The Old Colombian Almanac 2019

So we have reached the end of another year, we are in the final days of 2018 and we have reached that pivotal moment when Colombian women start fishing at the bottom of the draw for their yellow underwear for the New Year's Eve party, google it, and more importantly for the 13th edition of the Old Colombian Almanac - the data and graphic free view of this box of frogs country that has been my home for more than a decade and which provides more frustration every year.

Blah...blah...blah...blah..........

I was sat in the countryside last weekend with a group of ex-pats all of whom have been in Colombia for over a decade and whilst understanding the thinking I was dismayed to hear the following phrase : “I came here so full of hope, arriving in a country that was slowly turning itself around…..but now I think Colombia will never make it, what we are seeing now is how it will be forever…” Amongst the reasons discussed were the corruption at every level of society, the ongoing campaign by the ‘haves’ to make sure the ‘have nots’ don’t threaten their status & the simple inability to think long term which bedevils almost every facet of society This was a brutal dissection of the current situation and the premise when looking from a distance is hard to dispute – there has been amazing progress in Colombia over the past decade, it has found economic and political stability, its corporations have expanded all over the region and become leaders in their sectors and in large part it has shrugged off its image as the drug capital of the world which in conjunction with the peace process has led to the start of a tourism explosion – but the conclusion was a deep frustration because Colombia should be so, so much more. I am perpetually asked by the kids for new computers because they are too old and slow - of course the answer is that they have filled them with video games and other such junk and a simple visit to the technology workshop down the road solves the issue as you clean out all the garbage and finally hit the re-boot button. That is how Colombia feels to me - it is like a laptop jam packed with red tape and bureaucracy with the virus of corruption running through it, you just want to grab it and hit the re-boot button, as a SimCity fan you know that all the component pieces for a successful, wealthy country are here but they have been lost in the mainframe and no-one knows how to get things working efficiently anymore. Taking as read that you cannot reboot a country of 50 million people (give or take 5 million if you believe the census figures) then all you can do is start taking steps down the path that leads to a more promised land - of course here we are taking about a nirvana but if you don't start you will never get there. I will set aside much of the economics here because whether rates are at 4.25% or 5% come December 2019 or Inflation is at 4% or 4.5% or even if GDP growth is 3.3% or 3.5% the fact is we have a manageable situation thanks to the institutions such as the Central Bank – of course there are issues to address and we will come across them but that for Colombia is not where the battle lines lie at this moment in time. What follows are a few areas where the new President could make real progress if he has the conviction - of course getting them through a Congress awash with self interest is a battle but herein lies the opportunity for a legacy, which for a man polling sub 30% approval levels would be quite the turnaround, it is not an exhaustive list but one instead where short term progress can be made.

CORRUPTION : President Duque has to take the bull by the horns and drive through the political reform program demanded by over 11 million people at the ballot box a few months ago - sadly the long tentacles of Congress have already led to the reforms being diluted but there is still enough left to show the populace, who always highlight corruption as their biggest gripe when polled, that here is light at the end of the tunnel. The country is tired of seeing constant headlines of Congress members, Mayors and Governors being investigated or jailed for graft – the population will continue to fail to turn up at the ballot box until such time as they believe that the candidates offered up can provide change as opposed to providing headlines.

TAX REFORM : Whilst there is tax fatigue the simple truth is what we have just experienced is not a reform, it is the equivalent of a sports team changing formation, what the country needs is a new team, new structure. The tinkering we have just witnessed was close to a waste of time and only served to antagonize millions of people to little end – they need to be antagonized for sure but to some end. 2019 needs to be the year when experts (real experts including international agencies) are sat down together to hammer out a proper ‘reform’ which looks 5, 10 or even 20 years into the future. We have just seen an opportunity missed but here is my simple-simple plan : Income Tax for all – every single person in Colombia who earns a salary, taxed at source on a scale of 50% down to 0.05% for those on minimum wage – this is a society where everyone should contribute and accordingly have the right to complain when the free health care isn’t working or if there is no schooling in the countryside. The current system of 3-4 million people supporting a country is not sustainable, leads to resentment and the use of very creative accountants in order to pay as little as possible.

COMMODITIES : The country is hiding under the pillow when it comes to commodities, people procrastinate over oil production and the latest Brent price for hours and about how this effects the Peso or the stock price of Ecopetrol – Colombia needs to get off this particular hamster wheel as quickly as possible. Electric cars are coming, oil will run out and if measures are not taken locally then a financial crunch is going to occur. By all means try the offshore and the best of luck with getting Fracking licences past the local communities but the time is coming when Colombia will need a new cash cow. Oddly there is a ready-made replacement lying under the mountains of Colombia, it is a bright and shiny substance that has already helped Peru put itself on its feet but for some reason in this country we have a gold sector which has been almost completely neglected by the authorities. A decade ago there was so much optimism with foreign companies pouring in, investors came to visit and there were multiple listings in Toronto and it has come to next to nothing, an appalling waste of time and potential income. There are other assets sat under the soil such as copper (useful for the electric cars) and of course coal which has fared relatively well but it is gold where there needs to be change. The biggest change is that those same foreign agents and stakeholders need to be at the top table guiding a Government which as per past administrations seems to be lost. This is an immensely complicated area with illegal & informal mining as well as local communities to be considered but it is a gaping opportunity for the country. President Duque made all the right noises during his campaign but has hardly mentioned the them since - in fact the courts have taken a draconian step in suspending all new licences - all this is familiar territory to those who have been operating in the sector for many years. Simply put the Government needs to create a think-tank, not of the same bureaucrats and life time politicians who don't know the gold sector but one that features quasi fossilized geologists and beefcake miners who are already working on their third continent. These people need to be heard, for them to explain what they are here to do, how they are already helping the communities and of what they need in order to drive the sector forward.

EDUCATION : If there is one area where President Duque has the opportunity to leave a legacy it is by putting public education fully on its feet – he has already made a potential first step after sitting down with the protesting professors and students, now he has to consolidate that by finding the money from somewhere to provide educational democracy. Words cannot describe how important this is - Colombia is not making the most of its human capital, talent is slipping through the net, how many smarty, young people are currently working the fields because the local school had neither the resources or direction to educate them property and tragically any career prospects died at 16. The country is moving forward in business terms however the country is succoring from relatively few private universities which are easy enough to qualify for proving you have the money (in their defence they do offer some scholarships) - there are a few superb public universities as well but whilst they provide high quality graduates due to the very competitive selection process there are simply too few of them. The question of course, which no-one wants to discuss locally, is whether those at the top are genuinely interested in educating the masses knowing that whilst this would undoubtedly be beneficial to the country as competition increases, would arguably damage the job prospects of their own offspring ? It is a sticky conundrum which is not unique to Colombia as Latam is notorious for this issue but one where with relatively little outlay President Duque could make a genuine difference.

AGRICULTURE : Two of my favourite, if wholly predictable and depressing, statistics of 2018 came from Oxfam : 81% of rural land is owned by 1% of the population and of those who own a large spread fully 43% can't actually quite remember how the land came into their ownership - the consolidation of land accelerated dramatically after 2002 as the Paramilitaries and FARC fought over the countryside. Colombia is a bread-basket, a hot-house, for the more religious a garden of Eden - if Jack had really climbed a beanstalk no doubt those beans went into the ground somewhere in Colombia. There is a reason why coffee and cocaine are equally successful in this country, it has a close to perfect growing climate but there has been a collective failure to capitalize on this asset which economically could be a national treasure. This area is one where the President would most come into conflict with his own supporters, many of the land barons sit within his own party or those allied to him and it is they that have to be convinced, or told, that things have to change. Historically due to violence the countryside has emptied and created an urbanized society, their land stolen from them or negotiated away under duress, now they have nowhere to go back to. There are a variety of options, none of which will be overtly palatable however land is being misused, inefficiently used or worse still not used - this cannot go on, the country cannot afford to have an asset like this lying fallow when there are 10's or 100's of thousands who would gladly till that land if they has the opportunity.

PEACE : In terms of the peace process a simple message - find the cash and drive the ongoing FARC re-integration to its natural conclusion and stop them slipping back into old habits, having spoken to those sat in the camps that is what they want, they need training and time, no more than that - it is simple as that, the military officers at the same locations want precisely the same. In terms of the ELN, get the talks underway, bite the bullet. get them off the battlefield as soon as possible because even after that there are 1000's more armed terrorists working for drug gangs that need to be neutralized. There is nothing wrong with "putting a little stick about" as the original House Of Cards would say and the demise of Guacho this past weekend was a good example of this, the FARC at least have been given the opportunity to lead a peaceful life and the vast majority are however if you chose to continues killing then on your head be it.

CONCLUSION

That really is about it for 2019, if the above reads as if Colombia is a basket-case then you are overtly sensitive, there is simply plenty of work to do and with that work comes opportunity - and that is true of plenty of countries spread around the world, some of them with a far fewer excuses than Colombia.This is a land of opportunity which has achieved so much already but with just 10% more of collective will can achieve 50% more. Colombia is a complex place, scarred by conflict but getting back on its feet gradually (after all if Tyson Fury can get up anyone can) - the frustration lies in the fact that despite poverty having dropped significantly since 2010 it could be lower, the GINI coefficient where only Honduras fares worse in the America's is a testimony to what has already been mentioned and the lowering of that rating should be a short term goal. Whilst it is his name above the door this can't all be done by Ivan Duque, it needs to be a collective effort which needs to be guided from the presidential palace, he may or may not achieve the goals but as Mr Tennyson once put it :

"It's better to have tried and failed than to live life wondering what would've happened if I had tried..." This year I was lucky enough to stand next to President Duque's predecessor after he received a peace prize in a far off land - we all know it is not a perfect peace and there is work to do but at least he won't spend the rest of his life wondering. And with that it just remains to bid each and every one of you a very happy and safe holiday, whatever you do or don't celebrate, and a very peaceful 2019.