Colombia to Abandon Investment Limits as Peso Gains

[bemildred]

March 2 (Bloomberg) -- Colombia will abandon a two-month-old policy requiring international investors to keep their money in the country for at least a year after the measure failed to curb a rally in the currency, Finance Minister Alberto Carrasquilla said.

``It has proven itself to be extremely limited, if not useless, by nature.'' said Carrasquilla, 45, in an interview Feb. 28 in Bogota. ``I am very concerned that it's in place. I don't like it.'' The restrictions will end within six months, he said.

The peso gained 1.9 percent against the dollar since President Alvaro Uribe ordered the restrictions Dec. 15, extending a 14 percent rise in the past year. The stronger currency ``has a very important downside'' by threatening to crimp exports, and the government will keep up efforts to try to stem its rise by buying dollars, said Carrasquilla.

Without the investment limits, investors such as Brian Wolahan at Acadian Asset Management in Boston said they would reconsider buying Colombian stocks and bonds. The benchmark stock index has almost doubled in the past 12 months and prices on the benchmark bond due 2012 have climbed on increased confidence in the economy after Uribe, 52, stepped up his fight against rebels and improved security.


Bloomberg

[Say_What]

1. Venezuela is devaluing their currency by 10%

to make more money--meanwhile Wall Street says inflation not far behind.

Bolivar is now to 2,147.3 to the dollar, nearly matching the 2,150 average exchange rate the government forecast in its 2005 budget.

http://www.bloomberg.com/apps/news?pid=10000086&sid=aEluW72k3aRs&refer=latin_america

[bemildred]

2. I'm still trying to figure it out.

Chavez, near as I can see, is just adjusting for inflation,
he's awash in oil money thanks to Bush and his minions and still
cleaning up the mess from the "strike".

Colombia is a different case as far as I can see from here,
they have had a rapid appreciation of the Peso relative to the
dollar, people are dumping dollars, and it's bad for his economy
which ships a lot to el Norte. But there are other issues, after
a "quiet" period where things looked stable, I am starting to
see a lot of interesting incidents, the Granda kidnapping and its
aftermath, FARC attacks and battles, political shouting matches.
I have the feeling that something is up, but don't really know what,
except that Uribe is between a rock (the USA) and a hard place
(his reformist neighbors), and I have a feeling he is siding with
his neighbors, but I'm not sure what that means other than the
resolution of the Granda issue.

[Say_What]

3. Definetly hard to read

but I read an article, in Mercosur I think, that pointed out how the interdependencies of trade between Colombia and Venezuela have grown significantly over the past couple of years and will continue to grow, but that Brazil may replace Colombia as Venezuelas second largest trade partner. Uribe can't be too happy about that prospect and maybe he wants in on the game his LatAm counterparts are playing--particularly if China, Russia, and India begin to play a big part in what happens there as seems will be the case. Meanwhile, the Bushistas are looking for close to 600 million for military aid to Colombia--as you said between a rock and hard place. If the US suspects they can no longer use him, they'd off him in a heartbeat and replace him with someone else.

On another board where someone from Colombia posts, there was discussion that Uribe's father was a big part of the Medellin drug trade. Sorry I can't remember the details, but it was their opinion that Uribe is more or less being blackmailed by the US--truly a puppet. Hey, I just Googled something up about this.

<clips>

President Uribe’s Hidden Past

by Tom Feiling

Colombia’s President Alvaro Uribe is, by his own admission, a man of the right. Unlike most recent Colombian presidents, Uribe is from the land-owning class. He inherited huge swathes of cattle ranching land from his father Alberto Uribe, who was subject to an extradition warrant to face drug trafficking charges in the United States until he was killed in 1983, allegedly by leftist Revolutionary Armed Forces of Colombia (FARC) guerrillas. Alvaro Uribe grew up with the children of Fabio Ochoa, three of who became leading players in Pablo Escobar’s Medellín cocaine cartel.

President Uribe’s credentials are impeccable. He was educated at Harvard and Oxford, is as sharp as a tack, and a very able bureaucrat. At the tender age of 26 he was elected mayor of Medellín, the second-largest city of Colombia. The city’s elite in the 1980s was rich, corrupt and nepotistic, and they loved the young Uribe. But the new mayor was removed from office after only three months by a central government embarrassed by his public ties to the drug mafia. Uribe was then made Director of Civil Aviation, where he used his mandate to issue pilots’ licenses to Pablo Escobar’s fleet of light aircraft, which routinely flew cocaine to the United States.

In 1995, Uribe became governor of the Antioquia department, of which Medellín is the capital. The region became the testing ground for the institutionalization of paramilitary forces that he has now made a key plank of his presidency. Government-sponsored peasant associations called Convivir’s were “special private security and vigilance services, designed to group the civilian population alongside the Armed Forces.”

Security forces and paramilitary groups enjoyed immunity from prosecution under Governor Uribe, and they used this immunity to launch a campaign of terror in Antioquia. Thousands of people were murdered, “disappeared,” detained and driven out of the region. In the town of San Jose de Apartadó for example, three of the Convivir leaders were well-known paramilitaries and had been trained by the Colombian Army’s 17th Brigade. In 1998, representatives of more than 200 Convivir associations announced that they would unite with the paramilitary organization, the United Self-Defense Forces of Colombia (AUC), under its murderous leader Carlos Castaño.

http://www.colombiajournal.org/colombia185.htm

Paz!!

[bemildred]

4. I'd heard of that, but that is a nice piece on it there.

I didn't know he was from Medellin and the mayor, I knew he
had a "drug background" but that means diddly squat in Colombia.

I'm just thinking we may be at a parting of ways, like the
article from COHA suggests, his interests no-longer coincide with
the US and Noreiga and the like. He obviously had to do some
hard thinking while he was "sick" there. Would you risk everything
to support an asshole like Noriega?

It seems noticeable to me that the usual US stooges in Latin
America are no longer chiming in on cue when Noreiga attempts to
get one of his propaganda offensives going. The "three dissidents"
from Cuba thing was pretty pathetic. Nestor seems to have pulled
off his debt swap. Chile is now leaning left. Gutierrez in Ecuador
seems to be being pulled left. China is now throwing money around
all over the South and everybody wants to get their hands on some
of those good Chinese dollars.

The CAFTA thing and the "Central American Security Force" thing are
the only item that has me wondering. But right now that seems like
a bunch of hot air, no apparent money or guns behind it, just
promises and bullshit.