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Europe must take Latin America's medicine - Santos
November 21, 2011 / 2:32 PM / 6 years ago

Europe must take Latin America's medicine - Santos

LONDON (Reuters) - Europe and the United States must now take the same debt-cutting medicine they prescribed for Latin America years ago or risk hurting the world economy, Colombian President Juan Manuel Santos told Reuters in an interview on Monday.

Colombia's President Juan Manuel Santos (L) meets Prime Minister David Cameron at 10 Downing Street in London November 21, 2011. REUTERS/Daniel Deme/POOL

Santos, who is visiting London to boost trade and investment in Latin America’s third most populous country, said his biggest worry was “that the industrialised countries are not capable of taking the correct decisions and showing the world they can get out of their crisis”.

Asked what those decisions were, Santos said: “The same decisions that those same countries told us in Latin America to take a few years ago. Exactly the same ones.”

Speaking as world stock markets fell again on worries about the European and U.S. debt crises, Santos warned leaders in the Old World: “Now the world has changed. Now we are saying ‘Put your house in order because your disorder is affecting us’”.

Latin America, and Colombia in particular, had been relatively well insulated from the euro zone crisis so far because of its robust financial system, low level of debt, high banking asset quality and low inflation, Santos said.

“We are well prepared but you can never be sufficiently immune from situations like this,” he added.

Colombia, which may this year overtake Venezuela as Latin America’s number four economy, is on a recovery path from the 2007-9 global financial crisis.

Santos said his country would grow by more than 5.5 percent this year and would not be hurt this year by contagion from Europe, although a recession in the industrialised world next year would be a different story.

In remarks earlier to an investment summit in London, he said Colombian growth was sustainable because “we are not creating bubbles, we are not overheating the economy”.

Colombia’s central bank “has space to lower rates” in the event of a global recession but this would depend on domestic inflation, he said.

Growth would come from infrastructure, construction, agro-industry, mining, oil and innovation, he added. The country’s trademark coffee industry would grow production as new, younger, more disease-resistant strains of tree came on stream, he said.

Using its status as a member of the CIVETS group -- an acronym coined by the Economist Intelligence Unit for a group of seven fast-growing emerging nations -- Santos is also hoping to tempt European companies looking for expanding markets.

“If I‘m a Spanish businessman and I have idle capacity...for me the most interesting thing would be to go to Colombia, where this capacity is needed, and invest there,” he said.

Improved security forms an important part of the investment pitch Santos is making on his foreign trips.

The armed forces found and killed Alfonso Cano, the leader of the country’s biggest guerrilla force, the Marxist FARC, on November 4 -- the latest in a series of blows to the rebels which once controlled large swathes of the Colombian countryside.

The president said he believed new FARC leader Timoleon Jimenez would not differ greatly from his predecessor and repeated a call he made in August for the rebels to lay down their arms and start negotiating with the government.

It was “not impossible” that Jimenez, who goes by the nom de guerre Timochenko, could follow the example of Bogota’s newly chosen mayor and one day win elected office if he chose to negotiate and settle his numerous legal problems, Santos said.

Residents of the Colombia capital Bogota, a city of eight million, elected Gustavo Petro, a former guerrilla with the now-defunct M-19 movement, as their new mayor last month, choosing to ignore his rebel past.

“If you really want to start negotiating and lay down your arms, look at what happened in the elections, a former guerrilla is mayor of Bogota,” Santos said.

Mindful of the importance of bilateral trade and regional security, Santos has pursued a more conciliatory policy towards neighbouring Venezuela than his predecessor Alvaro Uribe.

Asked about intelligence information which places Timochenko in Venezuela, the Colombian president said he would not hesitate to ask for Caracas’s help if that were the case.

“If I have proof he (Timochenko) is in Venezuela and where he is (located), immediately I will go to President Chavez, who furthermore has made me an offer that if I know where he is, that he will immediately intervene,” Santos said. “There is an agreement and so far he has kept it.”

Although Santos said the FARC had been defeated politically, he was cautious about predicting an end to the military campaign waged by Latin America’s oldest revolutionary force.

“They have been going for 47 years and they have ideal geography with mountains and jungles,” he said. “If they insist on staying as they are, they will get weaker and weaker, more distant, less and less able to strike. They will slowly disappear.”

Created by Michael Stott; editing by Ron Askew

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