Workout man.

Concerned over the U.S. Congress' reticence at approving a free trade agreement with Colombia following the recent scandals over alleged links with paramilitary groups, members of the Colombian government lobbied in Washington, D.C. recently. At public and private forums, the ministers of Finance, Foreign Relations and even President Alvaro Uribe underscored the strength of Colombia's economy, its political stability and its strategic importance for the United States. Finance Minister Oscar Zuluaga spoke with LATIN TRADE Washington Correspondent Doralisa Pilarte.

What are Colombia's most important economic challenges?

First, guaranteeing the sustainability of growth at average levels of 5% a year. In second place, continuing to maintain investment levels of 26% of gross domestic product. In third place, continuing the process of fiscal deficit reduction, not only of the central government but of the consolidated public sector. And the fourth [point] in the short term is the recovery of Colombia's investment grade.

How is the Chinese economic phenomenon affecting Colombia?

Our commercial deficit with China has grown in a significant manner in the last two years. In particular, the government has had to take much care with Chinese-origin imports through Panama, and we have had to enforce broader monitoring. The government also has had to take some anti-dumping measures to guarantee there is competition on adequate terms, according to international norms.

How do you see inflation in Colombia in the medium term?

We hope to continue with what we have achieved since 2000, which is the control of the inflation goal that the Bank of the Republic sets each year. Today, inflation has been stabilized at levels of 4.5% a year, which we believe is a very important advance for the country. It's true that international reserves have grown, a product of the Central Bank's intervention in the exchange rate. But the important thing is that the bank's intervention has been done in perfect coordination with the central government and with defined mechanisms to avoid inflationary pressures.

Can Colombia become an open capital market in the short term?

Today Colombia is a very attractive country in terms of investment. Direct foreign investment represents 4 points of GDP and every day there's greater interest in acquiring Colombian assets. Recently there was a record transaction by a Brazilian company that acquired a steel company in Colombia, Paz del Rio, at a price that surpassed all expectations, through bidding by various international groups, which shows the interest of the international community in having assets in Colombian companies.

What are the advantages and challenges of the giant infrastructure project that Colombia has launched?

One of Colombia's biggest bottlenecks is infrastructure. The National Development Plan for 2007-2010 includes investment in infrastructure, separate from topics of gas and petroleum, of about US$20 billion over a period of four years. Of this, a considerable portion is for roads, airports and ports, which are crucial to improving the country's competitiveness in this process of joining the international economy and in the signing of free trade agreements.

Regarding the Free Trade Agreement, how would a slowdown in the U.S. economy affect Colombia?

Colombia has a very important interest in the [free trade agreement] with the United States. Historically, the United States has been the main destination of our exports and the main country from which Colombia imports. Therefore, there is a very close relationship of very many years that has allowed for the consolidation of markets for Colombian companies in the United States and for U.S. companies in Colombia. What the FTA seeks to do is to deepen not only the opportunities for commerce, but the levels of investment in our country.

What is the government's strategy regarding the partial privatization of Ecopetrol?

The government's decision to capitalize Ecopetrol at a 20% level with private resources has as its goal giving Ecopetrol a very important investment capability so that it becomes a much more advanced and efficient enterprise for the challenges implied in the current petroleum situation. Ecopetrol has plans not only to participate in Colombia, but to go into foreign markets in order to develop activities in other countries. It has a very ambitious investment plan. For example, for the year 2007, Ecopetrol is investing close to $2.50 billion and its needs are increasing.