Colombian Update : Fajardo, EPM, Unemployment, OECD.

WHO WOULD BE A POLITICIAN ?

For a man that struggled to find room in the Petro-Duque sandwich over the past six months, we suddenly find that Sergio Fajardo is suddenly Colombia's most talked about person, suddenly everyone wants to be his friend again, even those who turned their back on him - 4.8mn votes tends to do that to a man it appears. What we will he do ? What is he thinking ? What is having for lunch ? What is he binge-watching on Netflix ? Actually scrap the last one - perhaps which doorstep size book is he ploughing through - in short he is everywhere - I mean really has the World Cup been canceled ? Can he be the king maker ? We certainly know that the votes his coalition party accumulated this past Sunday if added to those of Petro could well lead to a socialist presidency however this is one amazing country when it comes to the dark art of politics.

• Fajardo's Colombia Coalition Party has a sizeable contingent from the socialist Polo Party - it is hard to imagine they won't support their former colleague Petro.

• Fajardo has already declared he will not run again in 2022 (don't we all wish we had a dollar for every time a politician uttered that phrase) so will he be bothered to support anyone - if we take him at face value there would be no slingshot effect in the eventuality of a successful administration.

• I hear the phrase, a valid one, that Petro is a vote for the peace process and so Fajardo's people should make that choice - in fact a commentator today on the radio said he expected no pronouncement from Fajardo but that the vanquished candidate would vote privately for Petro for that reason.

• Does he have other ambitions ? Could he seek to win the triple crown in the form of the Bogota, Cali & Medellin Mayoral races in late 2019, it certainly can't be ruled out and would offer a tremendous base for 2022 - or will he simply return to academia and/or the speaker circuit overseas where he much in demand to talk about Medellin's renovation.

Whatever he chooses to do for the next days, weeks, months or even years he is going to be as big a force as he wishes to be in the future of Colombia - the simply fact that he won in Bogota dictates that. I would expect him to allow freewill in the second round because I don't think either Petro or Duque would publically give him the concessions he wants in order to back them - then again when I look out of the window I see Colombia.

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I won't say you heard it here first but EPM finally made mention that they may need to sell assets, a very vague reference was made but as you will have read here it is a decision that should have been made a long time ago out of freewill, not need. This is one of the largest, most successful companies in the country but it is subject to the vagaries of the political system - it is time to inject more professionalism, transparency and stability into the company. Ecopetrol should act as quasi role model in this respect, yes the Government still holds control and there is still a lot of work to do but when billions of dollars are owned by investors and analysts have full access to the data things tend to move in the right direction. It would be folly to sat that EPM hasn't been a success over the years - the sheer size of the entity tells us it has but as per all things that grow there comes a time when things changes and surely that time is now. These comments came against the background of a deterioration in the situation with the project fully evacuated and once again those suffering downstream being moved to higher ground - we are on full alert once again, god willing (or whoever you pray to) none of this comes to pass but the integrity of the project is being questioned again and the prospect of a 25 metre wall of water coursing down the Cauca valley is once again occupying a lot of people's minds. https://colombiabyroops.wixsite.com/website/single-post/2018/05/19/Hidroituango-Mother-Nature-Bites-Back

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Yesterday we saw another decent unemployment print for April at 10.7% - down on April 2017 when we were modestly higher. If there is one thing that has mystified me over the years in a country where drugs, violence and corruption have been a constant it is those Gallup polls that tell us the local populace's largest concern is jobs - of course jobs matter, in the end it is what pays the bills but we are looking at a surging population and unemployment dropping. In 2000 the nation's population stood at 40.2 million and this year we will hit the 50 million figure, an increase of 23.88% - versus that average unemployment in 2000 stood at 16.99% versus a YTD figure of 11.63%, over the past 8 years the improvements in the jobless numbers have been more modest however once again the population has increased 11.13% over the same period - good work has been done. Overall (as per any other Latam country) I wonder how close these numbers are to the reality - are the higher or lower, many don't declare for fear of paying taxes whilst other declare work which barely counts as a proper job - but try and get any kind of basic manual labour here or even craftsmen - it will be a discussion over money and when/if they can do the job. Some see unemployment increasing over the year and much of this could be down to the demographics of a young population however again in both April and YTD we have seen encouraging job creation and the macro environment is improving steadily - in terms of jobs as opposed to wages there is the prospect of ongoing expansion in labour intensive sectors like construction and commerce.

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Finally for today Colombia is being formally welcomed into the OECD club in Paris - it will be country number 36 in this exclusive club and whilst this is a landmark moment it is a starting point for the country as opposed to a finishing line. This is another achievement that President Santos and his team can be proud of and whilst this 70 year old organization contains the great and the good of world economies Colombia has no reason to feel it has somehow slipped in the back door as a beneficiary of a new open mindedness of the OECD, it is a country which has arrived in spite of its troubles at a table where it should and could have been sitting decades ago if history had taken a different direction. There is clearly a lot of work to do, the OECD even lowered their GDP estimate for Colombia on the same day from 3.0%-2.7%, but if we look down the list of current members there is no reason why a more peaceful, equative Colombia cannot match or outperform some of those countries already in the club.