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COLOMBIA - Country outlook. COLOMBIA The Economist Intelligence Unit Country
outlook COUNTRY VIEW After winning re-election in May ...
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Submitted by ss_spif on February 27, 2007
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COLOMBIA
The Economist Intelligence Unit
Country outlook
COUNTRY VIEW
After winning re-election in May 2006, the president, Alvaro Uribe, will remain in power until 2010. In spite of a strengthened popular mandate and a working majority in Congress, his political capital is diminishing. Reported links between several of Mr Uribe's congressional supporters and the demobilised Autodefensas Unidas de Colombia (AUC) will tarnish the president's reputation and detract from the legislative agenda. Despite some improvements, public security will remain poor, particularly in some rural areas. A negotiated end to the conflict with the Fuerzas Armadas Revolucionarias de Colombia (FARC) is unlikely. The Economist Intelligence Unit expects Mr Uribe to retain a prudent economic policy. GDP growth will slow gradually, but remain solid, averaging 4.5% in 2007-08. The current-account deficit will widen to 2.4% of GDP in 2008, but will be fully financed by strong investment inflows.
Domestic politics: Mr Uribe, who began a second four-year term in August 2006, will face significant challenges in the forecast period. Although he won a comfortable victory in the May 2006 election and holds a congressional majority, his political capital is diminishing in the wake of a Supreme Court investigation into links between some of his supporters and the AUC. Although this is unlikely to trigger an institutional crisis, the investigation will tarnish the president’s reputation and detract attention from the legislative agenda. Governability is likely to deteriorate, as the unity of the president’s congressional alliance is vulnerable and the investigation will exacerbate rifts within the ruling coalition. Conclusive peace negotiations with the largest guerrilla group, the FARC, are unlikely in the forecast period; the ongoing military offensive may further weaken the FARC, but we do not envisage that the group will be defeated militarily....
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