Colombia’s GDP rose by 0.3% in the fourth quarter, per the National Administrative Department of Statistics (DANE), which was slightly below the 0.4% expectation, and led to a full-year 2023 number of 0.6%. This, again, is lower than the 0.9% that was anticipated by some analysts.

Quarter-over-quarter, the main laggards were construction (-1.6%), commerce (-2.3%), and industrial manufacturing (-4.8%). There was an identical picture on a full-year basis for these sectors, as they dropped in 2023 by 4.2%, 2.8%, and 3.5%, respectively.

To the upside, the finance sector was the highlight ,with a quarter-over-quarter increase of 4.7% and year-over-year jump of 7.9%.

The numbers will be a disappointment — especially as they are so overshadowed by the 2022 reading of 7.3%.

However, they won’t be a shock to anybody.

The global economy has been struggling to shrug off inflation worries for well over a year, with respite only just arriving, and this has led to many central banks maintaining overnight rates at higher-than-ideal levels.

Colombia’s Banco de la República is no exception — and while its stubbornness in reducing rates can hardly be seen as responsible for the fourth quarter performance, the first quarter of 2024 recovery is likely to be modest. And that is in large part due to the committee’s refusal to lower rates until December.

As stated before, if you don’t believe the Ministry of Finance then you need simply listen to ANDI and Asobancaria, just two of the private sector federations that have pointed the finger at Leonardo Villar and the other central bank committee members.

We will see how 2024 develops. But there are some shoots of optimism.

January inflation was lower than expected, and the latest consumer confidence reading from Fedesarrollo was a step in the right direction. On the other hand, Camacol Colombia has also reported that home sales dropped 32.3% for the same month — although December construction licenses rose 28.5% year-over-year and were the highest for that month since 2019. Signals remain mixed overall.

Unfortunately, the central bank will be sitting on their hands this month (due to the upcoming meeting not including a rate decision) when they should be cutting rates by 50 basis points.

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This article, written by María Fernanda Ramírez and Juan Diego Cárdenas, 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.

Rates of deforestation decreased significantly during the last year in Colombia and Brazil, two Amazonian nations that have historically been among the 10 countries with the highest forest loss in the world.

Photo: The Amazon rainforest in Vaupés, Colombia. (Credit: Jared Wade)

Preliminary figures indicate that deforestation in Colombia between January and September decreased 70% compared to the same period in 2022, according to data presented by Susana Muhamad, Minister of Environment and Sustainable Development. In Brazil, deforestation decreased 61% in the first 10 months of 2023 compared to the same period last year, according to data from the Amazon Institute of People and the Environment (Instituto do Homem e Meio Ambiente da Amazônia- Imazon), a climate justice organization.

The protection of the Amazon rainforest was a central topic at multilateral meetings in 2023. In August, leaders from countries that house part of the Amazon — Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela — met for the first time. At this Amazonian summit, representatives from each country pledged to redouble their efforts to protect the rainforest.

Between the decrease in forest loss in Colombia and Brazil and the Amazonian summit, this year represented a small victory in the battle against deforestation in the region. But this success comes amid a worrying regional panorama in which criminal groups are putting down roots in the Amazon and expanding their participation in environmental crimes.

What is Behind the Decrease in Forest Loss in Colombia?

Two factors led to Colombia’s reduced deforestation rates: a change in government policies and the rise of a sort of environmental criminal governance.

Protecting the Amazon is a pillar of President Gustavo Petro’s agenda. Since he took office in August 2022, he has managed to reverse the trend of rising deforestation seen in the first few months of that year. By the end of 2022, according to data from the Institute of Hydrology, Meteorology, and Environmental Studies (Instituto de Hidrología, Meteorología y Estudios Ambientales – Ideam), 123,517 hectares were lost, 29% less than the 174,103 in 2021.

The decrease in deforestation rates that began with his presidency has continued throughout 2023. In just the first four months of this year, deforestation decreased 76% compared to the same period in 2022. Meanwhile, between April and June, Colombia’s Amazon region lost about 850 hectares of forest cover, 66% less than during that time last year.

“This is a promising start, but we have to stay grounded. The change in strategy has been a success, but now the challenge is to keep it going next year,” said Muhamad while presenting the figures.

The decrease in forest loss is, in part, the result of the government’s conservation and community forestry programs, which promote the sustainable use of forest resources.

It is also the result of President Petro centering the environment in his “Total Peace” plan, through which his administration is pursuing peace talks with more than 20 armed groups in the country. This focus on the environment sets a new precedent. In the 2016 peace agreement between the government and the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC), the forest was treated more as a beneficiary, rather than a central pillar of the agreement.

Before the peace agreement, the FARC had long acted as de facto guardians of much of the Amazon, which protected the group against attacks by armed forces. The FARC, which at the time was the largest armed group in the country, was more interested in using the forest to ensure its survival than capitalizing on its natural resources as another source of revenue.

However, after much of the group demobilized in 2016, deforestation ramped up, rising 23% in 2017. In the following years, illegal logging by criminal groups and corrupt actors rose.

Then, in 2022, in anticipation of Petro’s victory, the most powerful ex-FARC mafia group, the Central General Staff (Estado Mayor Central – EMC), one of several dissident factions that did not demobilize with the rebel group after peace negotiations, began protecting the forest in their territories in the northwestern arc of the Amazon. These areas in the departments of Meta, Guaviare, and Caquetá are some of the most highly deforested areas of Colombia.

“Before Petro became president, [the EMC] created a new guide, a new set of rules. They went from being very flexible about logging to saying it had to stop,” Juanita Vélez, a Colombian armed conflict and deforestation expert, told InSight Crime.

With Petro in power, the EMC doubled down on their logging ban, maintaining it throughout 2023. Underlying this protective order is the group’s interest in using it as a point in their favor during peace negotiations with the government.

Curbing the Drivers of Deforestation in Brazil

Like Petro, Brazilian President Luiz Inácio Lula da Silva has made protecting the environment and fighting deforestation one of the pillars of his agenda. Lula’s return to power in 2023 has provided some respite to the Brazilian Amazon, which suffered record levels of destruction under his predecessor, Jair Bolsonaro.

In Bolsonaro’s four years as president, Brazil lost an area of forest larger than the size of Belgium. This level of destruction caused parts of the Amazon to shift from being carbon sinks to carbon emitters.

During his presidency, Bolsonaro promised to develop the Amazon and exploit its natural resources. This extractive agenda laid the foundation for expanding agricultural projects, land trafficking, and illegal logging and mining in the Amazon, all of which have been motors of the rampant deforestation in Brazil.

Bolsonaro also cut personnel and funds from the Brazilian Institute of the Environment and Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis – Ibama), the country’s agency in charge of fighting environmental crimes. The decision severely reduced environmental oversight.

But since Lula took office in January 2023, he has worked to reverse his predecessor’s controversial policies and curb deforestation in the Brazilian Amazon. And he has succeeded.

Between January and October 2023, 380,600 hectares were cut down, a 61% decrease compared to the same period in 2022. According to Imazon, this was the smallest area of forest loss since 2018.

One of the first steps that Lula took in his fight to curb deforestation in Brazil was to rebuild Ibama and give the organization its claws back, empowering it to launch initiatives to protect the forest.

“When the government changed hands, it provided a framework for changing this situation,” said Melina Risso, research director at the Igarapé Institute, an independent think tank located in Brazil that focuses on development, security, and climate issues.

“He came in aiming to slow the destruction in the Amazon. He has imposed fines and seized areas with rampant illegal activity,” she added.

In January, Ibama began a series of operations in the northern states of Pará, Roraima, and Acre to issue fines for illegal logging and deter loggers from cutting trees in new areas.

With the help of the federal police, Ibama agents have also expelled garimpeiros, or people participating in illegal mining, that operate in the Indigenous Yanomami territory on the Brazil-Venezuela border.

Lula has also taken steps to roll back Bolsonaro’s flexible firearms rules that allowed powerful criminal groups to grow stronger during his term.

A Long Road Ahead

There is no question that the decline in deforestation in the Colombian and Brazilian Amazon this year was a small victory in the midst of the current climate crisis. But to truly flatten the curve of deforestation in the Amazon, many challenges remain.

The powerful criminal networks that are deeply rooted throughout the Amazon basin represent one such challenge, as they increasingly pursue environmental crimes as a lucrative income source.

For example, the First Capital Command (Primeiro Comando da Capital – PCC), one of Brazil’s most prominent criminal groups, which dominates drug trafficking in the country, extended its tentacles throughout the Brazilian Amazon’s mining zones in 2023. In the state of Roraima and Yanomami territory, the PCC has provided weapons and heavy machinery to garimpeiros, offered security services to mines, and even helped extract gold from the Amazon.

In other countries in the region, like Peru, drug trafficking networks expanded their influence in the Amazon during 2023, cutting down trees to build clandestine runways and sow coca fields, the raw ingredient used to make cocaine. Environmental and Indigenous leaders who opposed drug traffickers’ incursions into the Amazon have become targets of threats, attacks, and even assassination.

In Colombia, the presence of criminal groups in the Amazon and the EMC’s central role in controlling deforestation rates has left the sustainability of forest protection hanging by a thread.

Another challenge to reducing deforestation in the long run is the need for regional cooperation and sustained political will.

“We have to think about the Amazon from a regional perspective, if not, the effects will be global,” said Risso, from the Igarapé Institute.

The need for such regional cooperation became evident this year when, after Brazil expelled informal miners from Yanomami land, many garimpeiros crossed into Venezuela and Guyana to continue mining. In December, they returned to Yanomami territory and resumed their operations there.

But cooperation between Amazonian countries has so far been limited.

Although Amazonian governments approved a declaration to protect the rainforest during the Amazon summit in August, it does not outline concrete strategies to tackle deforestation.

In fact, the majority of Amazonian countries are far from reducing deforestation in their territories, whether because taking a strong stance is not a top political priority or it goes against their interests.

In Venezuela, for example, gold mining continues to be one of the main revenue sources for Nicolás Maduro’s government. In Peru, ongoing political instability has pushed addressing environmental crime to the bottom of the government’s list of priorities. While in Bolivia, lax regulations on importing mercury, which is used to separate gold from sediment, has increased contraband flows of this toxic metal throughout the Amazon region.

This article, written by María Fernanda Ramírez and Juan Diego Cárdenas, 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.

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Although work occurring throughout the city is noticeable to anyone visiting the Colombian capital, the Bogotá metro is so far a long story about something that only exists in the imagination.

A construction site for the Bogota Metro on Calle 72 and Avenida Caracas. (Photo credit: Jared Wade)

Now, there is a new chapter in this story after Chinese ambassador to Colombia, Zhu Jingyang, set off another controversy by objecting to criticism of the Chinese companies involved in the construction.

Posting on the social network X, the ambassador said: “Companies do wonderful works in China, but they are victims of unfair criticism in Colombia for their ‘inefficiency’ or ‘inability to perform the works”. Why is there so much difference, where are the real problems?”

The company overseeing the project, Metro de Bogotá, responded, also on X: “Mr. Ambassador, @zhu_jingyang, we ask ourselves the same questions.”

This being the Bogotá metro saga, the conversation didn’t end there.

A letter signed by the head of Metro de Bogotá, Leónidas Narváez, and addressed to the Chinese consortium building the first line of the Bogotá subway, was then published.

It included the following statement: “In the framework of the monitoring carried out by Empresa Metro de Bogotá, as well as by the Comptroller’s Office and the OGP to the development of the PLMB project (First Line of the Bogotá Metro), there is evidence of deviations with respect to the program and inefficiencies in the management of the concessionaire that may result in a situation of risk in obtaining the results of the project … in the fulfillment of the goals and objectives … in the fulfillment of the obligations, in the terms and conditions contemplated in the concession contract, without evidence of due diligence on the part of ML1 (Chinese Consortium) to ensure that the project remains in compliance with the Execution Plan in its version 11 in force to date.”

Still, that was not all.

Narváez requested a change in the project’s management, asking for a general manager with experience in metro-rail projects who speaks Spanish and has leadership to make decisions.

Narvaez added that corrective measures and actions have not been taken to meet the milestones agreed to in the contract.

Metro Line 1, which is comprised of the Chinese consortium, responded to Narvaez’s letter, stating that they remain committed “to the task of solving the inconveniences and difficulties that can arise in a project of this size and complexity.” 

They also gave a reassuring statement saying that they have “highly qualified and experienced engineers and professionals in project management, who have established branches in more than 90 countries around the world, doing business in more than 100 countries and regions, including the execution of infrastructure projects, including more than 80 railway projects of metros and high-speed trains in different cities around the world.”

In terms of upcoming plans to address any challenges, the ML1 consortium said that it is investing in technology and increasing certain heavy machinery usage increase the performance and speed of construction. 

“We are awaiting the arrival of two more pile drivers, which will support the work of the four pile drivers that are already in operation,” said the consortium.

They also plan to use of imported robots, according to the consortium the welding times will be two and a half times faster than the traditional processes currently executed.

In a press conference, Narvaez justified sending the letter. “It is an obligation of Empresa Metro to make preventive alerts,” he said.

In the eyes of many, these recent spats only serve to further prolong construction that continues to affect the city’s economy, commerce, and the quality of life of those around the construction sites.

The Colombian Society of Engineers also weighed in to again question the viability of the elevated subway, but newly elected Mayor Carlos Fernando Galán said that the elevated system will be maintained, regardless of the conclusions of the study conducted by the Colombian Society of Engineers (SCI) on its viability of being a subway or not.

“We have said on several occasions that modifying the object of the contract has very important legal and financial implications,” said Narváez. “The mandate that the mayor has, and that he has expressed when he invited me to continue with this responsibility, is to execute the first line of the subway as it was contracted.”

The name Jaime Alberto Rincón Prado may sound insignificant to the vast majority of Colombians. But he is a man who has been involved a range of business deals, and now one of those deals has led to a high-profile lawsuit in which several people are accusing him of swindling them out of money.

If the lawsuit proceeds as expected, a long-time target of law enforcement who has slipped through the cracks may be facing allegations in court.

The saga dates back to 2005, when the plaintiffs agreed to sell Rincón mobile company S3 Wireless. Rincón never paid them, allegedly, but kept the shares through transfers using companies in Panama.

In Colombia, the case went through the hands of up to 12 prosecutors. Many said they would charge him, but it never came to pass — a reality which in part led to the US embassy in Colombia sending letters to the Colombian prosecutor’s office to take up the matter.

Andrés Idárraga, secretary of transparency at the office of the presidency of Colombia, has addressed the issue recently.

“This case is related to another of impunity, due to the role of the prosecutor’s office in the investigations in this case against Jaime Alberto Rincón Prado, but as mentioned since 2008, he was accused of crimes of aggravated fraud, homogeneous concurrence with procedural fraud and forgery of public and private documents by having transferred, apparently, fraudulently from the company S3 Wireless,” he said in a public statement.

Idárraga said that, according to the plaintiffs, the accused Rincón did not show up, and they had to wait for the process to be initiated again. That is why everything was always delayed and delayed and delayed.

Rincón, according to a report in El Espectador, never appeared at the hearing because he continually presented a 30-day medical incapacity.

“Mr. Rincón’s intention was to learn the business, especially the management of wireless networks on pre-Wimax technologies, and take advantage of the licenses that the company had to use them in private convergent services,” José Luis Malvehy, a Colombian whistleblower, told El Espectador. “S3 Wireless was a precursor of this technology in the country, so the Servisatélite company extracted this know-how, which was the company’s most valuable intangible asset.”

In November 2005, a contract was reportedly signed for Servisatélite (whose legal representative was Rincón) to take 50% of the shares of S3 Wireless in exchange for paying US$2 million, “which had to be fully invested in the company.”

But that, says Malvehy, never happened.

“Those 12 prosecutors, the last one ending up archiving the process and despite the calls of the Defensoría and Procuraduría in the framework of the process, simply the Prosecutor’s Office did not attend the case — much less with the calls of attention of the U.S. Embassy to the Deputy Prosecutor Martha Mancera,” said Idárraga.

Movistar currently has the fastest fixed broadband service in Colombia, with a median download speed of 210.46 Mbps in the fourth quarter of 2023, according to Ookla, an internet speed-testing specialty firm.

This figure greatly beat out all other contenders in the firm’s most recent national report, with ETB ranking second at just 126 Mbps. Claro finished close behind in third place at 115, while Tigo significantly lagged all its top rivals with a median download speed of just 88 Mbps.

By another measure, however, ETB led the way.

The Bog0tá-based internet service provider’s performance of just 7 ms of latency led all companies. Claro and Movistar each performed about four times worse at 28 ms and 27 ms, respectively. Tigo once again trailed the pack with a median multi-server latency of 32 ms.

The poor performance in both categories for Tigo comes despite heavy investment and expansion in recent years. In 2020, the company managed to activate more than 2,358 antennas in the 700 MHz band, but it has been dragged down by controversy and funding challenges in that date back years.

In terms of locations, Cartagena is the current speed champion. Among the areas included in the study, the Caribbean jewel best known for its colonial-era walled city registered the fastest median fixed download speed at 146.74 Mbps.

Of Colombia’s seven largest cities, Cali ranked last, registering the slowest average download and upload speeds at 98.97 Mbps and 44.20 Mbps, respectively.

There is one economic theme that is set to run and run and run in 2024.

The government spent 2023 successfully normalizing gasoline prices, in turn saving billions in subsidies. The next battle is diesel prices — and a collision course with the transport federation, Fedetranscarga, which is claiming that if there is anything more than a modest increase to 10,300 Colombian pesos, the prices of eggs (an arbitrary choice) will rise dramatically to 1,300 pesos — somewhere between 20%-30% more expensive than today.

This claim is quasi-blackmail — and it was immediately debunked by Fenavi (the nation’s poultry federation), which pointed out on Caracol Radio that transport represents only 5% of their costs.

It is important to note, however, that the transport workers are going to represent a problem, as the government, quite correctly, tries to move fuel prices to market levels. If not, there will be a deficit of some 10.5 trillion pesos ($2.6 billion USD) by the end of 2024.

In macro news, January inflation data released last Wednesday was in line with expectations for both the month-over-month (0.92%) and 12-month figures (8.35%). A year ago at this time, the number was 13.25%.

The main contribution last month came from transport (+1.99%) due to gasoline prices continuing to rise +40% on an annualized basis. Within the housing (+0.84%) sector, there was positive news on electric (-2.15%), which fell due to government measures. Nonetheless, on the coast, El Niño is driving prices up 30+% on an annualized basis.

Sadly, Banco de la República have the month off in terms of a rate decision when in reality they should have been cutting rates once again by at least 25 basis points.

Fortunately, however, El Niño is taking a couple of weeks off as well. This will likely be short-lived though, as IDEAM Colombia has made it clear that once the current (modest) rains subside, things are going to get dry and hot once again.

Some news on open finance after Superfinanciera, following its usual lengthy potification, approved a measure geared towards making it easier for clients’ data to be shared when they wish to open a new product at a new entity.

Finally, the Constitutional Court has approved the use of custodial sentences for tax evasion. This has been looked at for two decades, but the Petro tax reform of 2022 got it approved.

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Financial services firm Bayport Colombia has announced a significant transaction of up to $20 million USD, capital it says will be used for the origination of new loans for Colombians with no credit history or who otherwise live in financially stressed conditions

The financing has been divided into two disbursements by Blue Earth Capital, an Swiss-based investment fund that focuses sustainable and impact-oriented financing.

The move aligns with Bayport’s mission to promote greater financial and labor inclusion in the Andean nation, where many remain outside of the traditional banking and credit sector.

“Through this transaction, Bayport Colombia reaffirms its unwavering commitment to financial inclusion and comprehensive support for the diverse financial needs of the Colombian population,” said Lilian Perea, CEO of Bayport Colombia.

“In 2023,” she continued, “we raised more than $120 million USD, strengthening our ability to drive our core purpose: to provide financial solutions that enable our clients to chart a new horizon and a future now. With our sights set on 2024, we remain firm in our vision of continuous growth, reaffirming our dedication to actively contributing to the socioeconomic development of the country.”

Avianca Airlines announced today that beginning February 15, 2024 the carrier will no longer transport travelers under the age of 14 unless traveling with a parent or other authorized, responsible adult.

The new restriction applies to domestic and international flights.

The airline says: 

In all cases, it must be verified that all the documentation required by the immigration authority of the countries of origin, transit and destination is available. In addition, Avianca reminds that it does not provide the unaccompanied minor or minor recommended service on any of its routes.

For more details on this measure, Avianca has published the answers to several questions in its Help Center.

Unaccompanied minor travel is a service generally offered by airlines, usually for an extra fee, where airline personnel ensure safe travel for children who must travel alone. The service requires extra attention for pre-teen travelers, who generally require more care and comfort than teenagers.

In addition, Colombia, like many Latin American countries have strict documentation requirements for traveling minors, such as written and notarized authorization from both parents, even if the minor is traveling with one parent, or in the case of both parents not being available, an official court document attesting such. Airlines may not overrule these legal requirements. For example, a 17 year old foreign minor may fly to Colombia without written parental authorization, but a 17 year old Colombian could not.

Colombia’s avocado industry is hoping to leverage this Sunday’s Super Bowl to promote the country’s growing exports of the creamy green fruit, especially the sought-after Hass variety. The country claims that it is shipping approximately 70 containers to the United States during the pre- and post-Super Bowl period, meeting the growing demand of US consumers. According to the Colombian Corporation of Hass Avocado Producers and Exporters (Corpohass), this year 1,496 tons of Colombian avocados will accompany the sporting event.

According to Corpohass, 2023 was a historic year for the sector, reaching the export record of 5,125 containers representing a growth of 26.4%, compared to 2022, in which 4,055 containers were sent to the foreign market.

Above graphic: US Avocado consumption is rapidly growing and far outpaces domestic production.

“With last year’s record exports, Colombia, the Country of Beauty, is poised to take advantage of the competitive advantage of this star product, which is also a major driver of the country’s agro-industrial exports and generates quality employment,” said Carmen Caballero, president of ProColombia, Colombia’s national export promotion agency.

In an ambitious strategy to leverage the Super Bowl, ProColombia will promote several Colombian destinations with the Petro administration’s narrative of “the Country of Beauty,” through an ad in the official Super Bowl program, showing the iconic Piedra del Peñol in Guatapé, Antioquia.

The cultivation of Hass avocados in Colombia is concentrated in seven departments, positioning itself as the fourth largest agricultural export from the country. This year, according to Corpohass, exports of this fruit are expected to grow by 56% compared to the previous year.

“This is a great opportunity to present Colombia, the Country of Beauty, as a fertile ground for foreign investment, as a competitive tourist destination and an emerging player in the global economic landscape. We are a promising and dynamic location to do business, poised to play a pivotal role in innovation and global economic growth,” added Caballero.

Katheryn Mejía Vergel, executive director of Corpohass, highlighted that “the Hass avocado in Colombia is distinguished in more than 30 countries for its flavor and its commitment to sustainability in all its dimensions.”

According to data from Corpohass, Colombian agribusiness closed 2023 with record exports, achieving a 26.3% increase in containers shipped to different markets around the world. To continue with this growth in 2024, the sector will work hand in hand to position Hass avocados from Colombia as a benchmark for sustainability.

SuperBowl program ad by ProColombia