Weekly Report - 16 March 2004

COLOMBIA | Borrowing at home rather than abroad. The government has decided to cut US$500m from its planned borrowing on the international bond market, and increase its domestic borrowing by the same amount. This means that its bond placements abroad this year will only amount to US$700m instead of the originally announced US$1.2bn. The decision is in line with the government's announcement last week that it would be taking action to counter the appreciation of the peso (WR-04-10), and its earlier decision to cancel plans to reduce the external debt by dipping into the country's international reserves. The executive has been urging the central bank to take action also on this front, and on interest rates.

VENEZUELA | Investment trickles in faster. Siex, Venezuela's superintendency of foreign investment, tried to put some spin last week on the latest figures for foreign direct investment (FDI) by underlining that in February it was 213.7% higher than a year earlier. The absolute figures actually show the parlous state of the economy as a magnet for FDI: the inflow in February this year was a mere US$102m; last year, a barely noticeable US$32m. Of course, in February 2003 the country was just beginning to pull out of the devastating two-month strike-lockout staged by the opposition in a bid to unseat President Hugo Chávez .

BOLIVIA | Economic growth to accelerate. Bolivia's economy will grow this year by about 3.6%, a full percentage point more than last year, according to the central bank. The bank bases its calculations largely on the estimated increase in Bolivia's exports of natural gas to Argentina and Brazil, and on the assumption that exports to Brazil, its main market, will grow by 3.3% this year. Worth noting: last year Bolivia's economic growth rate fell just short of population growth; if the bank's forecast if fulfilled, this year it will be about 0.8 points ahead — which starkly illustrates just how much Bolivia must achieve if it is to pull the bulk of its population out of poverty.