“Welcome to Colombia. Colombia has many wonderful hideaways you can’t miss. And more than half of those wonderful hideaways no longer shelter drug cartels or guerilla armies in them.”

OK, fine. That last sentence isn’t really on the Web site for Colombia’s Tourism Promotion Fund. But they should consider adding it. They might get more traffic that way. And I don’t mean the drug kind.

In the last five years, Colombia has started cleaning up its act, and its economy is stepping out of the shady realm of the trafficker and into the light of (legal!) international commerce.

In fact, Colombia now has a thriving tourism economy. Yep, the country where a foreigner couldn’t walk out his front door without the constant threat of being kidnapped, robbed, shot or all three in succession is now a resort destination for the sand and surf crowd.

Eight years ago, facing growing violence from militant factions and the largest cocaine cartels in the world (the Drug Enforcement Administration has estimated that as much as 80% of the world’s cocaine supply comes from Colombia), President Andres Pastrana tried something different. His “Plan Colombia” strengthened the country’s democratic institutions, initiated a reform of the court and law enforcement systems and endorsed a human rights initiative.

In 2002, Alvaro Uribe took over the presidency, and he didn't just continue his predecessor's programs; he expanded them. To date, Uribe has persuaded 41,000 guerilla fighters to give up their arms. And his Justice and Peace Law has given militants across the country reduced sentences and partial amnesty in return for leaving their various factions and providing a complete account of their “army” activities to authorities.

The crime rate in Colombia has dropped dramatically since Uribe stepped into the presidency. From 2002 to 2006, kidnappings fell 78%, homicides fell 37% and terrorist attacks fell 63%. And thanks to the efforts of Colombia’s military and police forces, the largest, most powerful guerilla army in the country, the Revolutionary Armed Forces of Colombia (FARC), hasn’t pulled off a large-scale multi-front attack in seven years.

As for the drug situation, Colombian officials seized 558 metric tons of cocaine, coca base and heroin between May 2002 and September 2004. That’s five times the amount seized by the U.S. government in 2003 (the latest reported year), and it’s equivalent to about $55.8 billion at American street prices for the drugs. With agriculture replacement programs developed by Uribe’s administration, coca cultivation in Colombia dropped 15% from 2001 to 2005, and opium poppy cultivation fell 68% between 2001 and 2004.

Despite the slowdown in its illegal market, the country’s legitimate economy has flourished with its newfound security. In the last five years, Colombia’s economic growth has tripled, reaching 6.8% in 2006.

And international financiers are taking notice. Along with the nearly 2 million visitors, who brought $2 billion in foreign currency into Colombia last year, foreign direct investment in the country has tripled to $6.5 billion in the last four years.

Last spring, Uribe won his second presidential election with 62% of the vote. And while his country isn’t the place you’d want your kids going on spring break, yet, if Uribe has his way, it could be the next "best-kept secret" retirement spot in another 20 years.

In the meantime, as Colombia continues its steps toward security and expansion, we’ll keep an eye out for investment opportunities in one of South America’s newest thriving economies.

 

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