Colombia and the IMF
"I am happy to visit Colombia at this juncture to support President Uribe and his government in their efforts to bring stability and sustained growth to the country.
"In the short period of time that the government has been in office, it is impressive that they have already taken prompt actions to address a weakening fiscal position and develop a comprehensive strategy for stability and growth. Because of these efforts, Colombia is resisting well the difficulties in the external environment, and this is all the more remarkable against the background of the internal conflict.
"Thus, while there have been early successes, major challenges remain. In particular, resolving the internal security situation is essential for reviving investment and growth. I have had the opportunity to discuss some of these issues during my stay.
"The President and his economic team have the clear objective of preserving macroeconomic stability as the key element in their strategy to resist adverse shocks. Strong fiscal and monetary policies are critical, and Colombia has strong economic institutions that will help in this regard. Indeed, the central bank has successfully brought inflation down to the low single digit range in Colombia. Significant progress has also been made to strengthen the banking system. These efforts will continue as an essential element to underpin growth.
"Minister Junguito's fiscal program is aimed at ensuring medium-term debt sustainability. The program includes taking decisive measures to create a sound and efficient public sector. The pension system is being reformed and public sector management modernized. These policies will help ensure that the public debt remains sustainable. I am confident that there will be a strong popular consensus for these efforts.
"Colombia's track record for transparency in economic policy making is already a strong one. The fiscal responsibility law that is before congress will serve as another vehicle for transparently communicating to the public the government's medium term fiscal policy commitments.
"Finally, I greatly welcome Colombia's very active fight against money laundering and the financing of terrorism. Colombia has joined the IMF in its action program in these areas, which will strengthen Colombia's international standing and help improve the investment climate.
"We at the IMF support the new government's program and its strong ownership of it. The government has requested a precautionary stand-by arrangement from the Fund, which will also catalyze other international financing for Colombia. I am confident of bringing the program to the IMF Executive Board in the coming weeks.
"We are confident that the authorities will meet the challenges facing Colombia, and we wish the country every success."
IMF EXTERNAL RELATIONS DEPARTMENT