This has been a “bitty” week in Colombia with few advances. The regional elections are just 8 days away, and that means far too much media time has been taken up with mediocre — at best — politicians.
(Image credit: Bru-nO)
Energy was a big part of the news as the 70%-85% possibility (depending where your read) of El Niño arriving is now upon us. Colombia has the capacity to supply itself, but the key is that that nation’s hydro-dependency is so high. A few short years ago, during the last drought, there was all manner of chatter about making sure we didn’t get in this position again. And, yet, here we are!
Sticking with energy, Ecopetrol announced, in conjunction with Shell a new natural gas discovery off the Caribbean Coast. Always welcome.
Canacol Energy made news as well deciding not to move ahead with the contract to provide gas to Empresas Públicas de Medellín (EPM) in Medellin from December 2024. The Antioquia company may be huge, but it has been a mess for the past decade. And the fact that the Canadians prefer to supply Bolivia pretty much says it all. EPM needs to be moved to the private sector ASAP.
The Colombian peso will close the week little changed (~4,250 to the US dollar) with eyes very much on external events. Brent oil remains above $90 USD per barrel, which helps, despite the United States now looking to remove export sanctions with Venezuela for six months as Maduro offered up the prospect of elections in 2024. This is no small part is due to the improved relations between Bogota and Caracas. Naturally, if there ever is a more globally friendly regime in Venezuela, this would bode well for Colombia.
As a quick aside: Equity markets were quiet this week except for the leap in Grupo Éxito after Groupe Casino agreed to sell to Grupo Calleja from El Salvador.
Meanwhile, ever since the Autumn 2022 tax reform the private sector has complained about higher rates. And the moaning continues.
This week, at their annual gatherings, both the National Federation of Carbon Producers (FENALCARBON) and Cotelco (Hotel Federation) were questioning the sustainability of their businesses after taxes were raised.
Somehow, much of the private sector continues to think that a sovereign nation can continue to operate, pay the bills, and support all the public services required even with everyone paying the minimum taxes possible. Unfortunately, the last time I looked out of the window, Colombia remained an emerging market without the resources to support all the needs of society.
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