Colombia's economic agenda must expand.

With foreign investors lining up to shake the current Colombian President's hand, and venerable institutions such as Fitch Ratings complementing the country's progress, a balanced view of the situation in Colombia is difficult to find.

Fitch, for its part, released a "Special Report" on Colombia on July 18, 2007. Fitch found a lot to like. "Falling unemployment rates, increasing per capita income and strong credit growth have all contributed to a significant revival in private consumption, resulting in further GDP growth."

The Australian Government's Department of Foreign Affairs and Trade likes what it sees in Colombia, too, as is evident in the following from a June 2007 posting on its website. "Though growth is expected to slow progressively during 2007 and 2008, fiscal consolidation, improved security conditions, low inflation and declining unemployment should foster domestic confidence and maintain household consumption."

Many observers (including Market: Latin America itself) have commented on the improved security situation in Colombia's big cities--where 75 percent of the population lives, according to the Population Reference Bureau--which encourages Colombia's urban consumers to venture out on more shopping trips driving retail sales up to impressive heights.

In no way would anyone want to take anything away from the considerable achievement of improved urban security. After all, as Reuters commented in a July 26, 2007 filing from Bogota, the country was, "long known as little more than the world's kidnapping capital and home to Latin America's longest-running guerrilla war."

Nor is there merit in detracting from Colombia's macroeconomic progress.

But some caveats, specifically relating to the security situation, and the plight of many of the country's consumers, are in order.

In the same story cited above, Reuters comments, "Guerrillas still control wide swathes of countryside and right-wing paramilitaries extort farms and businesses in many areas of Colombia." The news service adds, "This Andean country remains the world's top cocaine producer and thousands are killed in the [guerrilla] war every year." The aforementioned war, by the way, has lasted for 40 years.

Reuters quotes an analyst at a local security think tank as saying, "`The paradox of Colombia is that we have good urban security and good tourism infrastructure while the rural areas are crowded with rebels, paramilitaries and drug smugglers."

Another seasoned observer writing in the Miami Herald on June 7, 2007 says security problems interfere with a workable growth agenda, which must promote, "social needs, poverty reduction in particular, and economic reforms to secure fiscal stability and sustained growth."

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