When I interviewed Colombian President Juan Manuel Santos last year in Bogotá, he crowed about foreign investment pouring into his country. A nation considered a failed, civil war-torn narco-state less than a decade ago was now one of South America’s hottest money magnets, doubling its take from the previous year.
“This is completely out of anyone’s imagination,” Santos said.
Yes and no, I thought. Colombia has been fighting drug lords and Marxist guerrillas - especially the Colombian Revolutionary Armed Forces, or FARC - for half a century now. But by the time Santos became president in 2010, the country was a significantly safer place for international capital, thanks to a decade-long military offensive (thanks in turn to $5 billion in U.S. aid) that has weakened the narco-cartels and put the FARC on the ropes. So it was not out of anyone’s imagination that investment was returning so robustly.
Colombia scored $15.5 billion in foreign direct investment (FDI) in 2012. It also inked a free trade agreement with the United States. It’s a founding member of Latin America’s major new Pacific Alliance trade bloc. And it’s now South Florida’s No. 2 trading partner: Colombia and Miami are expected to do more than $10 billion in commerce this year – only $6 billion less than Miami’s trade with Brazil, a market four times Colombia’s size.
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But even Santos knows that if Colombia wants real investment – the kind that thrusts a developing country toward real development – then it needs more than just an advantage over the FARC. It needs peace with them. It needs to disarm them for good. It needs a real end to a war that has killed some 220,000 people and left five million more displaced.
“I describe [the conflict] as a mule in the middle of the road that doesn’t allow the real potential of Colombia,” Santos said this week at the University of Miami – the kind of visit that doesn’t hurt his prospects for re-election next year since Colombians are now Miami’s second largest Latino community.
So Santos last year proposed peace talks, and the FARC accepted. Few expected much: The FARC is notorious for less-than-honest dealing, and Santos can't concede much without feeling political heat from Colombia’s right wing – especially from his old boss, former President Alvaro Uribe, who virulently opposes the talks.
But to everyone’s surprise, the negotiations taking place in Cuba have moved forward. Last month the two sides agreed on the FARC’s post-conflict participation in Colombian politics. Now, because the FARC is as much a cocaine and kidnapping mafia as it is a guerrilla army, they’re discussing its renunciation of those criminal activities.
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That progress is generating increased investor optimism. One of the best gauges is the rising FDI flow to a sector you’d think would be stunted in war-torn Colombia: tourism. Last year the hospitality industry brought in $1.6 billion – and a lot of it came from Miami, a place that knows a thing or two about tourism and the conditions it needs to thrive.
A prominent example is Brilla Group. The Wynwood-based private equity firm specializes in hotel and resort development in Florida and Latin America, and last year it put together a $32 million hospitality investment fund for Colombia – the first of its kind there. Brilla CEO David Brillembourg acknowledges that growing peace possibilities are encouraging that kind of venture capital.
“I think absolutely the trend toward a potential solution [has] allowed a lot of people to come in with a much more positive view of a safer, both physical and legal, framework to invest,” he says.
Brilla’s Colombian Beachfront Hospitality Private Equity Fund is focused largely along Colombia’s Caribbean Corridor, especially in Cartagena, the country’s coastal jewel. But Brilla managing director Yrene Tamayo says the firm is eyeing the country's sublime interior beauty as well.
“Colombia is not only a coastline,” says Tamayo. “The Eje Cafetero, the coffee area, is one of the most spectacular sites. We are looking forward to [expanding] our investment geography in the future.”
My colleague John Otis, a Bogota-based journalist and author of "Law of the Jungle" about Colombia’s guerrilla war, even took his family to Macarena National Park recently – something that would have been unthinkable a few years ago. “This is a place where I used to interview guerrilla leaders, and when we got there we were greeted by smiling tourist guides,” says Otis, who sees vast eco-tourism potential.
Colombia could certainly use more zip lines than battle lines. But even if peace comes, tourism won’t solve the country’s most entrenched problems. Much of its road infrastructure is barely 20th-Century let alone 21st. Its economic inequality remains Latin America’s worst.
Santos warned in Miami that peace is hardly a sure thing: Quoting an old Colombian saying, he said bread can burn even at the door of the oven. Still, as he left to visit President Obama in Washington this week, there was a palpable if cautious sense that Colombia is for once making more bread than bloodshed.
Tim Padgett is WLRN's Americas Editor. You can read more of his coverage here.
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