Colombia - Public finance



Much of Colombia's foreign debt has been accumulated by financing infrastructural rather than industrial projects, the latter being more common among Latin American nations during the 1970s and 1980s. Considerable sums were spent in the 1990s to stimulate the development of industry, and higher than normal military expenditures were necessitated by the continuing and disruptive guerrilla activity. The inflationary conditions that prevailed from 1961 into 2000 also stimulated government expenditures. For political reasons, the national government was unable to raise tax revenues sufficient to cover sharply expanding investment outlays. Loans from external financial agencies (including the IMF, IDB, and IBRD) were substantial, but insufficient to permit a buildup in the level of public investment operations. The recession of the early 1980s brought another round of deficits as spending increased far more rapidly than revenues. By the 1990s, reforms in the public sector had greatly improved the efficiency of public expenditures.

The US Central Intelligence Agency (CIA) estimates that in 2001 Colombia's central government took in revenues of approximately $24 billion and had expenditures of $25.6 billion. Overall, the government registered a deficit of approximately $1.6 billion. External debt totaled $39 billion.

The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.

Colombia

REVENUE AND GRANTS 100.0% 24,000
Tax revenue 85.6% 20,555
Non-tax revenue 14.4% 3,445
EXPENDITURES 100.0% 25,318
General public services 6.0% 1,527
Defense 13.3% 3,402
Public order and safety 6.1% 1,563
Education 20.3% 5,193
Health 9.3% 2,381
Social security 12.1% 3,097
Housing and community amenities 6.6% 1,702
Recreation, cultural, and religious affairs 0.8% 213
Economic affairs and services 6.8% 1,732
Other expenditures
Interest payments 17.6% 4,509

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