Swine flu: Sick In Colombia?

Swine flu: Sick to Colombia? April 28, 2009 The Colombian economic policy continues to look to the long term. However, you can not ignore the problems that are presented in the short term and have affected their growth capacity. What do you see the swine flu and kidnappings with Colombian economy? Perhaps much more than you can imagine. Both non-economic factors affect it, the first negative and second, because its evolution, positive way. Swine flu spreads quickly worldwide. At the moment, from Argentina we as viewers of this situation. However, the scourge of dengue in Argentina have concerns for a while. Swine flu is so very strong that not only has affected so far to many people (causing over 150 deaths in Mexico) but also has beaten the markets. Also coins as was the case of the Colombian peso which opened yesterday its time to weaken against the dollar by this, since this disease increased the risk aversion of the market to the new environment of uncertainty that has been generated.

The influence that swine flu may have on various sectors of the economy is not a minor issue. In Mexico represent a blow at a more inopportune than the economy. In Colombia, for now a threat, but a serious threat. Various sectors of the Colombian economy and are concerned about what might happen, including the tourism sector has been growing apace. As I read different newspapers on the internet to write this article on the Colombian economy, I came across an article published on the site of the newspaper "El Universal? giving an account of the reduction by 75% of kidnappings in Colombia so far this year. I think the news is good not only in terms of security of all Colombians, but also from an economic standpoint. It's that insecurity threatens not only the population but also an enemy of investments. And Colombia, which is making every effort to consolidate the progress of the economy will be greatly benefited by the reduction of violence in the country.

Another good news for Colombia are thinking about the post-crisis that is making progress on free trade agreements (FTAs). Last week, Colombia ended with Japan's first round. In the U.S., since the administration of Barack Obama emerged a commitment to work towards the concrete trade agreement with Colombia. These FTAs ​​increase the potential outward expansion of the Colombian economy. They also increase the attraction of foreign investors with broad access to foreign markets would be achieved with this Colombia trade policy. I have no doubt that Colombia is taking good steps to consolidate its long-term growth. The Uribe government is taking the right decisions in this regard but also doing so in the short-term decisions. Is that while in Colombia are laying the foundation for achieving sustained growth, the immediate and urgent to address the context of crisis (now compounded the problem of swine flu). Within the gloomy picture presented by the International Monetary Fund (IMF), gave good news to Colombia to ensure that the economy will not suffer recession this year, but neither will grow.

This projection of the IMF, under the circumstances, not be so bad for the country. The bad news is the growth forecast for 2010 as the IMF only expects the Colombian economy to expand by 1.25%. Only in 2011 the economy would charge strength to grow at 4%. Surely, my vision of the good prospects for the Colombian economy in the medium and long term, will not conform to the families of the country that currently suffer from unemployment caused by the crisis. It would be nice to be reminded of that famous phrase from Keynes: "In the long run we are all dead?. Indeed, the unemployment rate in Colombia is high. It is 12.5% ​​and the outlook is to the upside. In relation to it, I found the site of "Caracol Radio?, Statements by the Finance Minister Oscar Ivan Zuluaga warning that unemployment in the country will inevitably continue to rise as a result of the global economic crisis and the sharp slowdown Colombian economy. Undoubtedly, Zuluaga is not a specialist in lifting the mood of the population and manage expectations. Probably such statements have increased the panic of the population with the consequent impact on household consumption.

The good news is that the Colombian government has not stood idly in front of this situation in recent days has arranged a series of measures to contain the impact of the crisis. One has been to resort to the IMF for a loan of U.S. $ 10,400 million to be approved in May. It may seem a minor fact but from my point of view, is very important because it helps insulate the Colombian economy of possible worsening of the crisis. The Bank of the Republic makes its contribution to the cause and is pursuing an easier monetary policy. This week the Monetary Policy Committee will decide on the benchmark interest rate. According to the latest Reuters poll of 33 of the 40 analysts surveyed anticipated an interest rate cut of 100 basis points, which would be located the same at 6%. ¿Contribution to the cause? Perhaps a cut of that magnitude could jeopardize the Colombian peso, which would risk an excessive weakening of causing a potential inflationary risk. Surely, the Colombian economy will observe the best performance in Latin America once the current crisis.

But meanwhile, the Uribe government must carefully address the problems that both the international financial crisis and now, swine flu, is causing the economy to prevent damage to generate a deep and difficult to repair. In his actions, the Uribe government responsiveness show you what is in extreme situations.