On September 1st 2008 the Finance Minister announced the end of the stigma that was Capital Controls here in Colombia, detested by foreign investors they completely failed in their attempt to weaken the Peso and paid no more than lip service to the exporters who as ever are too busy crying for help as opposed to streamlining their businesses and preparing them for the 21^st Century. Additionally they were at odds to modern free market economic practice and led to the rating agencies ignoring any claims Colombia may have had to Investment Grade and led to the MSCI threatening to downgrade the country to Frontier Status.

What lunacy then that the subject should even be discussed in intellectual circles once again both ahead of last week’s summit between the Government & Central Bank and today after Brazil shot themselves in the foot and introduced a 2% tax on new investments. The Bovespa took a huge hit and the Real also fell – foreign investors instantaneously punished the country for anti-market practices. The talk then amongst foreign investors was whether Colombia would follow suit and re-introduce controls of some description, that is a damning indictment of the reputation this administration has attained due to the recently ill thought out dalliance with Capital Controls.

The simple truth is that if the Government. wants to retain it credibility with foreigners and continue to see US$ billions of FDI pour into this country on an annual basis they have to ignore the sirens of doom and stay on the current path of free market economics. There is simply no place for reactionary policy in this day and age, the measures taken last week were appropriate, they unsettled speculators and kept the Peso under control. How is any business, exporter or importer, expected to operate with the shadow of Government intervention hanging over them.

The reality is that any attempt to control the Peso is as doomed as any attempt to control the Real, Pound, Euro or any other currency or commodity you care to discuss. What is occurring is a potentially multiple year appreciation against the dollar – the US is spending money like water and eventually hopes to reflate its economy via that means, the by product of that down the road will be an oversupply of dollars and inflation. No investor wants overexposure to the dollar in that scenario and they are investing in all manner of currencies as well as commodities across the board. Additionally a tremendous amount of US debt is held by non –aligned overseas Governments who if they decide to sell down their positions will cause another wave of dollar selling.

Does the Govt. here think that anything they can do here will halt that trend ? Judging by last week’s meeting they understand this and have acted accordingly, if they suddenly think they can influence global economic direction then I am sure the rest of the world will be calling for advice.

So what about the traditional export industries such as textiles, flowers and banana growers who seem to be foremost in the chorus of complaints about the Peso – surely I am not suggesting they be thrown to the wolves ?? Actually yes – as the Finance Minister stated when recently questioned, they have had years of appreciation to get used to the idea of a strong Peso and have all manner of financial instruments by which they can hedge their currency positions and limit the damage caused. I do not recall the importers complaining with such verve when the Peso went to 2600 ?

The stories soon circulated, the salesman from our office who had visited a client at the World Trade Center that morning and would never be coming back and it also transpired that one of my colleagues unbeknown to him was on the phone to a female client at the very second her office was blown out of existence by the impact of the second plane. All conversations in the stock exchange are recorded and the family later requested that recording from the bank as they were literally the ladies last words.

Perhaps the saddest story in my experience was that of Cesar Murrillo a newly wed who was, ironically considering where I ended up living, was a Colombian. My last memory of Cesar was in deepest Queen's watching and celebrating the 2001 Copa America triumph. It was a double celebration for Cesar who revealed that he had just taken a new job and would join Cantor Fitzgerald in a few weeks time. Sadly for Cesar his big break came a few weeks too soon and he was one of over 650 employees of that company who perished that fateful day. Having a Colombian wife I had often told Cesar of my ambitions to one day settle here - hopefully from somewhere he is watching and seeing that I came good on the promise.

Can someone explain to me why they began at 3pm ?

Is it the breakfast meeting, the brunch meeting or perhaps the lunch that is more important than organizing the referendum ?

If they do run out of time, as they have done, is there any fundamental reason why they cannot sit down Thursday, Friday or Monday to complete the process, are there not enough long weekends in Colombia already ?

This is not the first time important debates have been left until the next week (or even month) and this simply is not a country that can afford to hesitate when it comes to its advancement, any reforms cannot come soon enough and should not be held up by Congress.

If politicians are so busy that they cannot spare the time to be in Bogota to vote then maybe they shouldn’t be there in the first place ???

Latin America has a long history of being pushed around by bully boys. Back in the midst of time it was the Europeans in the shape of the Spanish, Portuguese & English who arrived here to either kill, steal or indoctrinate, sometimes all at the same time. During the 20^th century there have been other home grown dictators who have been guilty of all manner of crimes against their own people. Now almost region wide we have a generation of poorly educated and worse intentioned leaders who are hell bent on staying in power as long as possible via the removal of term limits and the dismantling of free speech.

This may prove a little tough for Latinos to hear but with the notable exception of Simon Bolivar (who shamefully President Chavez has taken the name of for his movement ) there have been relatively few times those dictators have been opposed either domestically or more importantly by neighboring countries who have stood idly by as events have unfolded.

Again in 2009 we have regional leaders preferring to pass by on the other side rather than stand up to the dictator Chavez who appears to be rapidly losing control of his faculties.

One can perhaps justify the behavior of  leaders such as Ortega, Morales & Correa who are beholden  to Chavez in terms of both political ideology and financial support however for Lula the leader of the second most powerful country in the Americas to cower in front of the Venezuelan leader is both shameful and demeaning to his country.

I  refer not to the US military bases which in the end are simply an excuse for Chavez to launch into his latest tirade but instead the battlefield missiles which found their way into the FARC encampments. President Uribe has rightfully said he will have no truck with a Unasur meeting to discuss US bases and one can only imagine his lack of appetite for visiting Quito two weeks after the Mono Jojoy video appeared but perhaps he should go ?

What Uribe should perhaps do is crate up one of the battlefield missiles and take it with him. As soon as the discussion regarding the US bases has concluded the weapon should be deposited on the table and then the Colombian President should demand that the issue is discussed immediately. Of course we know that President Chavez would leave the country immediately and no doubt President Correa would head for one of his now famous toilet breaks ! If Unasur has been created to discuss security then surely the first item on the agenda should be the first appearance of surface to surface missiles in a combat zone on the continent.

Even here in Colombia politicians are getting too wrapped up the 2010 election already and disappointingly that means that too few of the leaders of this country owing to self interest are prepared to mount a robust defense of either the country or the President’s position in recent developments. What is occurring in Caracas & Quito is an insult to this country however there appear to be those that are prepared to tolerate that. If Hugo & Rafael wish to bankrupt their countries that is a problem for their respective peoples however when neighboring nations threaten either directly or indirectly the security of Colombia than it is time for people of this country to stand up and be counted, something that in the main is not happening.

Whilst working in London during the mid 90’s I remember vividly phoning our local office in Sri Lanka early one Monday morning to ask for my execution prices for stocks we were buying in the local stock exchange that day, strangely there was no reply. Two hours later there was still no answer which was curious. Eventually my phone line rang and it was the local office manager Harsha calling from his home. He was profusely apologetic for the lack of service however during the weekend a terrorist bomb had destroyed the building where the office was located. It is absolutely typical of a person from the Indian Sub Continent to apologize first before clarifying the reason.

The civil war in Sri Lanka has reached it climax at a cost of at least 80,000 lives and has in common with most domestic conflicts been filled with unspeakable atrocities on both side, its ideological beginnings are lost in the sands of time with the official conflict being 26 years old but the roots of the issue going back to the 1940’s . It has led to the assassination of not just a Sri Lankan Prime Minister but also a multitude of other Ministers. The Ex Prime Minister of India Rajiv Gandhi was also assassinated, at the time he was guilty of little more than sending a peace keeping force to Sri Lanka..

In the end after years of attempted peace talks, truces & international intervention the new hard line Govt. decided enough was enough and during 2009 has launched a brutal offensive which has led to the death of the guerrilla leaders and the effective end of the main conflict. The crucial matter for Democracy is that the defeated Tamils are now given a voice in the Sri Lankan parliament and take their place in an inclusive society..

There are many parallels to the conflict here in Colombia and eventually we too have be an inclusive society and put the sins of the past behind us, the question of course is how we get there. The end game is upon us however the hope has to be that there is no need for a Sri Lankan style final battle which could costs 1000’s of Colombian lives in order for this country to find peace.

Following the Govt. victory in Sri Lanka the global press is discussing a new Machiavellian paradigm in the struggle against terrorism under which as opposed to a long drawn out combination of military tactics and diplomacy an all out offensive takes place in order to end the suffering quickly, countries such as Turkey & Colombia are mentioned amongst those who might do better choosing this new more aggressive strategy.

On the opposite side of the argument is another period from my own experiences and that is Northern Ireland case where in the end after decades of terrorism a diplomatic solution prevailed, it is still at times an uneasy peace but cities such as Belfast have returned to relative peace after years of violence fueled by religious bigotry.

Here in Colombia there is the common theme that the original principles and ideology of the FARC have long since disappeared under a mountain of cocaine money and that is going to be most complicated of puzzles to solve. The simplistic answer we hear both here and in Mexico is that the substance should be legalized however the stark reality is that  it will not happen in the countries where consumption is at its highest.

If one wanted to be totally Machiavellian then the FARC should be crushed as soon as possible and the Govt. surely has at this point the military intelligence and hardware to deal the group a fatal blow. This would bring tremendous economic benefits as the country would be open for the first time in 50 years and trillions of Pesos that are currently spent on armaments could instead be directed towards badly needed social programs. The problem of course is that the human cost could be enormous, not just in lives but in terms of a society divided for years to come by the experience.

In the case of the FARC the majority of the evidence appears to point to an organization bleeding to death so perhaps it is better to continue the very successful carrot and stick approach. The military pressure that has brought about an improved lifestyle for millions of Colombians has to continue but equally the overtures to the FARC members to lay down their arms and to return themselves to everyday life with no recriminations are very important.

Sri Lanka is one of the most beautiful islands you could hope to find on this earth, rich in culture and heritage. The people are warm and generous and fully deserve the peace that hopefully lies ahead for them. I have frequently heard Colombians described by my foreign guests in the same terms and the people of this country equally deserve to be free to walk every last inch of this beautiful land should they desire – a Utopian concept right now I accept but lets hope not for too long and not at too high a price.

The announcement by Ecopetrol CEO Javier Gutierrez that the company will be investigating how the results of the company got into the public domain 36 hours ahead of their official publication is a significant one. Whilst there was no wholesale release of numbers and probably no malice intended the fact that someone was able to obtain the EPS for 1Q09 and therefore calculate the Net Income is at best a mistake and at worst very poor Corporate Governance.

All the benchmark companies here in Colombia are signed up to the code of good Corporate Governance however within that list of companies who have the certification there are a wide range of standards: At one end of the spectrum there are those who take pride in helping and informing investors and at the other end  those who once they have the qualification (and more importantly tour money) don’t give a damn.

Once an investor takes the decision to buy shares or bonds in a company that corporation should then be honor bound to keep those investors informed as to anything significant that occurs which may affect the value of their investment. It matters not if that investor has 1 share or 20% of the company, under the code of Corporate Governance they have equal rights to information.

To have Mr Gutierrez weighing into the situation is very important as his company has more investors than any other in Colombia, he was also CEO of ISA which has the second largest amount of investors. Mr Gutierrez is also a man who travels the globe promoting Ecopetrol and in turn Colombia and will be well aware of global standards of Corporate Governance.

We recently carried out a study into the level of transparency in Colombia and the results were very mixed, we had small companies with few resources doing well whilst some large one scored badly – proof if you want that it is a matter of application not money.

Afterwards we had a number of companies come to our office in order to discuss their individual results and ask us where they might improve, that is highly encouraging. Disappointingly some who scored badly simply don’t appear to care and that remains a worry for investors.

Amongst incidents that would not be acceptable to global investors we had offences such as

(1) Results appearing in the public domain before the SIMEV (Superintendencia Financiera)

(2) Refusal to explain new investments in detail in terms of the cost and expected revenues.

(3) The relevant company officials being absent from the office on the day results were issued and therefore not available to answer questions.

There were other ‘offences’ but overall the problem appears to have been a lack of understanding in terms of what good transparency actually is. Whilst several companies who scored poorly have already taken steps to improve the information they provide to investors others have not and most likely will not and this will only change if investors begin to shun companies that do not give them the respect they are due.

As for the case of Ecopetrol let us hope it was a case of naivety more than anything else.

As a motorbike rider and knowing the far reaching influence of the truck Unions if you should here of an accident over the next 48 hours involving a large truck and a motorbike feel free to print this and hand it to the authorities !!

I have no doubt the Chavistas amongst you will be quick to comment…….

I have several times attended the bell ringing ceremony at the NYSE but it was a new experience to be up on the platform alongside my colleagues - one for the photo album as they say. As opposed to dwelling on the achievement itself and appearing to pat ourselves on the back I wanted to summarise briefly what I said to those gathered at the breakfast presentation that preceded the bell ringing.

I endeavoured to explain to those listening that Colombia has come a tremendous distance since I first set foot in Medellin in 2000, the most obvious example of that being the need for me 9 years ago to be met by a bodyguard whilst this week the BID is expecting 5000 delegates in the same city - an enormous vote of confidence in both Colombia and what Alvaro Uribe have achieved, to deny there is a correlation between the two is to live on the moon.

I covered the obvious macro changes and the very real possibility that Colombia will truly emerge from its darkest hours of the 1980´s & 1990's to become the Andean superpower as infrastructure projects improve efficiency and trade whilst the completion of the multitude of energy projects (especially hydroelectric) will allow for the real possibility of the country exporting power to neighbours such as Panama who are currently having all manner of inflation issues caused by their need to import oil.

I made mention of the people of Colombia who in the vast majority are a natural resource in themselves, it is an important aspect in a country that numbers over 40 million souls.

Both during the presentation and during conversations afterwards there was one theme that constantly cropped up - and for good reason. Why do Colombian companies spend so much time looking at their feet ? To explain this without naming individual companies is very difficult so I will keep in general. This relates back to a topic I have commented upon in the press on several occasion - that of transparency, it is key and Colombia will be held back if companies do not get into the habit of keeping their shareholder fully up to date with developments.

What makes this even more annoying is that the majority of the companies to be found on the IGBC (disregarding valuations for the time being) have tremendous success stories to tell. Only 10 years ago you would find few corporations with holdings outside of Colombia - now it is harder to find those without regional exposure and even those are now looking at the possibility. We have regional leaders in sectors, Colombia is an enormous presence in Central America and due to the companies prudence over the past 2 years there is a war chest of well over a US$1 bill ready to be spent overseas by those same corporations. Colombian companies can be proud of these achievements – it is time to look the world in the eye not at the feet.

Whilst there has been tremendous progress over the past 3 years on this front it is for some companies here in Colombia like getting blood from a stone when it comes to getting information - some blame internal rules and others simply don't care, this is not only unacceptable to foreign investors who will simply pass on the other side of the road but it should be totally unacceptable for local investors as well.

Here at Interbolsa we are trying to change this via probing reports etc and I urge other brokerage houses to perhaps push back against tradition and perhaps question more deeply - as often as not this leads to good news as well as bad.

I was asked after my presentation this question  "What can you say to convince me to invest in Colombia ?"

What I will say to the companies is this : "What will you do to help me to convince people to invest in Colombia ?" The companies have the stories, the projects, the vision and in most cases the money - now tell us properly what you are doing with all those attributes.

During other meetings before and after the ceremony I found a lot of support for Colombia amongst fund managers who are sat on enormous piles of cash ready to invest - it is the collective responsibility of the corporations here to make sure we attract our share of that money which in the end (all those not agreeing please fell free to flea over the border) benefits the majority of the population.