Colombia has an ambitious plan to “fix” its economy if its next President Juan Miguel Santos does not survive his impeachment, the country’s Finance Minister has said.
Colombia has already lost half of its foreign exchange reserves, leaving it without a stable revenue source for months.
The Finance Minister, Gustavo Mestre, has said the government will spend a lot of money to fund the economy.
Colombia’s foreign exchange revenues have declined from nearly $3bn in 2010 to less than $700m in 2015. “
We will spend more money to fix the problem, and then if we don’t get it fixed we will start over again.”
Colombia’s foreign exchange revenues have declined from nearly $3bn in 2010 to less than $700m in 2015.
The country has had a hard time coping with the collapse in oil prices and corruption scandals involving President Santos and other officials.
The government, which had promised to spend $6bn on its reconstruction efforts, has yet to get a single cent of its budget.
The IMF’s chief economist, Martin Schulz, said Colombia would need at least $3.5bn to fix its economy and he was sceptical of Mestres’ claim.
“In the short term, there are several reasons why the country has no alternative but to go to a financial institution, as it cannot afford the cost of such a move,” he told Reuters news agency.
“However, if the IMF does not act quickly to help the government, the situation will worsen.”
Colombia has seen a sharp drop in exports in recent months as the country struggles to recover from the devastating drought and the recent coronavirus pandemic.
It has also had to import $8.6bn worth of food and other goods from the United States and China.
Colombia is one of the world’s largest exporters of timber and agri-food products.