Colombia, A Positive Country

Prepared by:
Affairs Coordinator
Internal and External Communications
Ministry of Foreign Relations

ON THE FRONT PAGE

• PYMES GREW 4% IN 2004: last year the small and medium-sized businesses of the country grew by 4%, which allowed 400 thousand unemployed people to enter the labor market in the second semester. Growth for 2005 will be under 3.5%, as a consequence of the devaluation, and economic conflicts in the country.

• ISA BOLIVIA STUDIES INTERCONNECTION WITH PERU: the Bolivian subsidiary of the ISA Company, whose majority partner is the Colombian government, received approval to begin studies regarding an electrical interconnection with Peru. The request, presented on October 29, 2004, obtained a positive response from the Bolivian Superintendency of Electricity. The design for the interconnection, and the designs for lines, substations, and converter stations cost US $374 thousand dollars. ISA Bolivia has three years to conduct the interconnection studies, and then the Superintendency of Electricity will determine if the project is viable, and will decide whether or not to issue a definitive license for building the lines.

SOCIAL INVESTMENT

• $700 BILLION INVESTED IN THE JUNGLE AND THE PLAINS: this sum, representing roads, schools, health centers, runways, bridges, nutrition and education subsidies, productive projects, and incentives for communities has been invested in half a million poor Colombians in Orinoquía and Amazonía, who have voluntarily eradicated coca plants from their land. The investment includes aid for displaced populations and victims of violence, which has been supported by return programs, emergency humanitarian aid, and comprehensive services.

• IN 2004 THE GOVERNMENT INVESTED $250 BILLION IN THE REGIONS: the national government invested close to $250 billion in the different regions of the country during 2004, in accordance with the National Development Plan “Toward a Community State”, whose goal was to invest a trillion pesos between 2002 and 2006. Independently and through public audiences, each region defined the sectors in which it would invest the resources. In the Departments in the Andean region $100,098 million pesos were invested, representing 40.05%; in the Caribbean region, that figure was $56,344 million, or 22.5%; in the Amazon region, $34,255 million was invested, in the Pacific region $33,088 million, and in the Orinoco region $26,124 million.

• GOVERNMENT TRANSFERRED $168,110 MILLION IN ROYALTIES: based on hydrocarbon production in January 2005, the national government transferred $168,110 million pesos to 18 Departments through the National Agency of Hydrocarbons. The resources correspond to the participation of the territorial institutions in the production of crude oil and gas in the first months of 2005, and included the adjustment for the fourth quarter of 2004. Casanare received $37,349 million, Meta $22,486 million, Huila $17,958 million, Arauca $11,082 million, and Santander $9,348 million. The resources must be applied to health, education, and basic improvement projects. http://www.anh.gov.co/

SUSTAINABLE ECONOMIC GROWTH AND GENERATION OF EMPLOYMENT

• ANDEAN DEVELOPMENT CORPORATION LOANS US $400 MILLION TO COLOMBIA: The Andean Development Corporation approved two credits to finance expansion projects. One of them is for the company Interconexión Eléctrica S.A. for US $150 million, which will seek to build, operate, and maintain two new high tension (500 kv) energy transmission lines. The other credit is for the Reform Program for International Competitive Insertion, executed by the Ministry of the Treasury, to improve the logistical infrastructure of the country in port facilities and telecommunications, and to make updates needed in the financial system in the commercial area as a result of the signing of the FTA.

• FARM CREDITS GREW BY 49%: Farm credits granted by the government to producers in the agricultural sector grew by 49% in the first two months of this year. In January and February of 2004, $180,253 million pesos were awarded in credits, while in the same period of 2005 that figure grew to $267,923 million. Credit to small farmers grew by 114% in the first quarter of this year, with respect to the same period in 2004, reaching $82,882 million. Credits for associations and for farming under a contract increased by 46% during the time period analyzed, going from $23,187 million to $33,963 million. For working capital, $71,949 million pesos were granted in credits.

• US $156 MILLION FOR INVESTMENT IN PORT FACILITIES: over the next nine years, Colombia will invest US $156 million in seaport expansion. These investments are in addition to those made by the private sector, which are predicted to total between US $250 million and US $300 million. Port expansion is basic to the ability to compete internationally, necessary for the commercial agreements being made by the country. Cartagena, Barranquilla, Santa Marta, Buenaventura and Tumaco should officially present a proposal to the national government, keeping in mind two basic aspects: standards to be met in order to be able to compete, and social contributions to the population in the area of influence.

• PASSENGER AIR TRAFFIC GREW 9.09% IN JANUARY: the number of people who traveled by air in the country, both domestically and internationally, increased in January of this year by 9.09% with respect to the same month in 2004. This behavior was in great measure a result of the arrival and departure of international passengers, which increased 18.75% going from 309,396 to 367,393 travelers, which confirms a recovery of confidence in the country. On its part, the movement of domestic passengers grew by 4.60%, going from 664,155 to 694,687 people, that is to say 30,532 additional passengers, a significant statistic when it is remembered that last year also produced significant growth in this area.

STATE EFFICIENCY AND TRANSPARENCY

• ONE TRILLION FOR THE ROADS FOR PEACE PROGRAM: the government is supporting 700 road infrastructure projects in 25 municipalities in 32 Departments in the country, at an approximate value of one trillion pesos. This is being done through the Roads for Peace program, which is part of the social component of Plan Colombia. Through the Civil Aeronautics Administration the program is carrying out 14 projects for improving and paving airport runways at an approximate cost of $20 billion. The program ties in to the productive activities of the municipalities, and generates temporary employment by using local unskilled labor and community participation systems.

• IN 2004 FOREIGN INVESTMENT IN COLOMBIA GREW 34.6%: Direct Foreign Investment (DFI) in Colombia last year was greater relative to 2003, reported the Economic Commission for Latin America and the Caribbean (ECLAC). In 2003, US $1,746 million entered the country, and in 2004 that figure was US $2,352 million. In 2002 investment arrived in the amount of US $2,114 million, implying an increase of 11.2% for 2004. Colombia, Trinidad and Tobago, and El Salvador are the countries where Direct Foreign Investment has made the greatest recovery. In Latin America and the Caribbean, DFI grew in 2004 by 44% over 2003, reaching US $56,377 million, in comparison to US $39,126 million in 2003.

• COLOMBIA INAUGURATES SEISMOLOGICAL STATIONS: Ingeominas installed eight new seismological stations in the country in order to quickly generate seismic threat maps, and to be able to advise aid organizations and regional disaster prevention and attention offices of any indication of risk. These stations serve to increase monitoring of earthquakes, volcanic activity, and tremors in the country by 50%. The government is committed to accompanying the municipalities in the preparation of seismic micro-zoning studies, which will allow for knowledge of the true risk to populations that have been affected by natural phenomena.

(FIN/JHINA/CIE)
March 28, 2005