Back in the 2022 presidential campaign, numerous rumors flooded the media, suggesting that Colombia was on the verge of being taken over by socialism, Marxism, and the so-called Castro-Chavismo if the leftist and progressive candidate Gustavo Petro won. However, today, 11 months after taking office, the reality is quite different. We can now confidently state that these claims were unfounded propaganda created by the establishment media, which is controlled by the wealthiest individuals in the country and has traditionally aligned itself with right-wing governments that have ruled Colombia for several decades.
Fitch and Moody’s Maintain Colombia’s Investment Ratings
One of the strongest indicators that the business environment in Colombia remains unaffected by the change in government ideology is the fact that Fitch and Moody’s have maintained Colombia’s investment ratings. Despite only 11 months under the new government, these two rating agencies have confirmed that Colombia will retain its BB+ rating with a stable outlook. This is attributed to the country’s healthy macroeconomic practices and adherence to fiscal rules.
Colombian Peso Gaining Value Again
During the first semester of 2023, the Colombian peso has generally demonstrated positive performance against the U.S. dollar. At the beginning of 2023, the Market Exchange Rate (TRM) of the dollar in Colombia stood at 4,810.20 pesos, which was close to the 5,000 peso mark. As of July 1st, the exchange rate quoted the dollar at 4,177.58 pesos. This indicates that the U.S. currency has depreciated by 632.62 pesos so far this year, representing a negative variation of 13.15%.
This turn of events is unexpected because the same sources that prophesied the arrival of socialism and Marxism in Colombia were also predicting that the Colombian peso would reach 6,000 or even 8,000 pesos. This apocalyptic forecast has proven to be completely false.
Decrease in Inflation
Colombia experienced rising inflation since January 2021, but over the past three months, there has been a downward trend. In May 2023, the annual variation of the Consumer Price Index (CPI) stood at 12.36% with a monthly variation of 0.43%.
Comparing to April, the annual figure dropped to 12.82%, while the monthly variation decreased to 0.78%. Going back further, the March report indicated inflation at 13.34% with a monthly variation of 1.05%.
Declining Unemployment
The unemployment rate in Colombia for May 2023 was 10.5%, down from 10.7% in April. This means that in May, there were 2.6 million unemployed individuals and 14.2 million people out of the labor force. While these numbers may not appear significant from a general perspective, considering the malicious narratives that predicted a total collapse for Colombia, it is clear that the Marxist threat was never a possibility.
A Brave New Diplomacy
Traditionally considered a minor player on the international stage, Colombia under President Gustavo Petro has emerged as a prominent international figure, championing an ambitious and relevant agenda worldwide, particularly concerning climate change. He has been honored with visits to powerful countries and meetings with influential leaders. Since his election, representatives from the Biden administration have visited Bogota, and an official visit was held at the White House, where a commitment of $200 million was made to protect the Amazon forest.
President Petro has also visited countries such as Germany, Spain, France, and Brazil, attending conferences like the World Economic Forum in Davos and the COP, where he was warmly received by respected leaders. Countries like the UK have also expressed interest in investing in Colombia’s development.
Despite ongoing efforts by traditional Colombian media to push harmful and false narratives aiming to discredit the new government, history is quickly proving that most of these alleged threats are merely propaganda campaigns fueled by the right-wing, which has been closely associated with corruption and paramilitary groups. Thus far, it is evident that businesses in Colombia continue to thrive, even as the government implements profound social reforms, which the conservative powers may exaggerate and misrepresent.
