Banco de la República, the central bank of Colombia, yesterday voted to lower rates by just 50 basis points — from 11.75% to 11.25%.

This is an embarrassingly poor decision that might lead a conspiracy theorist to suggest there is politicking at play.

To add some context to this claim, the central bank didn’t have a rate decision meeting in May. So the 50-basis-point move effectively means that they have chosen to cut rates by a mere 25 basis points each month.

Colombian Finance Minister Ricardo Bonilla must be pulling his remaining hair out.

Along with the rate cut decision yesterday, the central bank committee pointed out that May inflation was stable (with a 7.16% year-over-year rate) compared to April. In doing so, they chose their self-fulfilling narrative that inflation is being stubborn and ignored the fact that analysts had anticipated in advance that food inflation in May would be elevated as a result of nuanced sector factors that won’t be repeated in subsequent months.

The central bank governors also chose to ignore the fact that the May inflation reading was more than 5% below the May 2023 number.

Perhaps most of all, the governors have decided they know better than the government and the rest of the private sector — including key groups ANDI, FENALCO, and Asobancaria — which all have been pleading for rate cuts for the past six months.

This week, Fedesarrollo’s latest survey suggested a year-end 2024 overnight rate of 8.50%.

Good luck getting there at this pace.

Remember: The overworked committee only makes rate decisions at four of its next six monthly meetings. Given this, getting to 8.50% by the end of the year would require an average cut of 69 basis points at each sit down.

Do we really see that happening ?

We are overdue for some rotation in the central bank governors.

And yesterday’s overly conservative decision makes it even more obvious.

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LATAM Airlines and Delta Air Lines have been named as the the official airlines of this year’s Copa America tournament, a soccer competition for nations in South America’s CONMEBOL federation that is being hosted in the United States this year.

The competition, which also features the United States national team along with five other guest nations from the CONCACAF federation, features dozens of games during nearly a month of sporting action across 14 cities in the United States.

The Copa America 2024 final, on July 14, will be held in Miami’s Hard Rock Stadium. Other key matches are being contested in Atlanta, Charlotte, and East Rutherford (New Jersey).

“That Delta and the LATAM group — the airlines that best connect South and North America — are the sponsors of the Copa America 2024 is the perfect example of how both regions are destined to be together,” said Soledad Lago Rodríguez, director of communications for Delta. “Both airlines share a vision and commitment to deliver an exceptional travel experience to all fans who travel to cheer on their national teams.”

To further promote the event, LATAM will transform its airport lounges across the region into a space where fans can enjoy matches of the tournament on a giant screen while accessing comfortable spaces, cocktails, food, and WiFi.

“Athletes and attendees from different countries of the continent will travel to compete and enjoy this great sports festival, so good air connectivity is essential for the success of this tournament,” said Constanza Pizarro, corporate communications manager of LATAM Airlines Group.

Photo: James Rodríguez will star at Copa America 2024 as captain of the Colombian national team. (Credit: @jamesrodriguez/X and Adidas)

This article, written by Lara Loaiza, 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.

Violence against civilians in Colombia is rising amid the various crises facing the government’s Total Peace policy and the strengthening of armed and criminal groups.

Between January and May 2024, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) recorded a 36% increase in the number of people being displaced compared to the same period in 2023. There was also a 171% increase in people experiencing confinement and a 13.8% increase affected by conflict. So far, 53,600 people have been affected by confinement and 29,200 people by mass displacement.

“Since January 2024, there has been a significant increase in the number of confinements. In all months of the first quarter, there has been an increase in events compared to the same period last year. March stands out in particular, with almost four times as many events,” OCHA told InSight Crime in an email.

Colombia’s security situation has been aggravated by several factors, including the criminal actions of armed groups and difficulties in negotiations between the state and armed groups under Total Peace, the flagship policy put forward by President Gustavo Petro in which the government negotiates with different armed groups and criminal gangs in parallel.

Below, InSight Crime analyzes why violence is rising in Colombia.

Criminal Disputes Fuel Violence

The Pacific region, comprising the departments of Chocó, Valle del Cauca, Cauca, and Nariño, has been the most affected by violence in 2024, with criminal disputes increasing the number of people affected.

In Chocó, the National Liberation Army (Ejército de Liberación Nacional – ELN) and the Gaitanist Self-Defense Forces of Colombia (Autodefensas Gaitanistas de Colombia –  AGC), also known as the Gaitanistas, have for years been engaged in all-out war over drug trafficking and illegal mining.

In Cauca and Nariño, the ELN and dissidents of the former Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC), also known as the ex-FARC mafia, are fighting for control of areas crucial to different parts of the drug trafficking chain, from coca cultivation and cocaine processing to maritime drug departure ports.

In Putumayo and Caqueta, the humanitarian crisis stems from clashes between the Carolina Ramírez Front of the ex-FARC mafia’s Central General Staff (Estado Mayor Central – EMC) and the Border Command, a group allied to another faction of FARC dissidents called the Second Marquetalia. The departments are among the country’s coca-growing hotspots and are key departure points for drug shipments leaving for Ecuador and Brazil via the Putumayo River.

“In recent months, these dynamics [of violence] have resulted in large-scale confinements, with more than 17,000 people affected in the municipalities of Puerto Caicedo, Puerto Guzmán, Puerto Leguízamo, Villagarzón in Putumayo, and Solano in Caquetá, areas where these kinds of emergencies had not occurred in years,” the OCHA commented.

Other areas, including southern Bolívar, also saw rising levels of violence. Since 2023, the Ombudsman’s Office has warned of increased clashes between FARC, ELN, and AGC dissident groups for control of the area, which is another key corridor for drug trafficking and illegal mining.

Peace Negotiations Stall

The increase in humanitarian incidents in Colombia comes as Petro’s government is seeking peace deals with some of the country’s largest armed groups: the ELN and factions associated with the EMC. But negotiations with both groups are currently on hold.

Dialogue with the ELN stalled in February after the government announced the initiation of regional talks with the Comuneros del Sur Front in Nariño, a group that declared a rebellion against the Central Command (Comando Central – COCE), the ELN’s main leadership body. The ELN’s emissaries argued that only delegates at the national level should be authorized to negotiate with the government and subsequently suspended their part in negotiations.

Additionally, in May, the ELN announced the reactivation of extortion kidnappings as a form of financing, causing tensions. Although both parties signed an agreement on the participation of civil society in the talks, the ELN claims that the talks remain frozen.

Talks with the EMC fragmented in March, when Petro suspended the ceasefire in the departments of Cauca, Nariño, and Valle del Cauca, which together account for 30% of the humanitarian incidents recorded by OCHA between January and May. This break in the ceasefire came after factions associated with the EMC killed an Indigenous leader in Cauca. Tensions within the EMC over whether to continue negotiating with the government led fronts loyal to Néstor Gregorio Vera Fernández, alias “Iván Mordisco,” to leave the table, while others decided to continue.

The crises in the negotiations have cast doubt on the effectiveness of the government’s Total Peace policy in reducing the rates of violence in the territories where these groups are present.

“Between January and April 2024, continued clashes between Non-State Armed Groups (NSAGs) and the suspension of the bilateral ceasefire between the government and one of these groups resulted in an increase in people affected by confinement and massive forced displacement, especially in the departments of Cauca, Putumayo, Caquetá, and in Magdalena Medio, mainly Sur de Bolívar,” OCHA told InSight Crime.

Ceasefires with the ELN and the EMC have only reduced violence against security forces, while clashes between illegal groups continue, affecting citizens.

“The ceasefire is with the armed forces, but not with the community,” Alejandra López, an analyst with ACAPS, an organization dedicated to humanitarian analysis, told InSight Crime.

More Violence, Greater Social Control

As violence and conflict have increased, armed and criminal groups have deepened their social control.

One of the main forms that this control has taken is “carnetización” — the issuing of IDs to inhabitants in territories where the groups have a presence — to control the entry and exit of people. During the year, the Ombudsman’s Office and other institutions announced an increase in the number of people being given IDs by FARC dissidents in the departments of Meta, Nariño, Antioquia, Cauca, Tolima, and Huila, among others.

In addition, the groups have increased mobility restrictions in departments such as Caquetá, Cauca, Córdoba, Chocó, Meta, Antioquia, Nariño, Norte de Santander, Santander, Guaviare, Arauca, and Putumayo.

“Restrictions on mobility and/or access are part of the strategy to control NSAGs, including the control of businesses, restrictions on movement, limitations on access to cultivation areas, and in some cases, the carnetización of people,” OCHA said.

As with enforced IDs and restrictions on movement, confinement is aimed at controlling the entry and exit of people, goods, and services into and out of a territory. This gives the groups enforcing confinement greater territorial control and allows them to mobilize troops and illegal resources without major impediments. An example of this are the armed strikes that the ELN launched against the Gaitanistas in Chocó in February, which affected approximately 24,000 people.

In other cases, confinements occur because victims of violence prefer not to move, said Manuela Barrero, senior analyst at ACAPS.

“If they are displaced to the nearest municipal capital, there is no effective response from the state to relocate them or to guarantee their humanitarian needs,” he said, adding that displacement can also generate more pressure from the armed groups, who seek to prevent the humanitarian impact of their activities from becoming visible.

This article, written by Lara Loaiza, 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.

Earlier this month, Luis Carlos Reyes Hernández was named as Colombia’s new minister of commerce, industry, and tourism.

Photo: Luis Carlos Reyes being sworn in as the new head of MinCIT. (Credit: Presidencia)

Reyes, a 40-year-old from Bogotá, takes over during an uncertain economic time nearly halfway through the four-year presidency of President Gustavo Petro, who took office in August 2022.

According to the government, Reyes will be taking over the Ministry of Commerce, Industry and Tourism (MinCIT) with a primary goal of strengthening the economy while maintaining the president’s decarbonization agenda and promoting Colombia as a tourist destination throughout the world.

Reyes will also be tasked with continuing to expand trade relations with foreign partners and generally ensuring that Colombia receives fair treatment as it operates in the international market.

The new minister graduated from Florida International University in the United States with a degree in economics and history before earning a master’s degree in economics and a doctorate in economics from Michigan State University.

Professionally, Reyes has served as general director of the National Tax and Customs Directorate (DIAN) and an economist for the United States Federal Communications Commission (FCC).

He has also spent time teaching and conducting research on economic development and public economics. He has published academic works in international journals such as World Development, the Journal of Institutional Economics, and the Economics Bulletin.

This Friday, Banco de la República will sit down once again to deliberate and, hopefully, they won’t disappoint everyone once again.

Photo: Banco de la República, the central bank of Colombia, in Bogotá. (Photo credit: Camilo Sanchez)

Having taken a day off in May, this week surely they need to reduce the current 11.75% by more than their standard 50 basis points. The market needs/wants rates to come down at a far more accelerated rate in order to restore confidence to both consumers and investors. It will also help us avoid the type of shabby home sales data (May -26.9%) that was reported by Camacol Colombia last week.

While a central bank jam packed with nominees of former President Iván Duque might be happy to see current President Gustavo Petro in an economic jam, it isn’t just Finance Minister Ricardo Bonilla who is demanding lower rates. The private sector — in the shape of Asobancaria, Fenalco, and ANDI — have been demanding more resolute action on interest rates for almost a year.

Hopefully, we will get the 1% cut that will add some stimulus to the market.

But will the not-so-Magnificent 7 on the decision-making committee be up to the job?

That stimulus needs to come via monetary policy because, right now, the fiscal situation simply won’t allow vast injections of money from the government.

Yes, they increased the debt ceiling last week by 24% to $87 billion USD. But that is geared towards management as opposed to stimulus. Moody’s Ratings has again been discussing the need for prudence. And Bonilla 10 days ago spoke to that by reducing government spending plans by $5 billion USD.

Ironically enough, at a time when the much-maligned-as “socialist” government is trying to be prudent with the finances, the “conservative monetary” opposition is central to clarion calls to loosen the purse strings.

This irony can also be seen in the wait for Bonilla to announce the dismantling of diesel fuel subsidies that are costing Colombia $5 billion USD per year of money it doesn’t have. In 2023, the government did a great job stripping away gasoline subsidies (primarily from the rich), and now the transport companies need to prepare themselves to pay more. These communist style subsidies were introduced by previous market-economy, rightwing governments and are now being removed by the “socialists.” A

t times Colombia is a indeed tough read!

The Colombian peso could be impacted by the rate cut on Friday, but its recent slippage — due to a mixture of local concerns over the fiscal situation and to a greater extent by overseas events — means any cut is more than priced in.

For now, I will leave it there. But I will be back with more during the week with anything pertinent. In the meantime, wherever you are in the world, savor the fact that the Colombian Congress is on its holidays.

And pray that they are on beaches that have no signal!

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Colombian airline Avianca recently announced that it will reactivate several flights between several domestic cities and three major travel hotspots in the United States.

Specifically for this summer high season, the Bogotá-based carrier will be operating six international routes between:

• Cali and New York
• Cali and Miami
• Cartagena and New York
• Cartagena and Miami
• Medellín and Orlando
• Pereira and New York

 

Tickets are already available across each flight.

The routes will be operated on A320 aircraft with capacity for 180 passengers, representing an increase of more than 11,000 seats each week across all six routes.

“We continue to bet on Colombia as a connectivity hub in Latin America and part of that commitment has been to strengthen our point-to-point operation to provide more direct connectivity to the regions of Colombia while facilitating the arrival of more tourists to get to know the country of beauty,” said David Alemán, sales director for Colombia and South America at Avianca.

The CX Summit 2024, the main annual event on customer experience and user service organized by the Colombian BPO Association (BPrO), recently concluded its 24th edition — with a record attendance of more than 1,200 people and 80 exhibitors.

For two days in Cartagena, attendees had the opportunity to explore new ideas, share experiences and establish valuable connections in a technological and challenging environment, where artificial intelligence was the protagonist in decision-making.

Photo: Ana Karina Quessep, president of BPrO, at the CX Summit. (Credit: BPrO)

One of the most anticipated moments of the CX Summit was the delivery of the CX Interaction Awards, where outstanding companies in customer interaction and that have demonstrated excellence in various processes, contributing to the success of their organizations through the adoption of new technologies and innovative tools, were recognized.

These winners stood out for their commitment to excellence in customer experience and innovation in the BPO sector, thus reflecting the spirit of avant-garde and quality that characterizes the CX Summit.

“The CX Summit 2024 has been an enriching space where we have been able to share knowledge, experiences, and best practices to promote the BPO industry in Colombia,” said concluded Ana Karina Quessep, president of BPrO. “We thank all the participants, exhibitors and awardees for making this event a resounding success.”

2024 CX Interaction Award Winners

Best Customer Experience Strategy

Gold: Emtelco
Silver: Concentrix
Bronze: Konecta

Best Multichannel Strategy

Gold: Emtelco
Silver: konecta
Bronze: Americas BPS

Best Social Strategy

Gold: Konecta
Silver: BRM An Alta Company
Bronze: Apex America Colombia

Better Management of Human Capital

Gold: Emtelco
Silver: Diageo Colombia
Bronze: Contento BPS

Best Employee Engagement Strategy

Gold: Telecenter Panamericana
Silver: Emtelco
Bronze: Diageo Colombia

Best contribution in social responsibility

Gold: Becall outsourcing S.A.S
Silver: Intouch CX
Bronze: Emergia

Best Inclusion and Diversity Strategy

Gold: America BPS
Silver: Almacontact S.A.A
Bronze: Diageo Colombia

Best Technological Contribution

Gold: America BPS
Silver: Intelcia Colombia
Bronze: Konecta

Best Data Analytics Strategy

Gold: Emergia
Silver: Outsourcing S.A.S Bic
Bronze: Johnson & Johnson

Best Outsourcing Company Operation

Gold: Telecenter Panamericana LTDA
Silver: Emtelco
Bronze: Atlantic Quantum Innovation S.A.S

Better Internal Operation

Gold: Coomeva Solution & Service Center
Silver: Diageo Colombia
Bronze: Johnson & Johnson

Best Collection Strategy

Gold: Emtelco
Silver: Intelcia Colombia
Bronze: ASD-IQ Outsourcing-Icetex Group

Best Shared Service Center Management for Its Customer Service 

Gold: Diageo Colombia
Silver: Telecenter Panamericana LTDA
Bronze: Strategy Big Data

Best Export Management

Gold: Konecta
Silver: Comware S.A.S
Bronze: BRM an Alta Company

Executive of the Year Award

Marcela Ramírez Palacio of Intouch CX

Talent Award

Sandra Mireya Giraldo Arellano of Emtelco

Collective Mining Ltd. (TSX: CNL), a Canada-based mining company, recently announced that it has mobilized a sixth drill rig to its Guayabales Project in Caldas to contribute to the 40,000-meter drill program at the site for 2024.

This adds to the drill rigs that are currently operating at the Apollo, Box, Olympus and Trap targets, “with the sixth rig to commence drilling for the first time at the grassroot generated X target located in the southern portion of the project area,” according to the Toronto-based company.  “Drill cores from multiple holes are currently being assayed at ALS Laboratory in Lima, Peru, with results expected in short order.”

Collective Mining noted that it will also soon begin an airborne geophysical survey covering the company’s Guayabales Project in Caldas.

“The primary objective of the program is to detect conductive sulphide bearing ore bodies, similar to the Apollo system, at depths beginning directly below the surficial cover to up to 2,000 metres depth,” noted Collective Mining.

This survey will be conducted by Geotech Ltd., which will carry out helicopter borne Versatile Time-domain Electromagnetic (VTEM) and Z-Axis Tipper Electromagnetic system (ZTEM) surveys, and cover a total area of 74 square kilometers with 1,449 flight line kilometers.

The company expects the surveys to be completed in July 2024, with full results ready by the end of the third quarter. Depending on the outcome, drilling on new targets generated from the survey could begin as soon as the fourth quarter of this year, noted Collective Mining.

“The enormous potential of our Guayabales Project has already been proven based on the number of discoveries that we have made by drilling within the confines of areas defined by limited outcrop exposure,” said Ari Sussman, executive chairman, in a statement.

“Since over 90% of the project remains under cover,” added Sussman, “commissioning an airborne VTEM and ZTEM survey makes a lot of sense to assist us in outlining new targets in areas with no outcrop. In particular, we are excited to use the results to refine planned future drilling at the Plutus target given its sheer scale and lack of outcropping rock to sample.”

Photo: One of Collective Mining’s sites in Colombia. (Photo credit: Loren Moss)

Canadian retail chain Dollarama Inc. (TSX: DOL) recently announced that it has acquired an additional 10% equity interest in Dollarcity as the Latin American retailer solidifies its plans to expand into Mexico.

The new stake was acquired in exchange for the issuance of 6,060,478 common shares of Dollarama and increases the Montreal-based company’s equity interest to 60.1%. Additionally, Dollarama noted that it has an option to purchase an additional 9.89% equity interest “at any time on or before December 31, 2027, according to the Montreal-based company.”

Dollarama said it expects the transaction to be neutral to its net earnings per share for the fiscal year 2025.

With respect to expansion plans in Mexico, which is expected to see its first store open in 2026, the company stated that “Dollarama and the Dollarcity founding stockholders will indirectly have an 80.05% and 19.95% equity interest, respectively, in the Mexico portion of the business.”

“Dollarcity continues to represent a compelling, long-term growth platform for Dollarama, with the Dollarcity leadership team successfully executing on its strategy throughout the course of our over decade-long partnership,” said Neil Rossy, president and CEO of Dollarama. “Since we initially acquired a majority equity interest in 2019, Dollarcity has more than tripled its revenues and significantly grown its presence in key Latam markets, demonstrating the underlying strength of its business model and the appetite for our value proposition from Latam consumers.”

Colombia is currently the leading market for Dollarcity. Overall, 324 of the firm’s 547 retail locations are in Colombia. Guatemala has 99 stores, El Salvador has 72, and Peru has 52.

Dollarama recently updated its growth forecast to nearly double its overall footprint to 1,050 stores by 2031, with the bulk of the expansion expected to come in Colombia and Peru. The figure does not take into account any future expansion in Mexico, the firm noted.

“With its strong leadership team, Dollarcity is well-positioned to continue delivering profitable growth, both from its current markets of operation and as we eye our next market of entry,” said Rossy. “We look forward to preparing for entry in Mexico in the near term, a large and dynamic market with untapped potential in the value retail space, guided by the same careful and disciplined approach as with our successful entries in Colombia in 2017 and in Peru in 2021.”

Dollarcity signage at El Tesoro mall in Medellín. (Photo credit: Loren Moss)

The International Ibero-American Startup Conference will come Medellín from October 21-22, bringing together a wide range of early-stage companies and entrepreneurs from across the world.

Over two days at the event, which will be open to the public and held at Pontificia Bolivariana University, companies will gather to foster greater cooperation and discuss growth opportunities and funding strategies surrounding the startup ecosystem.

Dozens of speakers will share their stories, provide advice, and facilitate forums for a wider conversation among entrepreneurs in a range of different industries.

Participants will include Startups Investor Accelerator, Vox Capital, Eoniq Fund, Innvertur, Wa4steam, Club Impact Angels, Urucap, Alastria, Finnova, Fimed, Pista 8, Vesna Ventures, Nero Ventures, D’Ella Capital, BeToken Capital, and MAD FinTech.

“This is a great opportunity to highlight the city as an ecosystem of entrepreneurship and innovation, which helps us to promote the companies already present and encourage the arrival of new ones,” said María Fernanda Galeano Rojo, secretary of economic development for Medellín.

The conference is organized by the International Association of Startups in collaboration with Red Business Market, Talent Hub, Jaguars Startups, Ruta N, Salazar Institution & Herrera University and Pontificia Bolivariana University.

The Medellín mayor’s office and the Ministry of Economic Development, among others, are providing additional support.