Abstract
As mentioned in our previous report, the security situation in Colombia has
improved with the decline in
fortunes of the Fuerzas Armadas
Revolucionarias de Colombia (FARC). Political impetus for a continued
decline in FARC power comes from President Álvaro Uribe who is close to
achieving his goal of seeking
a third term in office next year. The Senate
has passed a bill that paves the way for a referendum on his
being allowed
to stand.
Colombia has been a major importer of weapons systems for
several years, with an arsenal that has in
recent years been greatly
strengthened by American military and financial aid, the latter funding
the
purchase of several fixed-wing aircraft and armed helicopters,
including F-4 Phantoms, and Bell UH-1H
and Sikorsky UH-60 Black Hawk
helicopters. These helicopters have been armed with FLIR (Forward-
Looking
Infra-Red) sensors as well as GAU-19 7.62mm mini-guns and 7.62mm M-60 machine
guns.
On the economic front, headline inflation has continued to fall. It
declined 5.72% year-on-year in March,
for the sixth month in a row. We
continue to expect that slower domestic economic activity and relatively
subdued global commodity prices will bring CPI down to our end-2009 target of
3.5%.
Other economic data has become progressively worse, to the extent
that even the finance ministry is now
considering a downgrade to its
growth estimate. We continue to be sceptical as to the ability of the
government’s fiscal coffers to accommodate a hefty expansion in public
expenditure this year,
particularly when revenue from oil exports and tax
receipts looks likely to suffer from subdued global oil
prices and rising
unemployment levels.
There is little chance of an improvement in the short
term and we believe that any risks to our real GDP
forecast of negative
1.5% lie to the downside.
This quarter we have introduced a significant
new aspect to BMI’s Defence reports: the City Terrorism
Rating
(CTR). This assesses the risk of a terrorist attack. The CTR takes into
account the overall BMI
Terrorism Rating for the country in question. It
also incorporates the ‘prevalence’ of terrorism, which
recognises the frequency of attacks and whether the city is a target for
terrorists. The CTR also recognises
the ‘threat’ of terrorism
in terms of the likely numbers of victims and the ability of groups to
launch
sustained campaigns.
In Colombia we assess the CTRs for Bogota
which at 32.5, having been dragged down by domestic
issues, is one of the
region’s lowest scores. These city-specific Ratings are created via an
integration of
the state-wide threat, with an evaluation of the
city-specific characteristics and level of activity.
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