Colombia’s finance minister, Mauricio Cardenas, has a message for the political leaders of the world’s advanced economies: When it comes to the art of compromise, they should borrow a page from his country’s playbook.
It is perhaps a surprising message from Colombia, which has been plagued by a brutal 50-year-old conflict with the Revolutionary Armed Forces of Colombia, or the FARC, a decades-old leftist insurgency turned drug-trafficking group. The government is currently engaged in peace talks with the FARC.
Speaking to The Wall Street Journal on the sidelines of the World Economic Forum on Wednesday, the former Brookings Institution senior fellow and economist lamented the failure of the U.S. and Europe to come to grips with their fiscal problems. He said weak growth in those regions was hemming in Colombia’s own rather healthy expansion.
He blamed their troubles on a dearth of “political leadership” and an unwillingness to cut deals.
“What we do not understand is why it takes so much longer to do the homework that we were forced to do, fortunately, when we faced a similar crisis in the late 90s,” he said of the fiscal standoff in the U.S. and continued financial strains in Europe.
Like much of South America, Colombia was hit by a currency and banking crisis at the end of the 1990s. The government adopted what Mr. Cardenas calls a “shock therapy” response—taking over and closing banks, letting the peso free float, slashing spending and adopting pensions and tax reforms.
While the International Monetary Fund pushed Colombia and other Latin American countries hard to adopt reforms, Mr. Cardenas says it was domestic political leadership that ultimately steered reforms and recovery.
For all Colombia’s problems—violence is reduced but not gone, the country has high unemployment rates relative to the rest of the region and corruption remains rife—Mr. Cardenas says the country’s political class appears more capable of compromise than its American counterparts.
President Jose Manuel Santos heads a broad coalition government stretching from right to center-left. He has largely continued the liberal economic program of his predecessor.
“I think in a way politicians in countries like Colombia are more pragmatic,” Mr. Cardenas said. “They understand that there is a point where the economy is the priority and they have to put their differences aside and cut deals.”
