The crisis in Europe is a worldwide concern, and this week Mauricio Vargas, in his column in El Tiempo, wonders whether Colombia can survive the crisis or not. He points out that Barack Obama knows that if Europe succumbs to the crisis, then many banks in the US will do so as well, and in that scenario Obama will lose the upcoming presidential elections.
Moreover, China and India, who were once the motor for emerging countries such as Colombia, have stopped their growth. China’s economy will grow only by 7.5% this year compared to the 10% in previous years. Latin America will grow 3.5% this year in the best case scenario. Vargas states that so far Colombia is fine, but there are symptoms that point to a slowing down of the economy: the prices of exports such as coffee, petroleum and coal are going down, while industry and commerce are still growing but only slowly.
The government of Juan Manuel Santos must be careful with expenses, but it also has to accelerate public investment which generates employment. There is a new Minister of Transport, and apparently he is a good one according to Vargas. It is yet to be seen if he can prop up the public investment enough for Columbia to survive the world crisis. If that doesn’t happen, Santos will worry for his re-election, which will depend on the economy, as is the case for Obama’s re-election. (link to article)