Citibank thinks Colombia is the most risky market in Latin America

arfgoblue says on Jun 2, 2008, 20:58:

Hardly...they are an effective policy instrument to prevent short term "hot money" flows that inflate the currency and cause inflation without the meaningful tangable employment/other effect as normail FDI (Foreign Direct Investment).

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arfgoblue says on Jun 2, 2008, 22:51:

I don't see any significant negatives...the only money that would be dissuaded is money that isn't beneficial for Colombia anyway.

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miamimike says on Jun 2, 2008, 23:03:

I've heard that(security, lack of) is a big reason why eBay&Papypal have not went into Colombia, even in the new and improved version of Colombia. While they have the eBay affiliate "Mercadolibre.com" presently in place, its a quasi-eBay and not the real deal.

On Sept 17, 2008: Senator John McCain said, as he had many times before, that he believed the fundamentals of the economy were "strong."Hours later he backpedaled, explaining that he had meant that American workers were Strong.

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rocinante says on Jun 3, 2008, 05:37:

The raising of deposit requirements hurts equities (which have tremendous upside potential anyway) and adds a slightly higher speed bump than the speed bump already there to the fixed income investors, argfoblue is correct in that the 2 year hold put's a damper on Hot Money blasting in and out on a whim. Buut the one thing it really does is curb COP volitility meaning the peso will gain slower.

The curbing of volitility shows a MORE stable and steady economy because the COP chart will be more predictable. Long term serious investors LIKE that steady stability thing. Also this helps out the Colombian banks who are receiving a 10% increase in free money, in essence raising the gringo tax if you will. In other words "you foreigners are are taking advantage of something we have here and we want to make MORE money on it."

However it is still attractive to foreign investors.

Unless the Central Bank pegs the peso (which ain't happening), or if the US tremendously increases it's GDP, or if Colombia falls in the toilet, little attempts like this just retard the inevitable and put more money in the Colombia economy and the banks here.

Quote from the other article that people seemed to miss: "A year ago, the government imposed capital controls on foreign portfolio investment in a bid to stop the peso's appreciation. In spite of the measure, the peso gained 11% against the dollar in 2007."

Citibank's strategist can say what he wants and hopefully the the credit and political rating will be recognized for what it is when the time comes. Colombia the nation is gaining nicely and so is the Colombian peso. Credit rating upgrades are inevitable and not decided by Citi.

Just how does a deposit requirement directly affect a country's ability to pay its debts?

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Not that the US president actually runs the US." Feb 5, 2008

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Rikito says on Jun 3, 2008, 07:23:

I have an account with Citibank and only have the minimal amount in the account. Citibank is the cause of many if the problems they say are in Colombia. In most countries banks actually control the government and dictate many of its policies.

For example, in the U.S. the Federal Reserve is the most powerful economic and polictical force in the country. More powerful then the President and certainly more powerful thran congress. So I don't buy the pity me crap that Citibank puts out.

It is not life that matters, but the journey.

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tejasmarcos says on Jun 3, 2008, 07:43:

hmmmm, strange statement considering their former aggresive plans. at second thought, the statement sounds greed induced since it will limit their investment abilities. government yields constraint and mega global investor smears them slightly for doing so - sounds about right...

Steven Puig, President of Citibank Colombia:

Testimonies

“Colombia is a key market for Citibank, as it must be for any entity that aspires to be a leading player in Latin America"




Steven Puig
President of Citibank Colombia

Citibank’s presence in Colombia has continuously grown since 1919. Today, our activities are focused on both; personal and corporate banking. Our assets in Colombia total approximately US$1 billion, and our profitability has consistently been among the best ones in the market.

Colombia is a key market for Citibank, as it must be for any entity willing to have a leading role in Latin America. The importance of Colombia in Latin America is unquestionable: the country’s relatively large internal market assures an interesting base for personal banking operations, while the country’s internationally competitive productive base and host of leading Andean companies, constitute an attractive base for our corporate business.

These factors are essential, yet insufficient themselves to explain our long term presence and successful experience in Colombia. To give accurate testimony the following have also been key factors:Availability of Top Professionals: In banking activities, our most important asset is our staff. The quality of Colombian professionals is notoriously high. Throughout Latin America, professionally developed Colombians have occupied many key positions managing our diverse businesses.

Coherent Economic Policies: On the long run, Colombia has proven to have well-focused market-oriented economical policies. Furthermore, many financial institutions are Citibank customers; in any financial system it is common to carry-out transactions among financial institutions.

The factors summarized above are not exclusive to Citibank. This is evidenced by Colombia’s foreign investment data. During the past four years, the financial sector has been one of the top sectors for foreign investment in the country. This includes banks, pension funds and insurance companies, all of which require similar foundations for success.

Finally, while Colombia has proven to be an attractive market for Citibank, I would like to highlight why foreign investment in the financial sector is also attractive for Colombians. If our presence was not beneficial for the country, on the long run, receptivity would have surely declined.

Global & Regional Networks: Our presence offers a direct link to Colombian companies that operate in or trade with other countries, facilitating their business needs.

Responsibility: Having a physical presence in Colombia increases our responsibility in any international undertakings we may have with Colombian companies or government entities. It also facilitates solutions when problems arise. I recall an incident in another country where the Central Bank was unable to transact through one of its banks in New York due to a strike that blocked the Central Bank’s employees’ access to their offices. Given our local presence, we were able to assure that Central Bank’s operations were executed that very same day.

Innovation: It is worth to note that international institutions exercise “successful transfers��? of products and practices that have yielded good results elsewhere.

Training: International Institutions train local professionals, many of whom are sought by local institutions; many offer specific training on topics that are more developed in other markets.

Regulatory Environment: Global practices often serve as good reference points for local regulators in developing new norms for their market.

Community Activities: This is by no means a benefit exclusive to international investors, yet, every contribution is beneficial for those who are neediest in any country. In our own case, in Colombia, we have had the opportunity to build 12 schools in remote areas of the country, support micro entrepreneurs through recognition programs and direct investment in micro lenders, support literacy campaigns, provide housing to low income families and support health programs for children.

Today Colombia is a country that is focused on addressing its key economic, social and security issues. While our experience over the past 84 years has been very positive, we are confident that it will be even better in the future.




Last Update: 2006-9-11

trying to walk a straight line on sour mash and cheap wine...

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juancegomez says on Jun 4, 2008, 10:45:

Paypal does actually allow Colombians to use their service (or at least to pay/send money through it, for online shopping and the like), since last year I believe.

I still hate their customer service, or lack thereof, so it's all absolutely useless for me right now, but that's that.

Don't know, or really care, about eBay...

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robi666 says on Jun 4, 2008, 10:59:

Paypal is just a legalized scum.
I had problem with them in the past: absolutely useless for both the buyer and the seller.
I do not use it anymore.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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Titofijo says on Jun 4, 2008, 15:52:

PayPal works fine for me. Maybe because you're Italian, that you had problems

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robi666 says on Jun 4, 2008, 16:14:

Well, this is a part of the problem:

PayPal Buyer Protection Policy states that customers may file a buyer complaint within 45 days if they did not receive an item or if the item they purchased was significantly not as described. If the buyer used a credit card, they might get a refund via chargeback from their credit card company.

According to PayPal, it protects sellers in a limited fashion via the Seller Protection Policy. In general the Seller Protection Policy is intended to protect the seller from certain kinds of chargebacks or complaints if seller meets certain conditions including proof of delivery to the buyer. PayPal states the Seller Protection Policy is "designed to protect sellers against claims by buyers of unauthorized payments and against claims of non-receipt of any merchandise". Note that this contrasts with the consumer protection they claim to offer. This policy should be read carefully before assuming protection. In particular the Seller Protection Policy includes a list of "Exclusions" which itself includes "Intangible goods", "Claims for receipt of goods 'not as described'" and "Total reversals over the annual limit". There are also other restrictions in terms of the sale itself, the payment method and the destination country the item is shipped to (simply having a tracking mechanism is not sufficient to guarantee the Seller Protection Policy is in effect).

Have a look at http://www.paypalsucks.com/ for some horror stories and explanations.

They are absolutely useless.
Buyer: you get a much better protection with a credit card chargeback
Seller: they do not fight or refund seller for credit card chargeback

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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tejasmarcos says on Jun 4, 2008, 17:11:

i tried to buy a used landcruiser a few years back using my airmiles credit card and paypal - absolute nightmare. deal blew up, caused by paypal and it took a few months to get all the BS fees refunded to my credit card. i was lucky my credit card company went to bat for me otherwise i would have gotten hosed for about $500 in BS fees from Paypal.

* i only use them for crap under $20 now......

trying to walk a straight line on sour mash and cheap wine...

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robi666 says on Jun 4, 2008, 17:48:

I bought an amplifier from Canada, to get it delivered to the States.
After accepting the payment, the seller did not want to send it: an amplifier bought by an Italian living in Colombia to be sent to an unverified address in USA. So, I called him, offered to fax my document, but no answers.
So, I tried to get my money back from PayPal. They said it would have taken 40 days, no insurance against the money currency exchange, fees, etc.
WTF? I pay an amplifier and it is not delevered and they want to apply a fee to me?

So I just did a chargeback on the visa. Apply those fees to the seller!
Much faster and easier. And I'll never use paypal again.

Paypal absolutely hates chargebacks on credit card. It destroys their business.

Again, being from Europe is only a part of the problem and makes things worse.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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jorgegdiaz (☼Travelguide writer) says on Jun 4, 2008, 17:54:

miamimike says on Jun 6, 2008, 06:55:

While the Concept is good,Paypal went to hell with a good thing, especially after eBay bought the company. This was done under the reins of Meg Whitman as CEO of eBay.

On Sept 17, 2008: Senator John McCain said, as he had many times before, that he believed the fundamentals of the economy were "strong."Hours later he backpedaled, explaining that he had meant that American workers were Strong.

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rocinante says on Jun 20, 2008, 08:50:

This is the ass wipe. Here is yesterday's news:

http://poorbuthappy.com/colombia/post/colombias-credit-rating-raised-t...

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Not that the US president actually runs the US." Feb 5, 2008

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