Sabrina Escobar

Latin American equities are having a moment, and Colombia is no exception.

The Global X MSCI Colombia ETF has gained 23% in the past 12 months, slightly outperforming the S&P 500.

Latin American markets, including Colombia, have generally benefited from investors looking to reduce exposure to oil imports from the Strait of Hormuz, as well as the weakening U.S. dollar. Colombia's rally also has to do with its upcoming elections, and investors' anticipation that a more markets-forward candidate might win.

When leftist president Gustavo Petro took the helm in 2022, critics said that the country's investment outlook would dim. The president's economic scorecard is mixed. Economic and foreign direct investment growth has been sluggish, but better long-term inflation control, strong tourism growth, and social equity policies (such as a record 23% increase to the minimum wage) have boosted the president's popularity in recent months.

A new round of elections is coming up on May 31, with potential runoffs in June. Petro can't run for reelection under Colombia's constitution, but leftist candidate Iván Cepeda is widely expected to take up his administration's economic mantle, which hinges on shifting away from mining, oil, and coal toward an economy based on agriculture, tourism, and renewable energy. Polls have Cepeda in the lead against conservative candidates Abelardo de la Espriella and Paloma Valencia.

I spoke with Sofia Cañon, Colombia's acting vice minister for trade, at an investor conference the Colombian government held in New York City earlier this month. She touched on everything from her thoughts on a new regime in Venezuela, to Colombia's China strategy.

This interview has been edited for length clarity. A condensed version of this interview was published this morning in the Global Signals Newsletter. You can sign up here to receive the weekly dispatch that helps investors navigate volatility with confidence.

What are your government's current investment goals?

We have achieved something very important, which is recomposing our investment matrix. Before, investments were focused on oil and other extractive sectors. Today, investments are more focused on potential growth avenues, such as services and manufacturing. We're using incentives, decrees, and tariff discounts to attract new manufacturing plants to produce things like cars and motorcycles within Colombia.

Many investors say a center-right government will make Colombia even more attractive for foreign investment. How would you respond to that feeling?

When this government came in, people first thought investment conditions were going to change. In these three years, our exports have grown, helping increase added value in employability and economic development. The competitive advantages of Colombia will remain, no matter the government.

What are those competitive advantages?

We have two oceans. That's a geographical advantage that, regardless of economic or political conditions, is fantastic. We have trade agreements that allow us to reach more than 60 markets. We also have a very skilled talent pool. For instance, we launched a plane repair project in Rio Negro, made possible because we have specialized aeronautical technical schools.

There are also some very favorable economic conditions at the moment. Corporate profitability has improved, and there is high liquidity in the market. Investor risk is low because shares trade at very low multiples, meaning they still have a chance to grow.

There's some concern about President Petro's desire to remove Colombia from the Investor-State Dispute Settlement $(ISDS)$ system. Wouldn't that make investments in the country riskier?

Although the president has made reference to this, we are still reviewing the path forward. But the most important thing is that we have strategic relationships with the United States and Venezuela that are dictated by trade agreements. Investment protection is part of the free trade agreement we have with the U.S., and this will not be touched under any circumstances.

Talk to me about Venezuela. How do you see the relationship with your neighbor now that the country is reopening more to private investment?

Our intention is to rebuild a complementary economy with Venezuela. Venezuela is in a transition period and has many institutional challenges, while Colombia has strength and maturity in its institutions. That's where we can be a great ally for those who want to take advantage of the opportunities that the Venezuelan market is generating. We have many North American companies based in Colombia that generate export products of different types. We're trying to strike an agreement to expand our tariff preferences [with Venezuela] and improve access conditions for products such as added-value food items and building materials.

Venezuela can also be a great ally for us. Through their strengths in natural resources, they can enable great projects in Colombia, especially in energy and gas. And we can help them source high-skilled talent, given that there was a lot of talent leak in these sectors. Since our border is so extensive and we have similar ecosystems, we can also talk about multidestination tourism or joint agricultural capacities, specifically in palm oil. It's possible we bring in Venezuela's inputs and transform them in Colombia to make a joint export.

What is your trade strategy with China?

We have a very large deficit with China, which we're trying to decrease. We have two main strategies to try and do that. We're strengthening our tourism from Asia as a way of exporting high-quality services and closing this gap. We're also trying to open new markets. When you manage to introduce a product to China, well, that's a market of 1.4 billion people. So that's where we're working in sectors like cacao. It is not easy. There are challenges in admissibility. But once you manage to penetrate the market, that's when we believe that many changes will come in this cacao sector.

We are also sending new products to Japan, to Korea that highlight our variety and diversity of agricultural products -- including some transformed with added value, such as processed pulp and cacao derivatives. Diversifying our export basket has been one of the main goals of this administration, and one in which we have been the most successful.

Colombia has had to grapple with some serious crime issues over the past few decades. What do you think about those problems moving forward, and how they interact with the broader economic picture?

Security has always been a very important challenge in Colombia, and we have to keep working on that. The best way to improve that is by creating opportunities for the local economies where violence is concentrated.

We have a lot of hope for developing the cacao market. The areas where cacao can grow are precisely in the most affected areas, and we think we'll see an incredible transformation in developing this new Colombian coffee. That's why these investments are so important, and of course, a big effort on the government's part to open new markets and help make local economies productive and sustainable.

This is why it's so important that we're diversifying our export basket. Because while the extractive sector is also important, it does not generate as many jobs as agriculture.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 14, 2026 13:00 ET (17:00 GMT)

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