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Volume 53 / Social Sciences

ECONOMICS: COLOMBIA


PATRICIA SUCCAR, Assistant Professor of Economics, University of Maryland

COLOMBIA HAS EMBARKED on a new outward-looking trade strategy since 1990: that of abertura económica, or economic openness. There has been a move towards trade liberalization and export promotion, and away from widespread protection and import substitution. This subject has spawned a growing literature, some of which has been reviewed here. There are two notable collections of essays by Bogotá's Chamber of Commerce. The first presents a description of the policies implemented so far and an analysis of the long-term impact of openness, emphasizing the need for government intervention and massive mobilization of resources for the success of the outward-looking trade strategy (item bi 91024064). This point is also made in the second work, which calls for industrial, agricultural, and service sector policies to enable domestic firms to compete effectively in world markets (item bi 91024025). The latter also stresses the need for infrastructure investment and institutional restructuring.

A second topic, agriculture, is not as well represented in the books reviewed. Iragorri Hormaza and Santacruz Caicedo contend that to eradicate widespread poverty and social strife in the Cauca region requires a redistribution of land, and a rural development strategy which gives the peasants access to capital, technology and rural infrastructure (item bi 91003080). They also recommend developing agroindustry and other sources of non-agricultural employment in the rural areas. Sarmiento calls for a reallocation of public and private resources towards the agricultural sector, and advocates modernizing this sector by fostering the creation and dissemination of new technologies and reactivating land reform (item bi 91003081). Machado argues there is an urgent need to create an institution that formulates and executes policies for the agroindustrial sector (item bi 92003101).

A third subject that is discussed in many of the works reviewed is that of a lack of coordination of government policies. The authors of Colombia siglo XXI (item bi 91024025) assert that Colombia lacks a long-term development plan with clearly defined long-term objectives: no one knows where the economy is headed; the economy and politics are managed on a day-to-day basis; and lack of coordination adds to the uncertainty and frustration. Chavarro Miranda argues that the principal faults of monetary policy implemented during the 1947-58 period were lack of continuity, and lack of coordination between the policies of the central bank and those of the government (item bi 91003085). Machado calls for effective coordination of different government agencies in formulating policies that affect the agroindustrial sector (item bi 92003101).

Effective coordination of government policies is essential to the success of the outward-looking strategy that Colombia is currently undertaking. Monetary, fiscal, credit, and exchange rate policies, labor legislation, and infrastructure development have to be coordinated so as to promote export activity and enable domestic producers to compete successfully with imported goods.

It is worth noting that Sarmiento's interesting and thorough book Funcionamiento y control de una economía en desequilibrio (item bi 91003081) presents a detailed analysis of the Colombian economy, followed by policy prescriptions.


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