.09% was impacted by education (as is normal in February), which rose by 8.74% and contributed 30% of the monthly rise.

This was equalled only by housing (1.07%), which this time around wasn’t overtly impacted by energy (0.96%) but more so by increasing rental prices and the cost of water. El Niño, this time, has been making an impact differently. Food (1.13%) and transport (0.86%) in the meantime had only a modest impact.

Overall, these result leave one big question. What will Banco de la República head Leonardo Villar and the rest of the Magnificent Seven do at their next meeting?

Logic dictates that they won’t cut overnight rates by the 1.00% (down to 11.75%) that Finance Minister Ricardo Bonilla has called for. The finance minister is not alone, as much of the private sector has been calling for the same cut.

Despite these calls, the committee is habitually chasing the curve and will likely opt for a more modest rate cut.

• The other macro number this week was exports for January, which rose 1.3% and totaled $3.74 billion USD. In short, if oil hadn’t risen 15.6% FOB, the number, despite agriculture being positive, would have been negative. There was also a welcome 15.7% rise in total tonnage due to coal, but as prices fell it wasn’t reflected in FOB terms.
• In politics, it was another week to forget, primarily because the politicians did little. We still don’t have an attorney general, as the Supreme Court remains in stalemate. As for the reform process, there has been little to no progress. The speed of budget disbursements was again taking up some column inches this week but there was little substance.

Never miss Rupert’s latest commentary
Follow him now on LinkedIn to see What Jumps Out

Canadian mining company Collective Mining Ltd. (TSX: CNL) recently announced a strategic investment of $18.9 million CAD by an unnamed “strategic investor” that will be used in the exploration of its operations in Colombia and “for general working capital purposes,” according to the company.

The investment comes in the form of the sale of 4.5 million “units” at a price of $4.20 CAD, according to Collective Mining.

In an announcement, the Toronto-based company detailed the definition of a unit in this arrangement as “comprised of one common share of the company and one-half of one common share purchase warrant” that can be converted into a common share at the price of $5.01 CAD at any point in the next three years.

The announced arrangement is subject to normal regulatory approvals.

(Photo credit: Collective Mining)