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Colombia Government Seeks $4 Billion in Financing for 2003 By:
Dan Molinski
BOGOTA -- The Colombian government is seeking about $4 billion in financing for 2003, Finance Ministry officials said Friday during an investor conference call. "Our calculation is that we need about $4 billion for 2003 in order to honor - as we have always done - the debt and the interest payments on our foreign debts," said Alberto Carrasquilla, Colombia's vice-minister of finance, in an investor conference call. He said that of the total, the government expects about $2.2 billion to come from multilateral organizations. To get the remaining $1.8 billion, Carrasquilla said Colombia would like to "go to the market, and get reasonable interest rates and so forth." But he said that may not be possible due to an unfriendly market as a result of contagion from regional woes. "If we face that fact and are pessimistic on the market opportunities, then we have to make additional multilateral support," Carrasquilla said. He said other options for funding are surpluses generated by state enterprises, such as the oil sector. "To our regret, we would go to that and be able to get the $1.8 billion through that mechanism," he said. Colombia already has most of its $2.2 billion target for international bond sales for this year's financing. Also speaking during the conference call, Finance Minister Roberto Junguito said Colombia seeks to increase its borrowing from the World Bank through a "country assistance" program that will be ready by the end of October. "This will increase disbursement," Junguito said. Colombia is also in discussions with the Inter-American Development Bank and the Andean Development Corporation, CAF, to increase funding from those sources, Junguito said. Colombian officials consider it necessary to increase borrowing from multilaterals as international bond spreads grow amid regional concerns, including worries about Brazil's debt sustainability. Colombian bonds were trading Friday at 938 basis points over U.S. Treasurys on J.P. Morgan's Emerging Markets Bond Index Plus - 14 basis tighter from Thursday. Junguito said details on gross financing needs for 2003 won't be available until after meetings that begin next week with the International Monetary Fund. He said the specific financing proposal also must be given to Congress, and that no figures are certain until that time. -By Dan Molinski, Dow Jones Newswires; 571-602-1203; colombia@dowjones.com Junguito added that the World Bank and IDB loans would be policy-based, linked to planned fiscal and public-sector reforms. These reforms "will be sort of the conditionality behind these loans," he said. The Colombian government plans to submit to Congress in the coming months a tax-reform package that will restructure income-tax and value-added tax regimes. It also plans to submit a bill to reform the state's near-bankrupt pension arrangements. Vice minister Carrasquilla said the bill will be brand new, replacing a bill already submitted by the previous administration. "The first one wasn't strong enough," he said, adding that the new bill will make the pay-as-you-go system sustainable through an increase in contributions and a reduction in benefits.FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Action on Aging distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
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