Located between the Pacific Ocean and the Caribbean Sea, we could say Colombia is something
like the entry and exit door of South America.
And...
You know what?
This is Colombia…
The long and cheerful beaches of Santa Marta, La Guajira Desert [Pronounced: la wha-hee-ra];
the inaccessible Leticia, capital of the leafy Colombian Amazon rainforest…
Them there are the islands of San Andres and Providencia, the coffee belt of Quindío,
Caldas and Risaralda, and, of course, the vibrant cities of Medellin, Cali, or Barranquilla.
And…
We can’t forget about the historical and proud Cartagena or the frenetic Bogota - the
great capital city of the country that, dear viewers, with its Candelaria, its Cerro de
Monserrate, or it’s incredible museums of gold and art, will leave you speechless.
Yes...
We can’t really be surprised that more and more travel guides are making Colombia a 100%
must-visit destination.
But as you may have guessed, this video is not going to be about tourism, not at all…
It’s politics that we do here, after all.
On May 2018 the next presidential election in Colombia will be held, and by August 7th
this country will have a new President because the current one, Juan Manuel Santos, has already
reached the limit of two terms.
So, as Santos’ time is coming to an end, with this video we want to take a look ahead
and find out what kind of Colombia he is going to leave his successor.
We’re going to have a look at the great things, as well as the shadows…
TODAY’S COLOMBIA
A gambling man, a great poker player, and part of one of the most influential families
in Colombia…
This is Juan Manuel Santos.
Even his great uncle, Eduardo Santos, was president of Colombia in the late 30s.
His family owned also El Tiempo, the most influential newspaper in the country.
In fact, the very same Juan Manuel Santos was for a long time deputy director and a
columnist at the newspaper.
What we are trying to say is that this family has never lacked influence, money or power.
So, after two terms, the 7th August 2017 marks the end of his time as President.
And, to be honest, his level of popularity is at rock bottom.
Even after winning the Nobel Peace Prize due to his peace deal with FARC, the lastest polls
at the moment of making this video show that between 65% to 75% of Colombian people disapprove
his governance.
So the question here is…
How does a Nobel Peace Prize winning leader have such strong disapproval ratings from
his people?
Perhaps it has to do with the controversy about his broken promise of the peace deal
with FARC - remember he assured them it was going to be the Colombian people, and no one
else, who were going to have the last word on the deal.
And, well… let’s just say that Santos forgot about it.
“Colombia referendum: voters reject peace deal with Farc guerrillas” - The Guardian
“Colombia and FARC Sign New Peace Deal, This Time Skipping Voters” - The New York
Times
But apart from this, if there is really something that can make him have such low ratings, well
then it would be the economy.
Yep, during the last decade this “Pacific Puma” called Colombia, well it used to have
quite strong growth and it even became one of the most thriving Latin American countries.
However, lately things have been a little bit different, well, actually quite a lot
different.
Have a look at this chart: Today, Colombia is facing a situation of…
slowdown, which is really close to stagnation.
The latest growth figures show a year on year increase slightly above 1%, and 2017 the forecasts
don’t seem to be much better at all...
“Colombian economy growth rate will be 1.5% in 2017, according to BBVA Research”.
Heraldo
As you can see, this is not a good figure, especially if we consider that most of the
richest countries are growing at higher rates...
The United States, Canada, Spain, Germany, UK…
All of them will grow more than Colombia in 2017.
And well, it’s supposed that when you are a poorer country, you grow more…
This is because of something called economic convergence.
So now the question has to become...
What is happening to Colombia?
Many blame this situation on the fall of oil and commodity prices...
And in a way this is sort of right, but there are some nuances to consider.
Now, it is true that at its climax in 2013, oil represented more than 50% of all the country’s
exports, more than 30% of all foreign direct investment, and more than 20% of public revenues.
But it is also true that for many years, thanks to high oil prices, the government of Colombia
has had more resources than ever before, resources that could have been used to boost a productive
and competitive economy unrelated to these commodities.
And this is something that the Santos administration seems not have been able to do.
Perhaps because they have been dedicated.
almost exclusively, to the peace deal with FARC.
Anyway, let’s now have a look at what are still the main weaknesses of the Colombian
economy...
DISASTROUS INFRASTRUCTURE
For years Colombia has been, how should we say it…
Almost a failed state in many areas...
These are areas that were controlled by warlords, guerrillas, militias, narcos…
So, now try to imagine how difficult it can be to manage such a country and how complex
building infrastructures there can be.
But that’s not the whole story…
The reality is that infrastructure has never been a major priority for any Colombian government…
And the result of this is pretty obvious - the infrastructure in Colombia is really bad.
Today Colombia’s infrastructure is truly dreadful, with most of their paved roads in
a state of disrepair.
The result?
And pay close attention to this because it’s almost unbelievable...
Moving a container within the country is twice as expensive than in Mexico or Bolivia, and
4 times more expensive than in Argentina, Chile or Peru.
In fact the situation is so disastrous that freight transport between the Colombian ports
of Buenaventura and Bogota is three times more expensive than moving the same load from
Rotterdam to Frankfurt.
Interestingly some reports claim that sending a container from Cartagena to Bogota costs
three times more than sending it to Shanghai!
So, you can probably imagine all the effects that this has on supply costs, prices and
the competitiveness of Colombian companies.
According to a recent OECD report, Colombia is the third world’s most expensive country
from which to export containers, after Venezuela and Russia.
That’s why Juan Manuel Santos decided in 2010 to make changing this his top priority.
And it’s true that his government has just released the biggest infrastructure plan in
the history of Colombia, a private, cofunded plan, which, under a concessionary system,
is actually pretty attractive.
Yes, this plan seems to be well designed but, after seven years, it just a bit too late,
and it comes with many problems.
To be honest, during his two terms, Santos achievements haven’t really been as good
as he promised they were going to be...
BUREAUCRACY AND TAXES
Both the World Economic Forum and the World Bank confirm that Colombia is one of the countries
with the highest taxes on companies in the world…
Which is obviously something that doesn’t help companies to grow and develop.
According to the ‘Paying Taxes’ report that every year PriceWaterhouseCoopers publishes,
the total of all taxes that a Colombian company has to pay is 69.8% of their pre-tax profits!
That’s almost 70%, which is significantly higher than in countries like Germany, Spain,
the United States…
To be honest, it’s pretty insane.
And then there is the bureaucracy, which has an almost equal level of insanity.
One day, we are going to make a video all about the great passion for bureaucracy that
Latin America has, but we can’t do that in today’s video because it’s just such
a huge topic!
So, on an average day in Colombia, 15 rules and 3 decrees are issued.
Yep, that really is every day!
And not just that: according to research conducted by the University of La Sabana, more than
30% of the laws passed are useless and just create costs for Colombian society.
And what has Juan Manuel Santos done to solve all these issues?
Well, almost nothing.
In fact, he has made the situation even worse...
THE PERSISTENT VIOLENCE
It is true that many aspects related to security are improving in Colombia.
The uptick in the tourism industry in the country is good evidence of this...
In 2016 more than 5 million tourists visited this country, more than twice the number from
2010 and almost 10 times more than in the year 2000.
Not bad, right?
However, despite this, in many areas of the country, the situation is not really improving.
According to United Nations and the Colombian Conflict Analysis Resource Center, violence
still remains in the most affected areas of the country, without having FARC peace deal
substantially improved this situation.
In fact, for example, coca plant growing and cocaine refining it’s in its highest.
Just have a look at this chart: So now you may be wondering…
How is it possible that violence levels and the production of illicit substances has not
been reduced since the government deal with FARC?
Well, that’s because despite all the “marketing” from the government, and while the violence
by FARC was huge, it actually represented less than 10% of the nation's total violence.
And, moreover, the areas that FARC has left have not been occupied by government institutions
but by other narcos or mafia groups...
Some of them even by mutual agreement with FARC.
After all, the business is still very attractive…
The peace deal left many things up in the air, and that’s why the so-called “peace
dividend” is not giving results as big as the government promised.
Now, to be fair, everything has not been bad under Santos’ presidency.
THE BEST OF THE SANTOS ADMINISTRATION
We have to admit that Juan Manuel Santos has achieved some good things:
His government brought Colombia to the Pacific Alliance.
We’re actually going to talk about this Alliance’s success in an upcoming video,
so don’t forget to subscribe!
And of course, his foreign agenda has been a great strength of his government, with Colombia
today being more open to the world than it was before Santos.
Further, poverty has been reduced considerably and the country has attracted lots of foreign
investment.
But despite all this, our impression here at VisualPolitik is that the arrival of a
new government can really be a positive turning point for Colombia.
When Juan Manuel Santos took office the country seemed to be ready to tackle a real process
of transformation, and their oil resources meant they had the ability to pay for it.
However, this has yet to be achieved.
Quite the contrary in fact...
Santos leaves a weak economic Colombia and many more future projects than present realities.
So now we’d love to know your opinion.
What do you think the future of Colombia will be?
How would you rate Santos?
You can leave your opinions in the comments and also in this quick survey.
And if you enjoyed this video, you can let us know by hitting that like button.
Also, check out our friends at the Reconsider Media Podcast - they provided the vocals in
this episode that were not mine!
And…
As always, thank you for watching.