Royal Caribbean Returns to Cartagena

The U.S.-based company, Royal Caribbean Cruises, will return to Colombian ports after a more than a four-year absence. Richard Fain, President of Royal Caribbean, said during a May 4 announcement with Colombian President Alvaro Uribe that he anticipated 75,000 passengers would visit Colombia’s shores within the next year. Royal Caribbean sails to the Bahamas, Panama, Brazil, Argentina, Ecuador, Peru, Uruguay, Chile and Venezuela, among other countries.

The port of Cartagena expects 26 cruise ships with 41,331 passengers during the first half of 2006, a number similar to that which visited during 2005. A total of 36 ships will dock at the northern port of Cartagena between April 2006 and April 2007.

Colombian Exports Expand by 21.5%

Colombia’s exports increased 21.5% in February, compared to the same month in 2005, according to Colombia’s National Statistics Department (DANE). Total exports reached $1.86 billion, led by commodities such as coal, oil, ferronickel and bananas. Revenues from gold rose 59%, coal revenues grew 51%, and oil increased by 18%.

Retail Sales Increase 10%

Colombian retail sales, excluding fuel sales, rose 10% in February compared to the same month a year ago. A report by the National Statistics Department (DANE) highlighted the sales of furniture, cars, and home appliances as key to this growth. The positive measures of Colombia’s retail industry have led both local and foreign supermarket chains to increase their investment in the country. These developments include a $100 million plan by French-based Carrefour SA to open seven hypermarkets. Colombia’s Carulla Vivero SA has also launched a $49.8 million plan to open six supermarkets.

Unemployment Continues to Decline

About 1 millon jobs were generated during the last 12 months. The national unemployment rate declined by 2 points to 11.3% in March 2006 compared to 13.1% in the same month a year earlier. Unemployment in the country’s major cities fell by 3 points in March 2006 to 12.2% from 15.1% in March 2005.

Colombia Ranked 2nd Most Competitive Country in Latin America

Colombia is ranked the 2nd most competitive country in Latin America, and 40th overall, in the global ranking of the World Competitiveness Scoreboard 2006. Colombia rose seven places from its position in 2005. Chile maintained its top competitiveness ranking in the region. Other ranked Latin American economies included Brazil (52), Mexico (53), Argentina (55) and Venezuela (60). The annual World Competitiveness Yearbook, published by Swiss-based IMD, is the world’s most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation’s political and business environment creates and sustains the competitiveness of enterprises.

5.37% GDP Growth Anticipated in Q1;
Inflation Remains Low

Colombia’s Gross Domestic Product is expected to gain 5.37% in the first quarter of 2006, compared with the same quarter in 2005, according to Santiago Montenegro, director of the Government’s National Planning Department. The economy expanded 5.13% during 2005. Colombia’s statistics department (DANE) will publish official GDP figures at the end of May.

The Central Bank has set an inflation target range for 2006 of 4% to 5%. Analysts expect the country will meet the inflation target this year after it reported an inflation rate of 4.85% in 2005, the lowest rate in half a century. Jose Dario Uribe, president of the Central Bank, said on May 9 that the 12-month inflation rate in Colombia will end this month close to 4.1%, even though heavy rains disrupted the supply of some food products in the country.

Seven New Oil Contracts Signed

Colombia’s National Hydrocarbon Agency (ANH) signed seven new oil exploration and production contracts this month. These contracts, along with two further preliminary contracts, will total $34.4 million in investment. This brings the total number of exploration contracts signed this year to date to fourteen. Companies that recently gained exploration rights include Australia’s BHP Billiton (BHP), London-based Taghmen Energy (LAG.LN), Canadian-based Apex Energy, U.S.-based Hupecol, and Colombia’s Occidental Andina.

ANH aims to sign 30 exploration and production contracts by the end of 2006. Its goal is to sign new 30 exploration contracts and drill 60 new oil wells a year until 2020.

Phillip Morris Seeks 100%
Ownership of Coltabaco

Phillip Morris International’s Dutch unit, GWP CV, offered to the buy the remaining 1.604% of the shares it does not own of Colombia’s largest tobacco firm, Compania de Tobaco SA. The company offered to pay 11,100 Colombian pesos per share, the price it was last traded for on April 24th. GWP CV acquired 96.7% of Coltabaco in April, 2005 and increased its stake to 98.4% last year. Coltabaco was estimated to hold 48% of the Colombian market last year and is the fourth-largest tobacco company in Latin America.

What Others Are Saying

“In Colombia, ethanol’s future is now. Since November, motorists in three large cities – Cali, Bogotá and Popayán – have been required by law to fill their tanks with at least 10 percent ethanol...Over time, the list of cities and the share of ethanol will increase as the country reduces its dependence on oil, officials said. The biofuel law is spawning investment in ethanol infrastructure in the Cauca Valley, Colombia's sugar-growing capital. Two ethanol-processing plants have been completed, two are under construction and as many as six more are on the drawing board. Total investment in ethanol-processing facilities here could easily reach $100 million, said Cali Chamber of Commerce President Julian Dominguez. So it's no accident that Cali, where half of all jobs are connected to the sugar industry, exudes prosperity these days. The unemployment rate in this city of 2.5 million, 11.4 percent, is the lowest of any large Colombian city. Eleven shopping centers have opened or begun construction in the past year, Dominguez said, and crime is down significantly.”

"Tucked into the lush, dense jungles high in the mountains of Colombia's Sierra Nevada de Santa Marta, Ciudad Perdida holds the ruins of one of the largest and oldest pre-Columbian settlements in the Americas. But drug-related violence and general lawlessness -- not to mention 40 years of war -- have kept all but the most intrepid travelers away. The government of President Alvaro Uribe is intent on changing that. The president has taken a hard line against leftist rebels, and there has been a 78 percent drop in kidnappings since Mr. Uribe took office in 2002. Looking to cash in on that, Mr. Uribe's government has begun to promote Colombia as one of the world's hottest new tourist destinations...Travel guides are taking notice of the trend. The Lonely Planet travel guides, for instance, picked Colombia as one of the 10 top travel hotspots for 2006."