Colombia Has Become Latin America's Unexpected Economic Star
Colombia Has Become Latin America's Unexpected Economic Star
Reduced violence and sound macroeconomic policies have led to increased foreign investment in Colombia, underlines COA’s Eric Farnsworth.
Colombia and Argentina are trading economic claims again. Two years ago, the former proudly proclaimed it had overtaken the latter to become Latin America’s third-largest economy in 2012, behind Brazil and Mexico. Argentine economists cried foul, saying the claim, which relied on nominal figures and a black market exchange rate, was therefore invalid.Undeterred, the Colombians have claimed third place for 2013 after Argentina devalued its peso. The Colombians’ rationale: While their country’s GDP of $369 billion trails Argentina’s $485 billion using Argentina’s official rate, it would take the lead under a parallel rate that many economists consider a more accurate gauge. But the truth is, it doesn’t really matter who’s right. What does? The fact that Colombia’s economy is becoming a stronger force in the region and a magnet for foreign investment....
“The Fed’s tapering has had an impact in emerging markets, but because Colombia’s macro fundamentals are sound, they have been relatively insulated from capital outflows,” says Eric Farnsworth, vice president of the Council of the Americas, an organization that promotes free trade in the hemisphere. “Colombia’s disciplined macro policy has been buoyed by a favorable business climate that has led to increased foreign investment.”
The government is even in the midst of peace talks with the FARC, which has fought the state for half a century. “The reduced violence has certainly led to increased investor confidence,” Farnsworth says....
