Whilst today marks the start of 2023 for most businesses, Colombia won’t be fully up to speed for another week and there is a long weekend yet to navigate.
Back in the mists of time I would write my Colombian Almanac, but for 2023 I will simply highlight five key issues to look for.
GROWTH: As per the rest of the world, Colombia will slow in a handbrake fashion but how far? For 2022 we are looking at ~7.7% so our slowdown will be as big as anyone, however 1.5%, which is predicted by most, whilst a modest number will still be close to ‘on the podium’ in Latin America and looks set to increase again in 2023. One key factor remains unemployment: last week for November (9.1%) it hit another low versus recent times. What can the government do about keeping it there whilst adding to female and formal employment ?
VENEZUELA: Very briefly as I am always on about Gustavo Petro’s Black Swan…but keep a close eye on the normalization of relations. They are significant in many respects ranging from the overall economy, energy security and security in general.
The hope is that Colombia can start to resemble the sum of its parts which would allow the reduction of poverty and the flourishing of a country with incredible potential.
PENSION REFORM: This is likely to be where political swords are drawn and misinformation floods the social networks. Already battle lines are being drawn with the Private AFPs defending their performance and debates over what savings should be used for when investing. The pension system unquestionably needs a reform, not least of which surrounds performance benchmarks but at the same time the government needs to take its time. The AFPs need to be at the forefront of the robust fintech and venture capital expansion in Colombia. Far too many high quality assets are being hoovered up in foreign venture capital and private equity funds.
AGRICULTURAL REFORM: While the politicians and others involved in the extractive industries continue to swing verbal punches at each other about the way forward for a slowly dying sector, the future for Colombia, arguably the best growing climate on this green earth, is out in the fields. Of Colombia’s approximately 32 million productive hectares, only around 4 are being used, and that can’t continue. Finance Minister Ocampo has promised to deliver the 3 million hectares—promised under the 2016 peace agreement—into the hands of those who most need them, but that would only be a start. A lot of radical, and unpopular moves are needed.
TOTAL PEACE: The ELN and five other smaller groups have agreed to a ceasefire for the next six months in order to explore the possibilities to finally lay down their weapons. There are some saber rattlers who don’t like it but to me, if it leads to one less guerrilla or violent death, it needs to be explored. Of course, the real jackpot would be the Clan de Golfo, by far the biggest armed group, who has no political ideology with which to negotiate.
These are just a few of the big-ticket items but there are so many more in such a complicated country. As ever the hope is that Colombia can start to resemble the sum of its parts which would allow the reduction of poverty and the flourishing of a country with incredible potential.
Please find below the LinkedIn video:
Let’s see……Happy New Year