Perspective Luis J. Rodriguez
As the Uribe era comes to an end, history will judge whether or not his time in power radically changed the future of our nation. However, it is indisputable that the Colombian stock market and its investors will be eternally grateful for his work as president.
Foreign policy has been the weakest link of the 8-year Uribe administration, which has achieved little and lost a lot on several areas ranging from economics to human rights. Nonetheless, one of the most surprising mistakes of the current administration has been its offer to sell electricity to Venezuela.
There is little chance for a free trade agreement with the United States this year, despite the hope Colombian politicians and diplomats continue to express. In fact, the almost blind hope there will ever be an FTA is making Colombian politicians look like fools.
The easy returns on financial instruments seen last year will be harder to achieve this year, as the liquidity-driven rally is almost over. The overvaluation and cyclicality of some of these instruments, and political uncertainties, will have a negative impact on returns.
Colombia's central bank, the Banco de la Republica, is making a number of errors in its monetary policy. One of them is its liberal use of the country's benchmark rate to stop the appreciation of the peso.
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