U.S. Treasury Secretary Jacob Lew is on a multi-country trip to visit officials in Latin America’s four largest economies and will meet with Colombian President Juan Manuel Santos tomorrow during his stop in Colombia. On a visit that takes place just two days after the nation’s historic peace accord signing, the two will discuss policies to work together to promote economic growth and stability as Colombia tries to diversify and expand its economy in a post-conflict reality.
In Bogotá, where Lew will also sit down with Colombian Finance Minister Mauricio Cárdenas and Central Bank head José Darío Uribe, the secretary’s mission is to consult with Colombian officials on their plans to maintain strength in public finances. According to a senior official in the U.S. Treasury Department, the United States views Colombia as a well-managed, emerging-market economy with strong institutions and flexible economic policies. But it also recognizes that adjusting to the severe revenue losses it has faced since oil prices plunged two years ago is not easy.
The Treasury official also noted that Colombia is a regional leader in implementing public/private partnerships. It has attracted financing from a variety of sources across the globe, for example, for its ongoing — and massive — “Fourth Generation” road and highway infrastructure program. Lew has been encouraged by such efforts, and plans to talk to Santos, Cárdenas, and Darío Uribe on other ways to help navigate the low-growth times ahead in a world of low commodity prices.
Lew’s Place in Active Colombia and U.S. Relations
Treasury Secretary Jacob Lew’s visit to the capital marks another step in a particularly active stretch of high-level engagement between Colombia and senior U.S. officials. During President Santos’ trip to address the United Nations earlier this month, he met with President Barack Obama in New York. The two reportedly discussed the transition of the long-time “Plan Colombia” U.S. program, which has focused on fighting drug trafficking and improving security, into what now will be known as “Peace Colombia.”
That same week, U.S. Secretary of State John Kerry announced the nation’s pledge of an additional $36 million USD in post-conflict funding, specifically for landmine removal. Then Kerry later traveled to Cartagena to witness the official signing of the agreement with FARC this week on September 26.
Lew has served as treasury secretary under President Obama since 2013. He took over for Timothy Geithner after spending a year as the White House chief of staff and before that running the Office of Management and Budget for the Obama administration.
Secretary Lew Goes to Latin America
In all, Lew will make stops in Argentina, Brazil, Colombia, and Mexico during his Latin American tour. Together, with more than $7 trillion USD, these four nations combined to account for 75% of the region’s GDP in 2015, according to the International Monetary Fund.
Lew’s meetings in Brazil focused on discussions about how the United States can help new President Michel Temer steer the embattled nation towards economic normalcy. He stressed the need for the legislature in Brasilia to pass “difficult but necessary economic reforms” to get beyond the deepest recession in more than a century in South America’s largest nation.
Lew said that, “the Temer administration is taking ambitious steps to regain Brazil’s economic footing and restore confidence to consumers and investors alike.” He added that “the government’s proposed structural reforms, if passed by congress, will help the Brazilian economy realize its enormous growth potential.”
His trip to Argentina was the first official visit by a treasury secretary to the country since 2002. The administration of President Mauricio Macri has represented a change in tenor for the country’s desire to participate in the global economy, with the previous government’s continual talk of “hedge fund vultures” being replaced by ongoing praise for market-friendly reforms and pro-business sentiments.
Lew’s comments reflected the change in Buenos Aires that took place last December when Macri won the presidential election. “In its early months, the Macri administration has made a lot of progress,” said Lew. “We recognize that policies to prepare the Argentine economy for more balanced and sustainable economic growth may be difficult. Rebuilding institutions, reestablishing credibility, improving governance, and implementing structural reforms will not happen overnight. It is important for the government to stay the course.”
After leaving Bogotá, Lew will continue on to Mexico City to meet with President Enrique Peña Nieto, among other officials, before returning to Washington.
Photo: U.S. Department of Treasury