Colombia success story is missing something

There is perhaps no greater success story in the world over the last three decades than Colombia. To see this, just stand in the middle of the Plaza de Bolivar in the centre of Bogota.
In 1988, there was a gaping hole along one entire side of the square. That was where the Palace of Justice had been, before guerrillas entered, killed some supreme court justices and took other hostages, prompting a confrontation with the army that left about a hundred dead and the building a smoking wreck. Traffic was acutely congested, in part because traffic lights were smashed so that fragments of green glass could be sold as emeralds.
Much of Colombia’s territory was in the control of either guerrillas or paramilitaries, fuelled by all-powerful drug cartels. Violence was
endemic.
Returning to the square, there’s new and elegant Supreme Court building where that wreckage had once been, part of an ambitious urban regeneration that has created a vibrant cultural quarter. Other changes: Traffic moves smoothly — at least by the standards of a large Latin American city — through green streets, and Bogota is at last about to build a metro (the second city Medellin, once notorious for the drugs trade, already has one, built as part of an even more remarkable renaissance). The new rapid-transit line will transport a growing middle class accustomed to much the same standards of living that people expect in North America into a downtown of glistening and modernistic skyscrapers.
The changes are the outward signs of a remarkable transformation. Colombia is now established as a middle-income country, growing faster than any other major economy in Latin America. With a population a bit larger than Spain’s, it also is now South America’s second-biggest economy, blessed with relatively stable politics, natural resources, proximity to the US, and a Pacific coast which eases trade with Asia. The currency is stable. And while the three zeros at the end of all the nation’s banknotes are a reminder of serious inflation in the past, it has never lapsed into hyper-inflation, and — alone among major Latin American economies — has never defaulted since the second world war. Most important, the savage war that dragged on for decades, one of the bloodiest that the Western Hemisphere has ever witnessed, appears at last to be winding down. The largest guerrilla group has handed in its weapons, and an uneasy peace is holding in much of the country. The homicide rate is less than half its horrific level when I last visited. And Colombians can begin to enjoy themselves. Thirty years ago, the most famous Colombian was Pablo Escobar; now that title belongs to Shakira.
Having come so far, however, Colombia is finding it hard to proceed much further. It wouldn’t be the first country to fall into the “middle-income trap,” and it is dogged by the familiar problems of Latin America, as well as lingering issues from its own troubled past. It is deeply unequal. Rural Colombia, which bore the brunt of the violence, remains untouched by the improvements that have blessed the cities. And while an influx of refugees from the economic disaster in neighbouring Venezuela has stimulated the economy, it is also destabilising and increases social tensions.
The last few months in particular have seen street protests against the deeply unpopular right-wing president Ivan Duque. Those demonstrations have been mild in comparison with Chile. With political stability and the rule of law now largely in place, Colombia should have all the preconditions to create the deep capital markets that can fund further growth.
—Bloomberg