Saturday, November 29, 2008
Colombia...Myths & Mystique
As my wife and I are in the middle of another visit to Colombia this week, visiting her relatives and pursuing some business opportunities; I am compelled to communicate some fresh observations and comparisons of this dynamic country with both Panama and the USA. First a few general points of interest on Colombia itself...
Colombia is the 26th largest nation geographically in the world and the fourth largest in South America (after Brazil, Argentina, and Peru), with an area more than twice that of France. It also has the 29th largest population in the world and the second largest in South America, after Brazil with over 44 Million people. Colombia has the third largest Spanish-speaking population in the world after Mexico and Spain. Their style of Spanish is the most Castilian, or pure, Spanish after Spain itself. You could argue that Colombia was probably the most heavily influenced country in Latin America of Spain's culture during the days of "Conquistadores".
Colombia's location with the equator and its substantial variety of elevations and climates provide this unique country with a large range of climates from year around snowy peaks to tropical rain forests and beaches to dry, arid deserts. Its three largest cities of influence are Bogota the capitol, Medellin the city of eternal spring, and Cali, a significant trade center near the largest Pacific port of Buenaventura. In the last few years I have personally gotten to know Bogota, my wife's hometown, Medellin and Cartagena. We have been in Bogota these past few days and will spend three nights in Cartagena starting Sunday.
Bogota and its municipalities have an estimated population of 8,244,980. In terms of land area, Bogotá is also the largest in Colombia, and its altitude (2,640m) makes it the third-highest major city in the world, after La Paz and Quito. Higher than Denver and Mexico City...so you really sense the thin air the first couple days you are here, especially arriving from the sea-level resident town of Panama City. This factor also makes it quite cool and rainy compared to the other major cities in Colombia though this close to the equator they don't get snow at this elevation. You have to dress warm and this time a year carrying an umbrella is recommended. Bogota is a robust, clean and well organized city. The public transport system is modern and effective compared to other major cities I have known and the highway system about town is contemporary as well though this trip I notice more road deterioration on the secondary roads than my last time here. The good news is there is a LOT of road work going on with a number of them closed during reconstruction. That makes traffic heavier than normal on other routes, but hopefully once the projects are completed will bring some relief to the congestion as well. Taxis are plentiful, new and cheap as well. Most trips cost around 6000 pesos...or $3 USA (current exchange is roughly 2000 pesos to the dollar which has fluctuated up and down about 20% this past year with the dollar value gyrations).
Bogota is the center of the county's economic, governmental, military and cultural systems. The many Colonial buildings, many dating back to the 1500 and 1600s, are beautiful and "built to last". (See wikiepedia's profile on Bogota and many nice photos of the city HERE). Most modern structures are of beautiful golden colored brick laid by fine artisans of bricklaying. Buildings 30-40 years old look like they were built last week...maintained very well. The people dress very well here though of course there is still the vast divide between the classes, rich and poor. But overall, Colombia has a robust economy and second highest GNP in South America after Brazil.
We are setting up business in Colombia as an expansion of our Panama business efforts. While Colombia is a much bigger, diversified market than Panama...it has a bigger culture gap than Panama and Costa Rica with North America. English is not as widely spoken here and because of the past decades of civil unrest with a couple guerilla factions who have been profiteering on international drug trade...mostly selling to the US...Colombia has historically been seen as a violent, dangerous place to travel or do business. That has been changing drastically these past 6 years especially because of strong leadership of the current President Urribe. Most of the Colombians are very supportive of this current administration and the cleaning up of the guerilla activities which are now largely relegated to outreaching jungle corners of the country near the borders of Venezuela or Ecuador which give these elements a place to run when tracked down. The borders are not secured it seems. This past year the masses of Colombians worldwide have finally become very activist in pushing for eradication of the guerilla factions and release of the hundreds of political prisoners these forces have kidnapped. I have always felt that it takes a whole majority population to empower these kinds of changes versus just waiting for government leaders to do something. There was another large mass demonstration against the FARC movement on Thursday pushing to release more prisoners before the holidays. The momentum is on the side of the "good guys".
The productivity and cleanliness I see in Colombia is testament to the culture and work ethic that I perceive as being much stronger than in Panama or Costa Rica where we have been operating the past 6 years or so. I would not want an employee based business in either of those two countries because of the socialistic employment laws and general laziness and lack of ethics in the general populations. Colombians on the other hand are far more productive and energetic towards progress as far as I can observe. Those that are in Panama or Costa Rica truly stand out in their service attitude and intelligence from the natives of those countries. While some could say I might be biased by marriage, I am basing this on what many other peers of mine have observed in these markets as well. The Colombians smile and are more open than most of the other Latinos I have interacted with. Education is highly valued here, and healthcare is at a very quality level...and INEXPENSIVE. Many foreigners are discovering Colombia as a quality and inexpensive destination for healthcare, especially in the areas of plastic surgery and dental care. I have a friend who came here with us who needs major dental reconstruction work. His quote from our Doctor friend was $3500 compared to over $25,000 quoted in the USA. The x-ray machinery used was very modern compared to what I have seen in other Latin markets.
Cost of living in Colombia, and Bogota specifically, seems to be a mixed bag. The cost of vehicles and gas to run them seems a bit higher than Panama and of course the USA. The "sin taxes" are heavy here on alcohol, wine and other imported goods. Cigarettes are half the price of the USA, but smoking has been banned in most public places in Colombia like was recently passed in Panama. The costs of real estate here seems to now be a better value per square meter than Panama, and from my observations of the comparative construction sites I think the quality is much higher in Colombia. They also import less of their construction products since they have a broader industrial and mineral production base in Colombia than Panama or Costa Rica has. They have significant industrial production of cars and other machinery here including General Motors, Kellogg and other international manufacturers and distributors to this region based in Colombia. That provides a broader range of import/export than most other countries in Central and South America.
Politically, Colombia is a presidential representative democratic republic as established in the Colombian Constitution of 1991. The Colombian government is divided into three branches of power; the executive, legislative and judicial with special control institutions and electoral institutions. The President has the most power and the current President has the highest rating in recent generations. The country seems to be moving forward with a fury after decades of conflict, corruption and indifference. Many Colombians who fled political prosecution or threats from guerilla factions are starting to return to their home country. While many found success and more income living and working in the USA and Canada, many have not been successful in adapting to those cultures and miss their families and homeland. I predict that with the rising economic crisis and loss of jobs in North America, many will find the prospects of returning to Colombia a positive idea. Profits are going down and taxes going up in the USA, which will more than likely squeeze out the poor and many in the middle class who were up and coming in that system.
There are a few myths about Colombia that I want to address. Colombia's greatest problem is the international "perception" that it is grossly violent, corrupt and "backwards". To be sure, there are zones and remote areas still controlled by dangerous and rebellious factions who have staked their lives for generations on the principles of "revolution" and "revolt"...class warfare if you will. I'm sure there were times and circumstances justifying much of that sentiment in history. Unfortunately, over time these causes get worked out or absorbed in the society and the "revolutionary" wakes up one morning to find himself quite outnumbered and unwanted. The human reaction in many of these cases is to "continue the cause" at whatever the price and they build their whole identity as a revolutionary for only "revolution's" sake. In addition there are many external factions or powers that take advantage and manipulate these "revolutionaries". There is much evidence of this now between Venezuela's President Chavez and other political forces in Ecuador who seem to be giving harbor to Colombia's "revolutionaries" and supporting them with arms and supplies to carry on their crusade. Just this past year, Ecuador and Colombia almost went into direct combat at the border they share because of a squad of Colombian military who took out some FARC leaders just over the border in Ecuador. One should see both sides of this issue where borders should be respected, but the neighboring nation also should respect their neighbor and keep their neighbors enemies from using their territory as well. One has to naturally ask the question why a neighboring country would give shelter to the enemies of the state.
There are so many interesting international political issues to discuss; there is neither time nor space to cover them all here. Let me focus on a couple main issues that should be considered between Colombia and the USA.
Colombia and the USA have had a fairly long history of peaceful and meaningful interaction. The USA government under Teddy Roosevelt brokered the separation of Panama from Colombia back at the turn of the 20th century. The USA's primary interest in that was obviously the construction and control over the Panama Canal. It seems to me Colombia just went on its way without too much reaction to building of the canal. Colombia has maintained a balanced international relationship with both Spain and the USA while retaining sovereign distinction. Culturally they are more like Spain. Economically and lifestyle wise, consumerism has caught on here as well from the media and political exposure to the USA. The cities are becoming more and more cosmopolitan and the younger generation is catching on quickly to technological advancement and North American style consumerism. This is a double edged sword as we start seeing the breakdown of many cultural traditions such as family values and professional education in exchange for the making of a quick buck and living just for the "NOW". Divorce is on the rise and some of the youth culture represents to me futilistic expectations based on the failed establishment and the emptiness of their new material world. There seems to be a competition internally now between the Colombians finding their "soul" and unity in relationship to the historic internal conflicts, while experiencing bigger generational gaps and less family unity in both business and home life. It is like Cosmopolitanism comes with the cost of lost traditions...and everyone starts wanting to be alike on the outside while being a little "hollow" on the inside. Many moderns exchange reading books and interacting within their families with pursuing quick wealth and outward appearances of new cars and homes with the latest trimmings. While the goal of economic prosperity is not a negative, to sell your soul or identity to get there probably is.
Many friends and family members have often expressed concern about my security in traveling here. I have to say I feel more secure in Colombia's major cities than I do in the USA's major cities. Sure, there are bad factions and neighborhoods to avoid...but overall there is a strong police and military presence that seems quite focused on "keeping the peace". They don't seem to be so much about the little infractions of traffic and misdemeanors as they are about keeping the citizens safe from robbers or terrorist type elements. If you look at things realistically, there are fewer guns here per capita than in most USA cities and it is much harder to buy/find one. It would be interesting to study the number or levels of USA gangs and felons to the number of Colombian "gangs" and guerillas. It is estimated that the FARC, Colombia's largest revolutionary group is down to about 4000 members now. Compared to USA's gangs and drug "bad guys", I would guess the factions there are a higher percentage of people per capita than in Colombia. There's a little research project for someone to take on...
The biggest barriers to entry in Colombia in my opinion are language and currency differences. If you don’t speak Spanish here and not accompanied by someone who does, you will find it hard to find your way around or take a taxi somewhere. Most business hotels have English speakers somewhere near the front desk, but in the restaurants or other service levels, hard to find. The other mystery to me is why the banks and laws do not allow foreign currency accounts such as US dollars. To exchange money is an expensive and laborious process here. The banking process is very bureaucratic and difficult for establishing accounts. Unless you "know somebody", a foreigner or foreign company is hard-pressed to establish a banking relationship...and they are definitely about "knowing your customer" which has been driven by the USA banking system post 9/11. That is probably a good thing to a point, but to put so much interference in establishing business relations that it gets to a point of defeating the purpose, you find many foreigners just going away without established business relations here.
An upside to the financial systems here is that Colombia is not as exposed to the current global financial crisis spurred by overextension of credit in the USA. Mortgages, known here as "hipotecas" are a fairly recent phenomenon as most people own their homes or condos outright and passing them down through generations. Credit is expensive and not as freely given here as in North America. Banks will rarely lend more than 70% of the purchase price...and most loans are based on 50% cash deposits on the line. That keeps business and consumerism on more a "cash" basis than a credit one. As Americans are now discovering, that is not a bad trait to return to. But, those traditions are also arguably keeping Colombia behind the curve of international trade and tourism. A couple sources have told me that Colombian authorities are now reconsidering their positions on currency and banking laws. I hope they do establish more international currency friendliness because as I do business here, I would like the option like I had in Panama, Costa Rica or Mexico to have dollar accounts and not have to constantly wrestle or plan for currency swings when I enter into future contracts.
I also hope to see continued free trade relations pursued between the USA and Colombia. I am concerned that the Democrats in congress have blocked the current free trade bill that has been pushed by President Bush and been in limbo for months now. As I've stated in other blogs here, I am not a proponent of government or state led trade relations between countries. These "free trade" agreements tend to be more about mutual protectionism and intergovernmental cooperation than about true free trade between large and small businesses in the various countries. I would like to see these agreements hacked out by real business counsels on both sides of these agreements who are the true producers and traders in the various countries. Having bureaucrats in the middle politicizing all transactions is NOT my idea of FREE trade. That being said, something is better than nothing at this point in the game, so I would encourage our countries to implement some form of the current agreements that have already been negotiated. If the USA doesn't "get it done", they will find themselves shut out of some profitable enterprises and exchanges, and perhaps more importantly lose political influence with the only remaining power in South America besides maybe Chile that are friendly to United States interests. China has already ratified a trade agreement here and throughout most of this region. Is it in the USA's best interests to leave the region more heavily under the influence of socialism and communism? I don't think so.
These are interesting times to live in, both as an American and as a global traveler/consumer. There are many new technologies and discoveries to be excited about. There is huge growth and potential in international business and trade relations. Yet, all we hear about are the negative events, the barriers, the misunderstandings. It is time that all the world's citizens get out of their own backyards of self interest and get in touch with the exciting and interesting variety of ideas and lifestyles our world has to offer. Colombia and other countries in this region are unique and different in many ways...yet...they have the same goals and desires that we have in North America. Most all of us prefer to live in peace, prosperity and positive hope for the future. Unfortunately we are surrounded by the voices of conflict, negativity and telling us all the reasons why we CAN'T live or trade peacefully with our global neighbors. We need to start looking more at our similarities than our differences...and it needs to start with all global citizens individually. We can no longer count on our governments or corporate institutions to speak or act on our behalves. They aren't. So...we each need to spend time outside the foxholes of our own existence and examine the possibilities at large with ALL our neighbors. Personally, I am finding my neighbors in Colombia an interesting and viable alternative to interact and build life together with. I think I am seeing signs that they have the same interests in return...