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Colombia Foreign Debt
Colombia's debt situation, unlike that of much of the
developing world, was manageable in the late 1980s.
Conservative
borrowing strategies and a strong reserve position in the
late
1970s had provided Colombia with the necessary cushion to
minimize
international borrowing in the early 1980s. A willingness
to
refrain from adopting a rescheduling strategy ensured
Colombia's
continued good standing in the international lending
community. The
country preferred instead to incur the cost of slightly
higher
interest rates in order to maintain its credit worthiness.
As of 1988, Colombia's credit standing was still the
best among
the major debtor nations in Latin America. Colombia was
the only
Latin American country to be offered loans from private
banks
voluntarily and was able to draw down debt accounts from
the World
Bank and other public sources without major interference
from the
International Monetary Fund (see Glossary). Colombia's
outstanding
debt, however, was rising in real terms, and there was
concern
among lending agencies that it would eventually reach a
level
incompatible with the government's conservative strategy
(see
table 13, Appendix).
As of December 1986, Colombia's total external debt,
including
private and public commitments, amounted to US$14.6
billion, or
more than double its obligations in 1980. Although this
represented
less than 4 percent of total debt outstanding in Latin
America,
Colombia's debt service obligation, which included
interest and
principal for all loans, more than tripled over the same
period,
indicating the growing burden of these foreign loans.
Colombia's debt service burden grew from 9 percent of
exports
in 1980 to 27.6 percent in 1986. Although this was not out
of line
for debtor nations in general, it raised the issue of
Colombia's
increasing debt problem and supported the policymakers'
goal of
continuing diversification efforts and attracting foreign
investment rather than relying on increased borrowing to
finance
the economy's future.
* * *
An abundance of material exists relating to the
Colombian
economy, of which William Paul McGreevey's An Economic
History
of Colombia, 1845-1930 still provides an unparalleled
historical background. More recent works on general
macroeconomic
topics include Economic Policy and Income Distribution
in
Colombia, edited by by R. Albert Berry and Ronald
Soligo, and
Miguel Urrutia's Winners and Losers in Colombia's
Economic
Growth of the 1970s. Charles W. Bergquist's essay on
the
Colombian labor movement in his book Labor in Latin
America
is among the best integrated treatments of the subject. A
broad
discussion of the relationship between Colombian politics
and
economics may be found in The Politics of Colombia
by
Richard H. Dix. Richard M. Bird's study,
Intergovernmental
Finance in Colombia, gives complete coverage of the
government's role in the national economy. The Economist
Intelligence Unit's annual Country Profile:
Colombia
provides current summaries and statistical tables on all
aspects of
economic production and trade. The Banco de la República's
statistical department produces ample data on Colombia's
domestic
and foreign economic activities. The Plan de Economía
Social,
Agosto 1987 of the National Planning Department
(Departamento
Nacional de Paleación) is an invaluable source of
supporting data
and current economic policy directions. (For further
information
and complete citations,
see
Bibliography.)
Data as of December 1988
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