Just months before he steps down after four years in office, President Andres Pastrana can look back on his government’s economic record with some comfort. Colombia’s economy – the fifth largest in South America – is in better shape than for many years and inflation is at its lowest in four decades.
The president has steered his country away from the sort of disaster that befell bankrupt Argentina. The Colombian economy is in fact expanding at about three times the Latin American average.
International donors have already signalled their willingness to assist in keeping the country on track. The International Monetary Fund (IMF) has approved Colombia’s economic and fiscal policy, including a 2002 public sector deficit target of 2.6 percent of gross domestic product (GDP). Growth is forecast at two percent.

Finance minister Juan Manuel Santos says: “The most implacable judge of economic policy has praised the economic policy of Colombia, the way we have been executing this policy, and the programs for the immediate future and medium term.”
The minister says, however, that growth is still “not satisfactory” and is too low to reduce the unemployment rate, running at about 14 percent in the fourth quarter of 2001.
The IMF has approved the disbursement of $1.5 billion for Colombia as part of the macro-economic reform program now under way. This follows a visit by IMF officials to Colombia late last year for the third periodic review of the country’s performance.

Colombia signed its three-year $2.7 billion Extended Fund Facility agreement with the IMF in December 1999. In that year, the economy shrank by 4.3 percent and the budget deficit mushroomed to 5.3 percent of GDP. Even so, the country has not drawn on the available funds, which are to bolster reserves against external shocks, rather than financing government spending.
Central bank governor Miguel Urrutia says the IMF is not unduly worried that last year’s public sector deficit may be just outside the target of 3.3 percent of GDP. “The IMF is satisfied with regard to the achievement of the fiscal deficit,” he says.

The next IMF review is set for September 15 – after the next president takes power.
Colombia’s economy took a dip in the last quarter of 2001 due to the slowdown of the global economy and that of the US, which buys a large portion of the country’s exports. But the government believes that, by the middle of this year, it will meet 80 percent of its federal deficit target and 90 percent of its structural reforms.
One of Mr Pastrana’s cherished ambitions has been to achieve a lasting peace in his country; he dedicated his presidency to peace negotiations with the biggest guerrilla group – the leftist Revolutionary Armed Forces of Colombia (FARC).
However, like his predecessors, his period in office has been dogged by the civil unrest that has claimed 10,000 lives in the past decade. Mr Pastrana, whose father was also president, is barred by the constitution from standing again.

Liberal Party candidate Alvaro Uribe, who is standing high in the opinions polls, could win the presidential election, which is scheduled for 26 May.
To be elected, a candidate must receive half of the total number of votes plus one. If no one achieves this, the top two candidates face each in a run-off on 16 June.
A new web site provides information and analysis about the country’s electoral process.
Meanwhile, further donor help is coming from the World Bank, which has approved a $32 million project to support the Colombian government’s efforts to reactivate the rural economy, reduce poverty and foster peace.

“About 80 percent of the people living in Colombia’s rural areas are poor,” says Olivier Lafourcade, World Bank director for Colombia, Mexico and Venezuela.
“This project will help the fight against poverty by creating jobs and new sources of income, and thereby promoting social cohesion in rural communities.”
The scheme will also improve farm infrastructure, irrigation, aquaculture, greenhouses, mach-inery and equipment, and will also fund agricultural studies. It is hoped that the creation of jobs for the landless poor will end the violence in the countryside.
Colombia’s exports for the first 11 months of 2001 were worth $11.3 billion, down 4.8 per cent on the same period of the previous year. This was largely due to a fall in oil exports, which was blamed on pipeline bombings by guerrillas.

Foreign trade minister Marta Lucia Ramirez de Rincon says a strategy for increasing exports by becoming more competitive has been devised in collaboration with the country’s producers. “One result of this competitive policy is the excellent performance of the Colombian non-traditional export sector,” she says.
“It has grown by more than 15 percent which, compared with the rest of Latin America, is very positive. It shows that government policy is working and that there is a highly committed and productive export sector.”