Under Cárdenas, Colombia has benefited from structural fiscal laws and a regular commitment to this fiscal discipline, which is beefing up the country’s external defences amid weak commodity prices and capital flows.
Oil – which until recently accounted for 55% of all export revenues – generated 20% of Colombian government revenues in 2013 and today accounts for just 7%.
Euromoney says: “Cárdenas is a hugely respected finance minister, and the credibility that he and the Colombian economy have built in the eyes of international investors has enabled the country to pass a serious stress test that has created crises in other Latin American and EM economies.
“Cárdenas’ counter-cyclical fiscal stance has improved the country’s creditworthiness and external buffers as South America adjusts to the prospect of prolonged weakness in commodity prices and tighter US monetary policy.”
Cárdenas’ prudent management of the economy has seen it become one of the fastest growing EM economies in the world in the past three years. GDP growth has moderated due to the challenges facing EMs in 2015, but Colombia is still expected to grow by more than 3% this year while it continues to add jobs.
The Colombian government has been a strong advocate of enacting structural reforms to maintain international capital flows and competitiveness. It is committed to a revamp of its tax code to broaden the revenue base and increase tax receipts as a percentage of GDP from a low 16% today.
Cárdenas has also overseen a splurge in infrastructure investment, including roads and construction projects, to boost productivity and long-term trend growth.
“The performance of Colombian bond yields and its credit default swaps show the resilience of the Colombian economy,” says Euromoney. “On a relative basis, Colombia has outperformed its peers and it is realistically targeting rating-agency upgrades in the years to come rather than fearing for a loss of its recently won investment-grade status.”
|[It recognises] the strength of Colombia’s economy, ingenuity of the Colombian people and of our firm economic institutions|
Mauricio Cárdenas, Colombia’s finance minister
Euromoney, the leading global banking and finance publication, has nominated a Finance Minister of the Year for more than 30 years, coinciding with the World Bank/IMF meetings. The previous three winners of the award were Luis Videgaray of Mexico last year, Tharman Shanmugaratnam of Singapore in 2013, and Cesar Purisima of the Philippines in 2012.
Euromoney’s decision is based on three factors: the opinions of a committee of Euromoney’s senior editors, chaired by the editor; the views of some of the world’s leading bankers, which Euromoney’s editorial team seeks out in background meetings; and the analysis of the contributors to our service Euromoney Country Risk (ECR), which has more than 400 economists around the world contributing on a regular basis, as well as data sourced and compiled by ECR.
Recent data compiled by ECR highlight Colombia’s improved economic ranking. As of July, Colombia improved its sovereign risk ranking by seven places since December 2013 and has substantially increased its risk ranking relative to peers in Euromoney’s proprietary access-to-capital scores.
Minister Cárdenas says: “I’m frankly honoured and humbled by this award. I accept it as a valued recognition of the strength of Colombia’s economy, the ingenuity of the Colombian people and of our firm economic institutions that, under the leadership of president Juan Manuel Santos, have kept us on a disciplined, credible and steady path of economic growth.
“I consider it as a testament to the high confidence in our economy, which is a precious asset that is at the core of our economic strategy.
“I’m honoured to join a great fellowship of men and women from around the world with the vision and courage to steer their nations, in times of either trouble or prosperity, to a better place for their people.”
Cárdenas will receive the award from Euromoney’s group publisher Neil Osborn and editor Clive Horwood at a private reception during the World Bank/IMF meetings in Peru in October.
An in-depth interview with Cárdenas will be published in the October edition of Euromoney.