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Another Win for Colombia

I’ve been talking a lot about Colombia lately for a few reasons.

One is that the country’s reputation as being dangerous and dominated by the drug trade is somewhat a relic of the past.

Another reason is that the government in Bogota is not getting enough credit for its smart business moves. The U.S. Global investment team and I have made a number of trips to Colombia in the past year, and we are increasingly impressed by what we are seeing.

Colombia has a pro-business environment that encourages foreign investment in its promising natural resources sector. This is very different than its next-door neighbor, Venezuela, whose socialistic government has seized and nationalized private assets. A number of skilled Venezuelans, in fact, have crossed the border to work in Colombia’s resource industries.

The latest example of Colombia’s business success is in exporting coal with China, which is facing domestic coal shortages during a cold winter.

It’s a win-win-win situation: Colombian exporters penetrate a lucrative new market (most of its exports go to Europe, which has a surplus), China’s electric utilities get a new source of coal, and from an environmental perspective, the Colombian coal is a high-quality product that generates more heat and less pollution than China’s domestic supplies.

This new coal trade is small but growing now in terms of volume, but for Colombia, it’s a big win in terms of updating its reputation and playing a bigger role in the global economy.

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Disclosure: No positions