Content area
Full text
Colombia has long been seen as an example of steady, if not broadly liberalized, economic development.Yet the government of President Ernesto Samper Pizano has been plagued by both accusations of bribery and continued terrorism, slowing the progress of the country over the past year.
In January 1996, a jailed former campaign manager and defense minister Fernando Botero accused President Samper of complicity in receiving campaign contributions from drug traffickers, and the US government has pressured him to resign. The business community attributes part of the 1996 economic slowdown to uncertainty resulting from the political crisis and strained US-Colombia relations. Still, 1996 was the first year of implementation of the Samper administration's National Economic Development Plan, for which a controversial tax reform bill provided an estimated $3 billion by increasing the value-added tax from 14% to 16%. Revenues derived from this increase are to be used for increased spending on infrastructure projects and in the areas of health, education, science, technology, and the environment over the next three years. While growth slowed in 1996, inflation was also under 20% for the first time in 15 years. One sign that international investors have not been dissuaded from the value...