The rising star of the Latin American markets

Juan Manuel Santos Minister of Finance and Public Credit

Undoubtedly one of the key reasons for Colombia’s renewed economic growth over the past year was the incorporation of Liberal Party leader Juan Manuel Santos in the Pastrana administration to take over the Finance Ministry portfolio, a move which ended a lingering political crisis that had much-needed economic reforms bogged down in bipartisan wrangling.
Mr. Santos’ stellar performance was underscored recently by U.S. Under Secretary of State for Economic, Business and Agricultural Affairs Alan Larson in an August 3rd hearing before the U.S. Senate Finance Committee.
“Finance Minister Santos,” Mr. Larson testified, “has played a key role in implementing the Pastrana administration’s economic agenda, combining budget cuts with needed structural reforms covering taxation, transfer payments to sub-national governments, and the social security and pension systems.”

EXTERNAL DEBT SPREADS

According to Mr. Santos, the main thrust of each of those measures has been presidential support and a commitment from the leading party majorities in Congress.
“It has restored successful governing and has led to far-reaching structural reforms and a substantial fiscal adjustment with firm International Monetary Fund support over the past year,” notes Mr. Santos.
And despite internal conflict, drug trafficking problems and the negative impact in recent years from the international economic environment, “we have delivered the economic agenda towards fiscal sustainability as a condition for growth. The result is economic stabilization: inflation, interest rates and exchange rates are stable and predictable,” adds Mr. Santos.

The Finance Minister says the essence of Colombia’s economic policy of fiscal reform and macroeconomic stabilization is a desire to attend the needs of the people. “Stabilization means stimulation to investment and growth,” he explains. “But economic growth is not enough,” Mr. Santos adds. “There is a high responsibility from government to allocate its fiscal resources in the right place. Fiscal funds should go where they are socially efficient in order to achieve social prosperity.
The government, according to Mr. Santos, should stay out of activities where the private sector can do a better job.

“Government must be dedicated to stimulating growth in the long run in the health, education and security sectors among others. Rather than spending in inefficiency and corruption, good resource allocation is the way to better income distribution and social prosperity,” Mr. Santos concludes