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Colombian Investment IV - The Amazon
When one considers Latin American investments and investing in Colombia in particular the famous words of Baron Rothschild come to mind. This 18th century investor and banker is credited with saying that “The time to buy [stocks] is when there is blood in the streets.” He was talking about 18th century wars and rebellions but his words are pertinent in the New World today. Specifically, Colombia is coming out of a half century long rebellion and many investors have not yet caught on. This is the forth of a four part series about Investing in Colombia. We will deal briefly with the history of the Colombian Civil War and then give thought to investment opportunities in the Colombian Amazon.
The Colombian Civil War
The current Colombian civil war has lasted from the mid 1960’s to the present. Rebels say they are fighting for the rights of the Colombian poor. The primary rebel group is FARC (Fuerzas Armadas Revolucionarias de Colombia). The rebels primarily have occupied remote areas of the jungle, especially in the Amazon Basin with occasional forrays into the cities. An increasingly aggressive campaign by the Colombian government has driven FARC from the cities and forced them to cross borders into Venezuela, Ecuador, and Panama in search of sanctuary. Despite the claim that FARC simply wants to improve the lot of poor Colombians they have been tied to drug trafficking. Many Colombian families can name a member of two who were assassinated by FARC for opposing extortion efforts by the rebels. On the other hand government allied paramilitary forces fighting FARC are also accused of drug trafficking and terrorism. The good news is that the conflict is settling down and Colombian Peace Talks have begun. The time has come for investing in Colombia.
The Amazonia of Colombia
The Southeast portion of Colombia, a third of its territory, lies east of the Andes in the Amazon Basin. This 400,000 square kilometer region is part of the Amazon rain forest. The region is divided into six departments, Amazonas, Caquetá, Guainía, Guavirre, Putumayo, and Vaupés.
If there is a last region where investing in Colombia by foreign investors will be welcome and safe it is probably the Southeast of the country. Air travel in and out of the region is chancy at times. River travel can take weeks. However, the same riches that have caused environmental concerns in Brazil lie in the Colombian Amazon. This will be a good region to keep an eye on for opportunities for investing in Colombia, albeit at a distance. In this region think of timber, oil, and minerals as well as eco tourism.
The Rising Colombian Peso
The Colombian peso has outperformed all other currencies versus the US dollar in 2012. For those interested in offshore investment and offshore banking, Colombia may well be the place to be as its economy takes off.