Colombia-Venezuela Trade Fight `A Blessing' for Santos' 6% Growth Goal

[Zorro]

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Colombia’s trade spat with Venezuela is “a blessing in disguise” that may help President-elect Juan Manuel Santos achieve his goal of quickening economic growth to 6 percent a year, said David Duarte, an analyst at research company 4Cast Inc.

Colombia’s economy expanded faster than expected in the first quarter, the statistics agency said today. Gross domestic product grew 4.4 percent from a year earlier, beating a 3.6 percent median estimate of 24 economists surveyed by Bloomberg.

Santos, who said he wants to mend ties with President Hugo Chavez after being elected by a landslide on June 20, has pledged to reach the 6 percent annual growth target within two years of taking office in August. He plans to do so while creating 2.4 million jobs and expanding the housing, infrastructure and oil and mining industries.

“The trade break was a blessing in disguise,” said Duarte in a phone interview from New York. “Colombia’s growth is now much more organic and domestically based.”

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More at: http://www.bloomberg.com/news/2010-06-24/colombia-venezuela-trade-fight-a-blessing-for-santos-6-growth-goal.html

[Braulio]

1. Will Colombia cut gas exports to Venezuela?

With the Colombian economy growing so much, will they need to use their gas internally? This means they may cut off gas exports to Venezuela, which in spite of having very large gas reserves, is a net gas importer. Apparently PDVSA doesn't have the internal cash flow nor the technical ability to produce its gas reserves, and has to purchase gas developed in Colombia by private companies in partnership with Ecopetrol.