Investing in Colombia I - The

Caribbean

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• When one considers investing in Latin America and investing in Colombia in particular the famous words of Baron Rothschild come to mind.

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• This 18th century investor and banker is credited with saying that “The time to buy [stocks] is when there is blood in the streets.

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• .” He was talking about 18th century wars and rebellions but his words are pertinent in the New World today.

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• Specifically, Colombia is coming out of a half century long rebellion and many investors have not yet caught on.

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• This is the third of a four part series about Investing in Colombia.

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• We will deal briefly with the history of the Colombian Civil War and then look at investment opportunities in the Colombian Caribbean.

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The Colombian Civil War

• The current Colombian civil war has lasted from the mid 1960’s to the present. Rebels say they are fighting for the rights of the Colombian poor.

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• The primary rebel group is FARC (Fuerzas Armadas Revolucionarias de Colombia).

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• The rebels primarily have occupied remote areas of the jungle, especially in the Amazon Basin with occasional forrays into the cities.

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• An increasingly aggressive campaign by the Colombian government has driven FARC from the cities and forced them to cross borders into Venezuela, Ecuador, and Panama in search of sanctuary.

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• Despite the claim that FARC simply wants to improve the lot of poor Colombians they have been tied to drug trafficking.

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• Many Colombian families can name a member of two who were assassinated by FARC for opposing extortion efforts by the rebels.

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• On the other hand government allied paramilitary forces fighting FARC are also accused of drug trafficking and terrorism.

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• The good news is that the conflict is settling down and Colombian Peace Talks have begun. The time has come for investing in Colombia.

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The Caribbean Coast of Colombia

• Colombia is a nation of roughly 46million people. Its major exports are coffee, flowers, emeralds, coal, and oil.

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• As the risk, and especially the perceived risk, of visiting Colombia diminishes expect to see tourism, retirement to Colombia, and purchases of vacation homes increase in Colombia.

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• The most like beneficiary of the will be the Caribbean Coast.

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• The Colombian ministry of tourism has developed a new slogan, “The only danger in Colombia is that you will not want to leave.

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• Foreigners are visiting Colombia again and the “blood in the streets” is going away.

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• Consider Cartagena, Santa Marta, and the Island of San Andres for investment opportunities.

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Cartagena de Indias

• Cartagena is a Spanish Colonial city with an old fortress and beautifully restored old city on the Caribbean coast of Colombia.

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• Beaches are great and the people are friendly. The urban area boasts 900,000 people.

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• Cartagena has a decided Caribbean influence and is already a tourist magnet.

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• Cartagena is a great place for a first visit to Colombia and offers real investment opportunities in real estate and business when investing in Colombia.

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Santa Marta

• Santa Marta is a city of 400,000 farther to the East of Cartagena, also on the Caribbean. It is also a colonial city, founded in 1525.

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• . It is a tourist Mecca for Colombians and other Latinos with its spectacular beaches, nearby Santa Marta mountains, nature preserves, and colonial architecture.

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• It offers the same mix of opportunity for investing in Colombia for tourism and real estate related businesses as Cartagena.

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• However, Santa Marta has been more strongly affected by the armed conflict.

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• On one hand this may lead to a concern about personal danger.

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• On the other hand investment opportunities will likely multiply more strongly here than in Cartagena.

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San Andres Island

• Although the island of San Andres is Colombia it is a coral island in the Caribbean Sea, closer to Nicaragua than to Colombia.

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• Here the concern of armed conflict fades to nothing in the Caribbean sun.

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• Although investing in Colombia in San Andres is certainly possible, don’t expect a jump in prices and economic activity when peace breaks out.

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• The island is already peaceful!

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The Rising Colombian Peso

• The Colombian peso has outperformed all other currencies versus the US dollar in 2012.

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• For those interested in offshore investment and offshore banking, Colombia may well be the place to be as its economy takes off.

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• For more about investing in Colombia, read Investing in Colombia I – The Caribbean, Investing in Colombia II - Bogota, and Investing in Colombia IV - The Amazon.

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