|
A stitch in time
"In between the rigours of the world economic crisis, which is affecting Colombia too, we have some advantages. Our reserves have grown from US$10.6b to US$23.6b. Our banks deposit insurance system used to cover US$400m, today it covers US$3b - from US$0.39 of cover for every peso of overdue loans to US$1.10 today. Other countries have gone into financial crisis, while our system has grown stronger. And of course, crisis is no stranger to us, as we have been working against it for many years.
Today we know that we must face a negative phase in the economic cycle and watch out for new crises, and so we are pursuing an anticyclical policy of five separate fronts: investment in infrastructure, investment in the social protection network, the maintenance of investor confidence, the financing of the State and employers, and fiscal encouragement.
We will be investing US$285m - 10.7% of our GDP - from public and private sources to create jobs and promote competitiveness. We will be speeding up major highway concession projects, mass transit systems, investments in irrigation and Departmental water plans, to name but a few.
The social protection network is another important issue, because the poor are not to blame for this crisis. If democratic principles are to be credible, we must make an enormous effort to protect the most vulnerable groups and defend them from the worst of the situation.
Building confidence
We have been pushing forward the policy for social cohesion with the same determination as the security policy. Some of the targets we have set for this year are for Families in Action to reach three million people; to open 250,000 new places in our technical training service SENA, over and above the six million places already available; to extend the school dinners programme to 3.9 million children; to increase the funds available to the displaced by US$20m (COP400,000 million); to open a line of credit for low cost housing in the cities and in rural areas for improvements or new construction in strata 1, 2 and 3.
Confidence is our greatest asset in overcoming the crisis, mitigate its effects and come back to normal when it starts to go away. Among our projects we have included the setting up of 25 new Free Zones, bringing the total to 66; the production of 1 million litres of biodiesel and 1.6 million litres of ethanol a day; we aim to sign twenty new agreements guaranteeing long-term legal stability to major businesses, an accelerated agenda for agreements for the promotion and protection of investment, double-taxation agreements and free-trade agreements.
In the financing of the public sector and the employers, Colombia has the advantage of a good name in the international financial community for paying well. We have made progress in cleaning up public finances. During this Administration, debt has fallen from 48% to 22% of GDP. The consolidated deficit has fallen from 4.2% to 0.1%. The central government deficit - the most critical of all, because it includes the payment of pensions - fell from over 6% to 2.34%. We believe that all this should help Colombia to be able to continue to satisfy its need for credit. We have financed 2009 and we are now working on the way to finance 2010.
We are naturally very concerned that the crisis may be a prolonged one, because this might affect our ability to find financing. We therefore believe that the time has come to add new strength to all the multilaterals.
On-going changes
We are making great efforts to finance employers, as a means of protecting jobs employment. So far this year, Bancoldex, Finagro and Findeter, three State-owned second-floor banks, managed with responsibility, have placed more than double the amount of loans than they did in the same period last year.
In the area of stimulus, we should mention that while many countries have hastily introduced incentives to invest, we have been working on structural reforms to our tax system, not with the idea of having a lower flat-rate system for everyone, but retaining its progressive evolution and stimulating investment,. We have also brought in a series of other structural reforms during this Administration, affecting pensions, employment, transfers to the regions and public administration. We have reformed 427 public sector bodies, and this work will continue.
We should see this crisis as an opportunity - an opportunity not to shed bitter tears, to whine and whinge, to immerse ourselves in our difficulties and drown in pessimism. Rather, let us persuade each other to work harder, to work well, to work every hour and every new minute, with greater love for our countries."
Other Articles:
A Call to Action |
