Investing In Colombia II Bogota
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When one considers investing in Latin America 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 second of a four part series about Investing in Colombia. We will deal briefly with the history of the Colombian Civil War and then look at investment opportunities in the 8 million person capital city of Bogotá.
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 Capital City of Colombia
Affect the accent of someone from Madrid when telling a story and a Latin American will often laugh, just at the accent. The same is true about a Bogotá accent for Colombians from outside of the capital city. Bogota lies at 8,600 feet above sea level making it the third highest city in Latin America after La Paz and Quito. One in every six Colombians lives in the Bogota municipal area.
Bogotá is the seat of the Colombian national government and the economic and industrial center of Colombia. Bogotá accounts for a fourth of Colombia’s GDP. It is one of the largest centers of industry in Latin America. The city is centrally located making logistics relatively easy in this mountainous country. A large number of multinational companies have located in Bogotá. A downside to its central location is that Bogotá is not a port city, so transport of finished goods for export can be difficult. Telecommunications and service industry provide three fourths of all jobs in Bogotá.
Bogota is high, cold, and not a tourist destination.
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