Com­merce and cul­ture in abun­dance await vis­i­tors to Bo­gota

A new pres­i­dent, a peace ac­cord and a tourism boom sig­nal a bright fu­ture for Colom­bia. But Bo­gotanos are not ready to party just yet...

Business Traveller (Asia-Pacific) - - CONTENTS - WORDS CHRIS MOSS

The An­dean sun, veiled by pass­ing clouds but de­cep­tively strong, shines down on Plaza Bo­li­var. As ever, the square is throng­ing with tourists, SIM-card ven­dors, pres­i­den­tial guards in cer­e­mo­nial uni­form and chil­dren chas­ing pi­geons. On one side, the mag­nif­i­cent neo­clas­si­cal cathe­dral. Op­po­site is the town hall. A third build­ing houses the Capi­to­lio Na­cional, seat of the na­tional con­gress. The fourth is oc­cu­pied by the Palace of Jus­tice which, in Novem­ber 1985, was at­tacked by mem­bers of the M-19 Marx­ist guer­rilla group. They took 300 peo­ple hostage. A hap­less mil­i­tary raid fol­lowed, dur­ing which 11 Supreme Court jus­tices, 49 Colom­bian soldiers, 35 M-19 guer­ril­las and 11 an­cil­lary staff and civil­ians died or dis­ap­peared.

Whether here in La Can­de­laria – the cob­ble­stoned his­toric cen­tre – or in its sky­scraper-strewn sprawl, Colom­bia’s past hor­rors are eas­ily un­earthed. His­to­ri­ans usu­ally trace the ori­gins of the na­tion’s well-re­ported woes to a ten-year civil war known as La Vi­o­len­cia, sparked by the as­sas­si­na­tion of pres­i­den­tial can­di­date Jorge Eliecer Gai­tan in 1948. But the armed con­flict that gen­er­ated the im­age of a pariah na­tion – in thrall to drug lords, left-wing rebels and right-wing para­mil­i­tary groups – prob­a­bly peaked in the 1990s, when two-thirds of the world’s kid­nap­pings oc­curred here, and the FARC (Rev­o­lu­tion­ary Armed Forces of Colom­bia) con­trolled up to a third of Colom­bia’s ter­ri­tory.

Deal­ing with the past

From 2002, the gov­ern­ment of Al­varo Uribe gave the army greater pow­ers to un­der­mine the mil­i­tary strength of the guer­ril­las. His suc­ces­sor, Juan Manuel San­tos, kept up the pres­sure and in­vited FARC to peace ne­go­ti­a­tions. The twin-pronged ap­proach worked. San­tos was awarded the No­bel Peace prize in 2016. On Septem­ber 1, 2017, FARC be­came a po­lit­i­cal party, parad­ing through Plaza Bo­li­var. In tan­dem with th­ese changes are dra­mat­i­cally im­proved eco­nomic prospects. Since 2011, di­rect for­eign in­vest­ment into Colom­bia has more than dou­bled and, ac­cord­ing to the Min­istry of Com­merce, more than 1,100 for­eign firms have set up op­er­a­tions in the coun­try. In May, Colom­bia was in­vited to join Mex­ico and Chile as the third Latin Amer­i­can mem­ber of the OECD, the se­lect club of 36 wealthy, sta­ble democ­ra­cies.

But South Amer­ica’s third largest econ­omy, be­hind Brazil and Ar­gentina, re­lies heav­ily on global com­mod­ity prices. In­evitably, Colom­bia reels when­ever there is a down­turn – as at present – in the value of pe­tro­leum, coal, bananas, cut flow­ers or cof­fee. It’s the world’s largest pro­ducer of mild, washed Ara­bica cof­fee; in 2017, pro­duc­tion was 14.2 mil­lion bags, mainly for ex­port. Eco­nomic growth slowed to 1.8 per cent in 2017 – down from 2 per cent the pre­vi­ous year (and way down from the 5-6 per cent notched up be­fore the crude oil crash of 2014). But the World Bank noted an up­turn in fi­nan­cial ser­vices. As the cli­matic ef­fects of the El Nino phe­nom­e­non dis­si­pated and the live­stock sec­tor ex­panded, agri­cul­ture ex­panded 4.95 per cent last year.

Colom­bia reels when there is a down­turn in the value of pe­tro­leum, coal, bananas, flow­ers or cof­fee

“The agri­cul­tural sec­tor has im­mense po­ten­tial now ru­ral ar­eas have seen the end of the war,” says Mauri­cio Ro­driguez, for­merly Colom­bia’s am­bas­sador to the UK, and cur­rently an ad­vi­sor to Bo­gota’s mayor, En­rique Pe­nalosa. “Even though peace is not fully con­sol­i­dated, we are start­ing to en­joy the div­i­dends, such as a boom in tourism and record high in­vest­ment lev­els.”

Money wor­ries

Most ob­servers con­cur that Colom­bia needs to turn its frag­ile peace into a com­pre­hen­sive so­cial con­tract that tack­les crime, wide­spread cor­rup­tion and so­cial in­equal­ity. Re­forms across busi­ness and bank­ing are also needed to steer the coun­try away from “carteli­sa­tion”, a com­mon trait in Latin Amer­i­can economies ex­ac­er­bated by Colom­bia’s par­tic­u­larly prob­lem­atic his­tory.

“The Colom­bian econ­omy faces a num­ber of struc­tural chal­lenges,” says Luis Car­los Reyes, as­sis­tant pro­fes­sor of eco­nomics at Bo­gota’s Pon­ti­f­i­cia Uni­ver­si­dad Jave­ri­ana and co-founder of the Ob­ser­va­to­rio Fis­cal, an ethics-fo­cused think tank. “Oligopolies in sev­eral in­dus­tries tend to run the show. This is an is­sue of par­tic­u­lar im­por­tance in the fi­nan­cial sec­tor: it is dif­fi­cult for en­trepreneurs to find cap­i­tal to fund new busi­nesses, un­less they get it from the es­tab­lished banks at rates that are not com­pet­i­tive.”

Reyes also points to dif­fi­cul­ties en­ter­ing the lo­cal stock mar­ket. Lead­ing glass­maker Tec­no­glass claimed that it was eas­ier to join Nas­daq than the Colom­bian Stock Ex­change.

“Is­su­ing bonds is com­pli­cated be­cause of reg­u­la­tion. Some large firms re­sort to bor­row­ing abroad, which is risky be­cause of fluc­tu­a­tions in the ex­change rate. It would be good to have a more sta­ble ex­change rate – it’s cur­rently favourable to ex­porters – and a more sta­ble tax sys­tem. There’s a ma­jor tax re­form ev­ery other year or so, and busi­nesses don’t know what to ex­pect in terms of their tax bur­den in the long run. In sum, in­vest­ing is harder than it should be un­less you are a big player, and that is not good for the econ­omy. We need more com­pet­i­tive fi­nan­cial mar­kets.”

In May, Colom­bia elected a new pres­i­dent. Ivan Duque, 42, a mem­ber of the right-wing Demo­cratic Cen­tre party and for­mer ally of Uribe, was widely viewed as the busi­ness­friendly choice. He as­sumed of­fice on Au­gust 7 pledg­ing to boost in­vest­ment, cut taxes and shrink the state.

“The new pres­i­dent was the can­di­date of the sta­tus quo,” says Reyes. “He had the back­ing of the large con­glom­er­ates that run the coun­try’s econ­omy. While the busi­ness en­vi­ron­ment may not im­prove dra­mat­i­cally, his be­ing elected avoided a num­ber of risky eco­nomic ex­per­i­ments that could have come un­der his op­po­nent, Gus­tavo Petro, who is ide­o­log­i­cally close to the old-guard, anti-free-trade Latin Amer­i­can left.

“It was a choice be­tween a can­di­date who was sus­pected of be­ing anti-busi­ness and anti-mar­ket, and one who is at best pro-busi­ness but not re­ally pro-mar­ket. In this sense, Duque may be bet­ter for the econ­omy.”

From gold to gi­ga­bytes

The orig­i­nal pre-Colom­bian in­hab­i­tants of Bo­gota, the Muisca, were mas­ter gold­smiths, and the city’s Gold Mu­seum is a world-class show­case of pre­cious met­al­work. Gold min­ing and other ex­trac­tion in­dus­tries have played a ma­jor part in the na­tion’s eco­nomic his­tory. While the Colom­bian cap­i­tal is of­ten dubbed “the Athens of South Amer­ica” (a nick­name given by Prus­sian ex­plorer Alexan­der Von Hum­boldt in the 19th cen­tury) for its cul­tural riches, Bo­gotanos tend to be busi­ness-minded and en­trepreneurial in spirit.

With a pop­u­la­tion in ex­cess of eight mil­lion, Bo­gota is one of Latin Amer­ica’s key busi­ness cen­tres. A new ter­mi­nal at El Do­rado In­ter­na­tional Air­port opened in 2012. Re­cent ho­tel open­ings in­clude a 297-room Grand Hy­att, a sleek W, two Four Sea­sons prop­er­ties and the uber-cool BOG bou­tique ho­tel. Its modern CBD is in the Chap­inero dis­trict, away from traf­fic-hogged La Can­de­laria. In Jan­uary, the glass-walled, 4,000-ca­pac­ity Agora con­ven­tion cen­tre opened. In a bid to keep ahead of up­start smaller ri­val cities, Bo­gota styles it­self as the tech and co-work­ing cap­i­tal: HubBOG, a “start-up cam­pus” set up a decade ago, claims to have men­tored more than 200 coun­tries.

Two miles north of Chap­inero are sev­eral con­tigu­ous din­ing and drink­ing quar­ters, in­clud­ing Zona T (aka Zona Rosa), Zona G (for “gourmet”) and Par­que de la 93. While still chas­ing Peru as a gas­tro­nomic cen­tre, Bo­gota chefs Harry Sas­son and Leonor Es­pinosa are mak­ing waves, while out-oftown eatery An­dres Carne de Res (and its in-town branch An­dres DC) com­bines fun, danc­ing and great food in an ef­fer­ves­cent Colom­bian man­ner; branches of Lima’s Astrid y Gas­ton and Rafael are also found in the city.

Be­com­ing a busi­ness hub

Be­hind the vi­va­cious ve­neer, the city has some way to go to es­tab­lish it­self as a pre­mier busi­ness hub.

“Bo­gota has gone through a cou­ple of dif­fi­cult may­oral ad­min­is­tra­tions, in­volv­ing cor­rup­tion scan­dals and a lack of ef­fi­ciency in pub­lic fi­nance,” says Juan Guillermo Mon­cada, a re­searcher at Bo­gota-based think tank In­sti­tuto de Cien­cia Po­lit­ica (ICP).

“It faces tran­sit and pub­lic trans­port chal­lenges, and se­cu­rity prob­lems as well. Nev­er­the­less, Bo­gota has po­si­tioned it­self as a ma­jor Latin Amer­i­can cap­i­tal for its strate­gic geo­graph­i­cal po­si­tion and di­verse pop­u­la­tion.

“It’s an at­trac­tive city not only to Colom­bians but to other Latin Amer­i­can trav­ellers, who come seek­ing im­proved job op­por­tu­ni­ties, bet­ter qual­ity of life and ed­u­ca­tion, know­ing that Bo­gota’s uni­ver­si­ties are the best in Colom­bia and among the best in Latin Amer­ica.”

Trans­port is a ma­jor bug­bear at na­tional level. Un­like most other Latin Amer­i­can na­tions, Colom­bia’s econ­omy is not to­tally cen­tralised. More than ten cities have pop­u­la­tions in ex­cess of 500,000 in­hab­i­tants. Medellin is known for its tex­tile, phar­ma­ceu­ti­cal (ironic jokes prob­a­bly un­wel­come) and ser­vice in­dus­tries. Bar­ran­quilla is an­other in­dus­trial hub – and chief Caribbean port. Carta­gena de In­dias, a sul­try colo­nial jewel on the same coast, is the tourism hon­ey­pot. The three cities of Ar­me­nia, Pereira and Maniza­les con­sti­tute the “Cof­fee Tri­an­gle”.

While the even dis­tri­bu­tion of pop­u­la­tion and eco­nomic power is largely a pos­i­tive, con­nect­ing up the cities of South Amer­ica’s fourth-largest na­tion re­mains a chal­lenge. Bo­gota lies atop a 2,640m (8,600 feet) plateau known as the sa­bana (sa­van­nah), bor­dered by the east­ern An­dean cordillera (chain of moun­tain ranges). Two fur­ther densely forested An­dean ranges run north-south. The roads, con­sid­ered dan­ger­ous in the dark days of guer­rilla war­fare, are in a ter­ri­ble state of re­pair. Busi­ness peo­ple and tourists fly, even for rel­a­tively short dis­tances.

Six years ago, Pres­i­dent San­tos in­au­gu­rated the US$70 bil­lion Vias 4G in­fra­struc­ture pro­gramme. Latin Amer­ica’s largest road-build­ing scheme, it in­volves 47 projects span­ning 8,000km of roads and 3,500km of four-lane high­ways as well as ex­pan­sion of ports and rail­ways, all to be com­pleted by the end of the decade.

Duque has sig­nalled his sup­port for the 4G pro­gramme, progress of which was de­layed by Brazil’s Ode­brecht scan­dal. If he keeps his word and speeds up the im­ple­men­ta­tion, and oil prices sta­bilise and pri­vate sec­tor de­mand in­creases, growth – ac­cord­ing to the World Bank – is ex­pected to strengthen grad­u­ally over the 2018-2020 pe­riod, ac­cel­er­at­ing to 2.7 per cent this year, and 3.6 per cent by 2020.

Juan Guillermo Mon­cada of the In­sti­tuto de Cien­cia Po­lit­ica (ICP) be­lieves megapro­jects could play a key role in Colom­bia’s fu­ture prospects. “4G will re­duce tran­spor­ta­tion and con­nec­tiv­ity costs, and prob­a­bly make Colom­bia a more at­trac­tive in­vest­ment des­ti­na­tion.

“There are other big projects in line, in­clud­ing seven new air­ports, a new port in the Uraba Gulf and var­i­ous flu­vial ports along the Mag­dalena River that will im­prove its nav­i­ga­bil­ity.”

Tourism on the rise

Tourism is, ar­guably, less an in­di­ca­tor of eco­nomic health than of good PR. But Colom­bia has some de­sir­able USPs. It’s within easy reach of all the coun­tries of the Amer­i­cas: five hours from At­lanta and 6.5 hours from Buenos Aires. It’s the only South Amer­i­can na­tion with Pa­cific and Caribbean coasts, has sev­eral well-pre­served colo­nial cities, three An­dean ranges, the Ama­zon river as well as Mag­dalena, the re­gion to the west of the river of the same name that was the in­spi­ra­tion and back­drop for Gabriel Garcia Mar­quez’s magic re­al­ism. It’s also one of the world’s 17 “megadi­verse” coun­tries, ac­cord­ing to Con­ser­va­tion In­ter­na­tional, and is a favourite for bird­watch­ers.

ProColom­bia – the gov­ern­ment body that pro­motes in­vis­i­ble ex­ports – claims that, be­tween 2010 and 2017, vis­i­tor num­bers in­creased by 13.5 per cent, al­most three times the global aver­age. In­ter­na­tional flights have grown ac­cord­ingly, with Colom­bian flag car­rier Avianca – Latin Amer­ica’s sec­ond biggest air­line by fleet size and rev­enue – lead­ing the way. A re­cent tourism cam­paign as­sured vis­i­tors, “The only risk is you’ll want to stay”. But it’s not all a bed of hand-picked ex­portable roses.

US gov­ern­ment ob­servers claimed Colom­bia’s coca cul­ti­va­tion had in­creased 11 per cent to 209,000 hectares (516,450 acres) in 2017, and po­ten­tial co­caine out­put rose 19

per cent to 921 met­ric tons in the same year. In June, pres­i­dent San­tos au­tho­rised the use of low-fly­ing drones spray­ing con­tro­ver­sial her­bi­cide glyphosate – linked by the World Health Or­ga­ni­za­tion to can­cer.

Mean­while, Duque’s past links with right-wing paramil­i­taries has raised ques­tions about the fu­ture of the cur­rent de­tente. In the March elec­tions, FARC can­di­dates polled less than 1 per cent. Colom­bia’s sec­ond-largest left-wing guer­rilla force, the ELN (Na­tional Lib­er­a­tion Army), is still of­fi­cially ac­tive. In June 2017, three peo­ple died when a bomb ex­ploded in a shop­ping cen­tre in Bo­gota’s Zona Rosa; a fringe group called the Peo­ple’s Rev­o­lu­tion­ary Move­ment (MRP) was held re­spon­si­ble.

Floods, land­slides, earth­quakes and other nat­u­ral dis­as­ters rou­tinely blight Colom­bia; in­fra­struc­ture prob­lems are by no means lim­ited to the roads, and the poor al­ways suf­fer dis­pro­por­tion­ately. It re­mains to be seen if Duque will bal­ance ad­vanc­ing the econ­omy with tack­ling long-stand­ing chal­lenges such as in­come in­equal­ity and eco­nomic ef­fi­ciency.

Then there is the Venezuela prob­lem. Ac­cord­ing to the Red Cross, more than one mil­lion refugees have ar­rived since 2017; while declar­ing sol­i­dar­ity with the needy, San­tos put more troops at the border to de­ter them. If any­thing, Duque is likely to fur­ther tighten im­mi­gra­tion con­trols.

By any stan­dards, th­ese are mas­sive chal­lenges. But con­sider Colom­bia’s point of de­par­ture. In the late 1980s, if Bo­gota wasn’t the global me­dia’s “most dan­ger­ous city on Earth”, then Medellin was, or else Cali. Over the past decade I’ve been to Bo­gota five times, and once each to the in­fa­mous “car­tel” cities. In the cap­i­tal, I was se­duced by the so­phis­ti­ca­tion of the Bo­gotanos, the bi­cy­cle-only Sun­days, the en­ergy of its young work­force. In Medellin – drug lord Es­co­bar’s old fief­dom – it was the pub­lic art, eco-minded civic spa­ces and new ca­ble­car net­work. In Cali, it was the petrol-grade fire­wa­ter and the scin­til­lat­ing salsa danc­ing – which is ev­ery­where, and al­ways was, even when times were re­ally tough. You’ve got to ad­mire Colom­bia, but to re­ally know its peo­ple you also have to en­joy your­self. If you go there on busi­ness, set aside time for plea­sure – be­cause there’s heaps of it on of­fer.

“It’s an at­trac­tive city to Latin Amer­i­cans, who come seek­ing a bet­ter qual­ity of life and ed­u­ca­tion”

FROM LEFT PAGE: Plaza Bo­li­var; a cou­ple dance at the weekly Sun­day Mer­cado de las Pul­gas; Calle del Em­budo in La Can­de­laria dis­trict

ABOVE FROM LEFT: Work­ers pick cof­fee, one of Colom­bia's most im­por­tant ex­ports; un­pro­cessed cof­fee berries; the Gold Mu­seum is one of the most pop­u­lar tourist at­trac­tions

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