Colombia is looking to China and the rest of the international community to help rebuild its image. Decades of violence related to drug dealing and armed conflict between government forces, left-wing insurgents and right-wing paramilitaries have scarred the face the strife-torn country presents to the world. For many, the image of Pablo Escobar - notorious for orchestrating the killings of presidential candidates and the bombings of a commercial aircraft and a government security building - captures the very worst for which the country became notorious. It was a key cocaine supplying hub for North America and Europe, controlled by the Cali mafia in the 1970s and then Escobar's infamous Medillin cartel in the 1980s. The enormous financial clout of these organisations, which operated like large international corporations, made them extremely difficult to eradicate. It was not until 2002, when Alvaro Uribe Velez, who remains in power, was elected, that the government managed to strike back at the paramilitary groups with some success. The country's homicide rate, for many years the highest in the world, has almost halved since. But it remains among the highest in the world and the kidnapping by uniformed men last month of Luis Cuellar, the governor of the southern Caqueta region, served as a reminder that paramilitaries continued to operate. The abduction was widely attributed to the Revolutionary Armed Forces of Colombia (FARC), a leftist insurgency group with links to the drug-trafficking business. The incident resurrected the worst fears of ordinary Colombians and badly damaged the country's fragile rehabilitation process. For Stephany Sanchez, a public relations manager responsible for country branding at the South American nation's export and investment promotion organ Proexport Colombia, it was an echo of earlier and more dangerous times that Colombia was now struggling to overcome. 'There was a time it was dangerous for us to even drive around, since we could be kidnapped. Things had started to change, but people tend to remember only the negative side because bad news sells better and that's not fair,' said Sanchez. As a result, Proexport started a 'Colombia is passion' international public relations programme funded from both public and private entities, to 'bridge the gap between perception and reality'. It invited more than 400 journalists, writers and opinion leaders from around the world to observe what Colombia was like behind the headlines. Until the global financial crisis, the data looked promising and improving political stability and relatively fast economic growth in its largest trading partner, the United States, saw Colombia's gross domestic product growth rise to 7.6 per cent in 2007 from 4.7 per cent in 2004. Hard hit by the financial crisis, GDP growth then fell to 2.5 per cent in 2008 and is expected to have been flat last year, before picking up to 3.5 per cent this year. Despite the crisis, Juan Gonzalez, the foreign investment vice-president of Proexport, said Colombia's foreign direct investment was expected to have reached between US$9 billion and US$10 billion last year, not far short of the US$10.6 billion in 2008. First-half foreign investment slipped 9.6 per cent year on year to US$4.5 billion. 'It is still good for Colombia, considering the worldwide decline in the first half was 30 to 40 per cent,' he said. About 70 per cent of foreign investment last year was ploughed into the mining and oil and gas sectors, most of which came from North America. China was placed 44th among Colombia's largest foreign investment contributors in 2008, with a paltry 0.03 per cent share of the total. This ranking came despite US$1.3 billion worth of asset investments oil firms China Petrochemical Corp - the parent of listed Sinopec - and Sinochem Corp in Colombia in the past few years, because the payments were made to non-Colombian shareholders of the assets. But China's investment in Colombia is expected to rise as these companies spend more to develop the assets' resources. In the wake of the global financial crisis, Colombia realised it needed to diversify away from its dependence on the US economy, and the country is now benefiting from growing China investments, in line with the trend in its more developed neighbours such as Brazil and Peru, which have closer economic ties with the mainland. Like Colombia, Brazil also has lots of arable land, water, energy and natural resources, but is poor in investment capital. Anders Haagen, a Hong Kong-based partner of Brazilian investment bank BTG Pactual, said Brazil's trade pattern had oriented more towards Asia after US demand weakened. Because of the great physical distance between China and Brazil, the two countries had a 'virtual water' trading relationship, he said, where water-intensive agricultural products such as beef are exported to China which lacks water and arable land. In return, China provides funds and engineering expertise to help Brazil build railways, pipelines, roads and ports to aid the export of agricultural and mining products to China. But both Brazil and Colombia are running mounting trade deficits in favour of China, as the latter's manufacturing prowess meant growth of finished goods exports to the South American nations surpassed that of China's imports from them. Many Latin American countries are pressuring Beijing to increase investment in the region, especially in manufacturing, to offset the trade deficits. Oswaldo Rosales, the director of the international trade division at the Economic Commission for Latin America and the Caribbean, told the third China-Latin America Business Summit in Bogota in November last year that the region was looking for China to transfer its manufacturing technology and know-how through investment. The region also hopes Chinese investment will allow it to participate in its manufacturing industry chain serving North American and European consumers, such as through products assembly and processing. Colombia hopes to attract investment in biofuels, cosmetics, information technology, tourism and infrastructure sectors, by offering tax concessions in free trade zones and for certain industries. For example, companies that invest in new hotels or upgrade existing ones are exempt from paying profit tax for 30 years. Ricardo Duarte, the vice-minister of commerce, industry and tourism, said Colombia expected last year's business and tourist visitors to have risen to three million from 2.5 million in 2008. Tourist arrivals jumped to 1.5 million in 2008 from 600,000 in 2002. It expected to add between 15,000 and 20,000 new hotel beds by 2012, from 55,000 at present, he added. Colombia is a key producer of palm oil and sugar cane, its main sources of biofuel raw material. The government plans to greatly expand the planting of cassava, a plant with starchy roots suitable for ethanol biofuel production. Its huge flower-growing industry and flora bio-diversity also provide the raw material for cosmetics industry development. The nation's mountainous geography in key population centres - with capital Bogota located 2,640 metres above sea level and about 700 kilometres away from main ports in the north coast - means many people have to rely on expensive air transport since road transport is too time-consuming. The government has planned several big regional highway projects worth almost US$10 billion to slash transport times. The capital is also preparing to build a subway system to complement an existing above-ground mass-transit bus system called Transmilenio. Other train systems are also planned to link Bogota with suburban areas. On another front, Colombia is seeking to expand exploitation of its rich hydro electricity, oil and mining resources by inviting foreign investors to bid for projects. Violence in the past has hampered investment in mining projects. Some mainland companies are starting to look at opportunities on offer in Colombia. Ding Wei, the business director of China National Gold Group, the nation's largest gold producer, said he was interested in Colombia's gold and copper projects. China Three Gorges Corp, the developer of the nation's largest hydro power project, was quoted by Colombian media as having an interest in bidding for a 57.6 per cent stake in power generator and natural gas supplier Isagen by the Colombian government. Other hydro project developers Sinohydro, China Three Gorges and HydroChina are among 22 companies from around the world to have shown interest in participating in the construction of the US$2.29 billion, 2,400-megawatt Pescadero Ituango hydro power project. It was a big project, considering Colombia had a total of 14,000MW of power-generating capacity, said Sebastian Londo?o, the director of internationalisation of the regional government of Antioquia where the plant is based.
