The resurrection of Colombia in the eyes of the international capital markets seems to be well under way. The country, which hung on to its investment-grade credit rating until 2002, continues to suffer from internal instability and a steadily rising debt burden.
But interest in Colombia is reviving as president Álvaro Uribe’s first term in office comes to an end and GDP growth looks set to hit 4% this year. The stockmarket has doubled in value in the past 12 months – the best performance in Latin America – and the government has been very successful at borrowing internationally in local currency.
And Colombia is now a hot destination for companies looking to expand into Latin America. Last month, French retailer Carrefour announced that it would invest $100 million there next year. The company will build at least five new hypermarkets as well as modernize its supply chain. In July, global beer firm SABMiller announced a $7.8 billion deal to buy Colombia’s largest brewer, Bavaria.
Silver lining
Even the rise of terrorist groups from 1998 onwards had an unexpected silver lining in the form of a strong and stable currency. Historically, remittances to Colombia from abroad (mainly the US) have averaged about 1% of GDP a year.