Colombian Update : Whats New (s) : 4Q, Opinion Poll.

RURAL ALIENS

A few weeks ago I opted to take the alternative route back from my weekend retreat, not through choice but instead due to a landslide caused by the winter rains which have caused so much damage to the roadways, when rounding a curve I found myself in the middle of a Tom Cruise movie - not as you might be thinking 'American Made´which was pretty good, but instead 'War of the Worlds' because suddenly reaching up from the middle of the vegetation high into the sky was a monster I had never seen, just staring down at me - his name is 4G and apparently unlike those nasty aliens who died of a cold he is here to stay for the long term. There has been much procrastination over the years but alongside the peace process the 4G program will be the legacy that President Santos will be remembered for, he may not get to cut the ribbons in a few years time but the 1000's of kilometers of highways that will eventually criss-cross will have his seal. Santos may not have poured any concrete but he had the long term vision to think beyond his own administration and in parallel organize the den of iniquity that was INCO into the ANI under the professional stewardship of Luis Andrade - the rest will be history. We have been discussing the progress of the 4G projects for so long that it has now been forgotten just how ambitious the plan was when first conceived. On Thursday we had an update from the ANI who informed us that fully 21 of the 30 projects have now broken ground and when I met with the FDN recently they let it be known that things are moving along nicely - there were many doubters at the outset and whilst we may be behind schedule we are still ahead of where many predicted we would be and that is without factoring in the Odebrecht scandal while put loans in the deep freezer for six months or more. They also touched on the subject of licensing as obviously huge swathes of property need to be purchased and it has been a prickly subject with the local communities not just with infrastructure but also mining & oil however progress is being made. Whilst on the face of it they have only bought 7% of the 18,222 sites needed this actually represents around 68% of the land-bank - there is still plenty of time to get the rest done and of course there are alternatives such as expropriation available. The size of the program is US$19bn approx which to place it in context is the largest in Latam with the nearest equivalent being Brazil which stands at US$12.6bn - of course the reasons are well documented. To steal a term from my ex rugby captain who once told a player that he was in only in the 3rd XV because was there was no 4th XV, the only reason Colombia's infrastructure is considered 3rd world is because the 4th has yet to appear. Only a few countries are ranked below Colombia globally in terms of highway infrastructure and that fact that according to the FDN it costs US$1808 to move a goods container domestically when in Peru (US$280) & Chile (US$400) it costs so much less speaks volumes. According to the same FDN the financing is coming along nicely - of the US$19bn in 2016 we saw US$4,2bn covered, a further US$1.03bn last year and the projection is for US$3.6 in 2018 - this would bring is to approx 41% of the total cost covered, it is important to note that this figure is effectively higher because not all the money is required up front and also as they deliver stages of the projects they will receive cash from the Government. All of this of course funnels into the vital construction sector where the cement and concrete companies are anxiously standing by the mixers and kilns to supply the boom - it is coming, at the moment there are huge amounts of earth being moved but soon enough the bridges and tunnels will be needed. So in short we can expect to see far more aliens appearing all over Colombia but as opposed to being The Day The Earth Stood Still it will be the day Colombia got moving.

DONE & DUSTED ?

So we have our first post election opinion poll and there is no surprise with Ivan Duque sitting on 55%, Gustavo Petro on 35% and 10% for 'Votos en Blanco' - this was much as anticipated given that Sergio Fajardo has decided to sit out the second round which very much opens the door for Duque, it is still debatable as to whether if Fajardo's support would have pushed Petro over the line anyway but his decision basically guarantees a Duque Presidency. Yesterday post his decision the social networks were alive with opinion with regards to Fajardo's decision and in general the comments were supportive -there is simply no reason for him to jump on board with anyone, he is in a powerful position, the country is sliding steadily to the left and he is not interested in being a minister - his time will surely come if he chooses to remain in the game. His biggest concern will be minority rights and the peace process however as I wrote before those much more closely involved with the latter think there is very little to be done - firstly in terms of the legislation passed by the Congress around 75% of all the bills approved were not related to the FARC but instead supporting conflict zones and those people living there. Secondly the international agencies and institutions will be watching like hawks - they have invested a huge amount of money in the process and spoken in glowing terms about the advantages it brings, any dismantling of their work will call into question if Colombia can be trusted. The good news for Duque is that in terms of the economy he is walking into a Clintonesque scenario whereby Cardenas and his team have put the train firmly on the track displaying the kind of discipline which is the envy of most Latam countries. Oil also remains in a sweet spot for the Government and that 'fingers crossed' should bring a nice dividend check in early 2019 - what they do with that extra money will speak volumes. One plus would be the return of Alberto Carrasquilla to the Cabinet, he already served as FinMin between 2003-2007 and whilst it is only as of yet 'possible' he would be a welcome face in whatever capacity who did good work last time around - he left in 2007 reportedly because then President Alvaro Uribe wouldn't stop pestering him - if that was the case then this time around lets hope he is left in peace whatever his position. Footnote : He will be replacing Mauricio Cardenas who has done great work during his stewardship and was recognized by his global peers as being one of the best in class.