Saturday, 24 December 2011

Forget about Europe Mr Cameron, Colombia awaits

The French and the Germans might yet regret treating the British so badly. The treaty cooked up in Berlin and Paris two weeks ago to cripple London's financial services industry, the engine of the British economy, was highly cynical. Prime Minister Cameron had no choice but to exercise the veto. Britain was not going to pay for the mistakes and overspending of economies in a currency it had the good sense not to join.

The bad behaviour of Europe's bully boys should act as the catalyst for Cameron to lift his gaze away from the failing markets across the English channel.  He should cast his eyes across the Atlantic to an economy whose third quarter growth was just short of 8%, where private-sector optimism is high and where the government actively wants to do business. That country is of course Colombia.

Should Cameron heed this call, he will find fellow Brit and ultra-entrepeneur, Richard Branson already there. Next year Britain`s most popular billionaire will launch Virgin mobile across Latin America, with Colombia a key market.

Britons, Colombia awaits.

Last month President Juan Manuel Santos visited his second home, the UK. Santos cites his time in London both studying at the London School of Economics and working for the Colombian Coffee Growers Federation as the one of the best of his life. Santos is a true anglo-phile.

As reported on this website, during his state visit to the UK, President Santos met Prime Minster Cameron, the Queen and Foreign Secretary William Hague to build stronger and deeper ties between the two nations.

Emerging from the talks Santos and Cameron heralded the start of a new relationship built on security cooperation intelligence sharing and trade. Bogota and London had committed to grow two-way trade to £1.75 billion by 2015.

Cameron must now act to make this happen. What better time than now with the Colombian economy set to record near 6% annual growth, and what better excuse than the Euro crisis to spur the Brits to look elsewhere for investment and trade.

While the global economy in 2011 has stumbled towards its recession death-fall and with the outlook for 2012 worse still, for Colombia this has been has 12 months of record breaking economic success. GDP growth is running at pre-2008-crisis levels and is projected to grow by 5% next year, even more impressively, foreign investment will reach 15 million dollars by the end of the year. The buzz-word in Colombia is stability - something distinctly lacking elsewhere in the world. Santos, this year wrote into law, strict government borrowing limits, leading the World Bank to conclude that the Colombian economy was safer than France's. What's more, inflation is uncharacterisitically low for Latin America at 3%. Confidence in Colombia is also high among the credit rating agencies who earlier in the year bumped the country up to investor grade level. Next year the free trade agreement with the US will come into effect as it is expected will the agreement with the EU.

Despite the rosy outlook, Colombia still has its problems, not least its woefully lacking infrastructure, which it must improve urgently if it is to benefit fully from its access to the biggest markets in the world.  Yet these problems are also an opportunity. Take for example the need for major new transport links - contracts are waiting to be signed, money is promised, profit is certainly there to be made. British construction companies should be champing at the bit to provide their expertise in building the bridges and tunnels that must traverse and dissect this country's extreme mountainous terrain. During Santos' visit to the UK he secured assistance from the British Government on structuring the private, public loan and investment models required to generate the income for the works Colombia must deliver in the coming years. Should British business not be able to capitalise on these links it only has itself to blame.

Despite the alarmist talk from those on the British left, the UK will not be left on the sidelines of Europe. Trade with Europe is not going to go away. The UK's economy is still reliant on a successful continental market. But while the Europeans are losing their heads, the Brits would be wise to seek alliances further afield.

The history of the UK was built on the success of its international trade, of daring to go where others had not yet ventured. Yet in recent years the country has slavishly stuck to the devil it knows best, Europe, and the US. The last time we had a Queen Elizabeth on the throne gold stolen from Spanish ships off the coast of Cartagena filled British coffers. As our more recent economic partners tank, now is the time to hoist up the Union Jack and set sail once more for the Americas.