AMBASSADOR'S OCTOBER 1 CALL ON FINANCE MINISTER

UNCLAS BOGOTA 007239

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON PREL VZ PE CO
SUBJECT: AMBASSADOR'S OCTOBER 1 CALL ON FINANCE MINISTER
ZULUAGA

REF: A) BOGOTA 7088 B) BOGOTA 7019


1. (SBU) Summary. Finance Minister Zuluaga reiterated to the
Ambassador, on October 1, GOC support for Treasury Secretary
Paulson's informal consultative process with like-minded
Latin American finance ministers. He concurred with the
Ambassador's suggestion that our governments pursue an
expanded economic agenda under the Total Economic Engagement
(TEE) process. Zuluaga highlighted growing investor
confidence in Colombia, but cautioned that failure to approve
the Colombia-U.S. Trade Promotion Agreement (CTPA) would
dampen progress and complicate Colombian efforts to fight
narco-terrorism. The Minister urged the USG to remain vocal
in fora sponsored by international financial institutions
(IFIs) and explain that Latin American support for market
driven policies still outweighs support the Chavista economic
model. End Summary.


2. (SBU) Finance Minister Oscar Ivan Zuluaga, a close
political ally of President Uribe, expressed to the
Ambassador on October 1 firm GOC support for the consultative
process with Latin American finance ministers initiated by
Secretary Paulson. Zuluaga regretted that he could not

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attend the July meeting in Montevideo along with his
counterparts from Mexico, Chile and Uruguay, but emphasized
that a previous commitment in Colombia precluded his
participation. He assured the Ambassador that his absence
did not relate to dissatisfaction with the process or the
bilateral relationship. Colombia "remains firm" behind this
process, he continued, and he would welcome a chance to
continue consultations during the upcoming Bank/Fund meetings
in Washington.


3. (SBU) The Ambassador presented the USG vision of an
expanded bilateral agenda that went beyond the CTPA to
include additional financial, trade, commercial and social
elements. He suggested -- as he had during his call on Trade
Minister Plata (Ref B) -- that we form a working group to
flesh out an agenda. Zuluaga concurred, calling the
initiative an important strategic step. The U.S. will
continue as Colombia's principal commercial partner, and
there remain many avenues for expanded economic engagement.
The Minister highlighted the GOC proposal to attract second
home owners to Colombia, medical tourism, expanded insurance
coverage, and expansion of investment fund activities as
themes to put on the table. Zuluaga also made a pitch for
USG assistance to augment infrastructure finance and to
conduct next the Colombian census.


4. (SBU) Ambassador Brownfield congratulated the GOC for the
immensely successful first round of partial privatization of
Ecopetrol (Ref A). Zuluaga underscored the message of
confidence that this represents in the Colombian investment
climate. Building investment confidence remains one of the
central tenets of President Uribe's governance, he continued,
and the results so far have not disappointed. FDI reached $6
billion in 2006, and should exceed $8 billion in 2007. While
the U.S. represents the largest source of FDI (approximately
25%),other countries such as Brazil and Chile increasingly
look to Colombia as a sound place to invest.


5. (SBU) Zuluaga recounted his recent visit to Lima to
appear at an IMF forum. He expressed surprise and concern at
the number of invited parliamentarians from the region who
were aligned with the Chavez economic model. We must not
allow IFIs and other international organizations to foment
this notion as the principal narrative in Latin American
economic circles. He urged vigilance from the USG to
guarantee that international economic and financial meetings
genuinely reflect the dominant thought in the region, i.e.
that the free-market, private-sector driven economic model
offers the best opportunity for job creation and improvements
in social welfare.


Brownfield