How will Colombia move forward economically? | Felaban 2014 | Video
From the conference floor of Felaban 2014 in Medellin, Colombia, World Finance speaks to the country's Finance Minister, Mauricio Cardenas, to ask what's next for its economy
Colombia has faced a tough time trying to convince the international community to give it post-conflict economic support. But could its fortunes be about to change? World Finance travels to the Felaban Conference in Colombia to find out.
World Finance: A spirited reception greeted Colombian President Juan Manuel Santos’ European tour. Yet, despite the fanfare, lackluster support followed his request for post-conflict economic support – aid pegged at $45 billion dollars. German Chancellor Angela Merkel was the only European leader to make any financial commitment.
Vague optimism coloured Treasury Minister Mauricio Cardenas’ statements on how the money would be spent at a recent banking conference in Medellin. Understandably so as peace talks halted in the wake of General Ruben Alzate’s suspected abduction by guerilla opposition group FARC.
Mauricio Cardenas: We are looking at international support for building peace and reconciliation in Colombia. That’s why we think we have to complement our internal funding which is based on taxation of Colombian business and individuals that are contributing to our tax collections.
We are looking at international support for building peace and reconciliation in Colombia
World Finance: It’s a strategy that has allowed the country to outpace its Latin American neighbours as the fastest growing economy. Transcending the end of the ‘easy cash’ booms involved single digit, steady Asian-style growth in the oil and coal sectors. Though socioeconomic disparity and low employment are issues the government continues to grapple with overdue taxation programmes are slowly turning the tide. Now with the end of civil war on the horizon – the government is focused firmly on attracting even more foreign direct investment.
Mauricio Cardenas: We are at the beginning of major initiative to build infrastructure in Colombia which will require more financing from local and international sources, and understanding that the Basel 3 regulations will provide some restrictions from bank financing of infrastructure. We’re ensuring that we will also use pension funds and capital markets to finance infrastructure.
World Finance: Though the president’s global tour focused on Europe, recession-ridden Japan has partly pegged its own growth prospects on stronger relations with the Latin American nation. It’s a relationship this government plans on further exploiting whether peace comes tomorrow or years down the road.
Mauricio Cardenas: We’re considering the possibility of new bond issues for sovereign debt in Japan. Prime Minister Abe was here in Colombia not too long ago and we discussed a special guarantee facility that the (inaudible) can provide to our sovereign deb. So we are considering bond issues in the Japanese market in the future.
World Finance: A future for Colombians, worth getting excited about. Kumutha Ramanathan, reporting in Medellin, Colombia for World Finance.