Around 400 presentations by 55 experts will be held during the Lacea Lames meeting. A picture of the Lacea Lames opening ceremony.
To be sustainable, the macroeconomic soundness that allowed Colombia to weather the crisis of the European and US markets, which started in 2008, as well as China's economic downturn in 2015, requires an accurate planning of public policies whose result is the recovery of the potential growth.
With such thesis, presented by Mauricio Cárdenas Santamaría, Minister of Finance and Public Credit of Colombia, the annual meeting of the Latin American and Caribbean Economic Association (Lacea) and the Latin American Meeting of the Econometric Society (Lames) kicked off on Thursday November 10th at the EAFIT’s Fundadores Auditorium with around 850 people who attended the opening ceremony. The Colombian Central Bank also contributes to the meeting’s preparation.
Luis Pérez Gutiérrez, Governor of Antioquia; José Darío Uribe Escobar, General Manager at the Colombian Central Bank; Juan Luis Mejía Arango, President of EAFIT; Juan Felipe Mejía Mejía, Dean of the School of Economics and Finance of EAFIT; Eddie Dekel, Director of the Department of Economics of Northwestern University; and Eduardo Lora, President of Lacea, were also present at the opening ceremony.
Minister Cárdenas stated that “the fact that the principle of fiscal sustainability was included in the Constitution allows for any decision by the government branches to be questioned by appealing to this principle. Moreover, there is the fiscal rule, whose influence allowed increasing the Colombian rating to BBB, and it meant having access to financing in more favorable conditions for the government, the companies and the families. It also enabled us to adjust to the economic shock through burden-sharing amongst expenses, income and debt.”
Regarding the monetary component of the Colombian economic policy, the minister indicated that the fact that an inflation targeting model was adopted reduced the impact of the fall in oil prices, with the adjustment of the exchange rate without the negative consequences of past devaluations. In addition, Cárdenas highlighted the relevant nature of one of the most influential factors in the recent inflation increase: El Niño phenomenon.
However, he noted with satisfaction "that the country's economy is on track to be again within the inflation target range next year. The Colombian Central Bank states that, by the end of 2016, inflation will be slightly below 6%. Evidence of our macroeconomic policy strength is the fact that, after the election of Donald Trump as new president of the United States, the Colombian market remains completely stable."
As for the factors that have enabled fostering the country's economic development, Eduardo Lora, president of Lacea, emphasized the work of the different social and economic sectors of Antioquia's capital city.
In the words of this executive, "Medellín enjoys a wide collaboration spirit among businesspeople, citizens and public entities. For that reason, it has been modernized faster than other cities of the country." According to him, this helped the city and EAFIT to be the hosts of the Lacea Lames meeting for the second time—after the one held in 2010—, bringing together, since today until next Saturday November 12th, around 900 experts in economic, econometric and market matters who will attend more than 400 presentations about the academic and research developments presented by students, professors and public and private entities.
The Norwegian Finn Kydland and the American Edmund Phelps, Nobel Prize laureates in Economics in 2004 and 2006, respectively, are at the top of the list of speakers of the meeting, as well as Ricardo Hausmann, director of Harvard's Center for International Development; Esther Duflo, professor of the Massachusetts Institute of Technology; Andrew Chesher, professor of the University College London, and other 55 experts from well-known institutions such as Stanford, Yale, Northwestern, London College and the MIT.Lectures and discussions revolve around international economics, education and healthcare economics, poverty and inequality, impact assessment, economic growth, added value generation, export product diversification, economic complexity increase, among others—all of them of vital significance for Colombia and the Latin American economies.In fact, with regard to the performance of the regional markets compared to the national one, José Darío Uribe, General Manager at the Colombian Central Bank, highlighted that an increase of 1.7% of the gross domestic product (GDP) in 2009 placed the country in a favorable position.Uribe pointed out that "both the economic policy framework and other external factors generated a good performance, which led to fiscal sustainability, solvency of the financial system, as well as achieving the inflation goal. Nowadays , although the good level was interrupted in the second semester of 2014, due especially to the fall in oil prices—which accounted for almost 20% of the government income in 2013—, Colombia is still an appealing market to international investors."According to this expert, the reason for that is that the Colombian Central Bank considered convenient to look for a gradual convergence of inflation towards the range between 2% and 4% by the end of 2017. Therefore, in September, 2015 a cycle of interest rate increases started from a level of 4.5% to 7.75% reached on July, 2016.From his point of view, "this tightening of the monetary policy contributed to the moderation of expenses and declined the internal demand, which constituted an important factor to begin correcting the deficit in checking account of the balance of payments. Results are tangible because last October inflation was 6.4%."Nevertheless, for Minister Cárdenas, what has been achieved so far is just the beginning of a series of adjustments to public policies, whose main pillars are a tax reform that decreases direct taxes on companies and increases them on natural persons; productive development policies that strengthen sectors related to those already in production; and a investment strategy that is in motion with 30 projects whose most visible result is the reduction by 5% of the transportation time of land cargo."If we stand idly by, the country will only have a fiscal income of 13.5% of the GDP in 2022. We cannot expect to be a developed country with that level. However, the three pillars mentioned above to increase the GDP must be included within a peace environment," said the minister of Finance and Public Credit.
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