Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 08BOGOTA1708, COLOMBIA TIGHTENS CAPITAL CONTROLS -- MORE HARM

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08BOGOTA1708.
Reference ID Created Released Classification Origin
08BOGOTA1708 2008-05-09 16:10 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bogota
VZCZCXYZ0000
RR RUEHWEB

DE RUEHBO #1708/01 1301610
ZNR UUUUU ZZH
R 091610Z MAY 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 2687
INFO RUEHLP/AMEMBASSY LA PAZ MAY LIMA 6189
RUEHQT/AMEMBASSY QUITO 6841
RUEHZP/AMEMBASSY PANAMA 1659
RUEHCV/AMEMBASSY CARACAS 0386
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS BOGOTA 001708 
 
SENSITIVE 
SIPDIS 
 
WHA/EPSC FOR PMAIER; EEB/IFD/OMA FOR ASIROTIC; TREASURY FOR 
MEWENS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON ETRD PGOV CO
SUBJECT: COLOMBIA TIGHTENS CAPITAL CONTROLS -- MORE HARM 
THAN GOOD? 
 
REF: BOGOTA 609 
 
1. (SBU) SUMMARY: One year after Colombia's Central Bank 
implemented controls on inflows of foreign capital in an 
attempt to stem the appreciation of the Colombian peso, the 
U.S. dollar has fallen a further 16 percent and reached a 
nine-year low against the peso due to external and domestic 
pressures.  The appreciation has strained the competitiveness 
of Colombia's export industries, spurred job losses in the 
textile and agricultural sectors, and undercut the buying 
power of Colombian families dependent on remittances. 
Despite their failure to date, the GOC has taken steps to 
tighten the capital controls and announced debt swaps to 
staunch an even greater rise in the peso.  Local economic 
analysts are increasingly concerned short-term GOC remedies 
could cause more economic damage than the peso's 
appreciation.  END SUMMARY 
 
Fighting Windmills 
------------------ 
 
2. (U) Since January 2007, the Colombian peso has appreciated 
almost 21 percent against the U.S. dollar and 7 percent 
against the Euro.  Analysts agree that a series of factors, 
many external, have driven the peso higher including the 
global slide of the U.S. dollar and record prices for key 
export commodities such as oil, coal, and nickel. 
Internally, a historic inflow of Foreign Direct Investment in 
2007 (USD 9 billion), continuing GOC fiscal deficits and the 
increasing gap (7 percent) between interest rates in Colombia 
and the U.S. have exacerbated the peso's appreciation. 
 
3. (SBU) Under pressure from Colombia's export industries to 
protect price competitiveness, the GOC announced a set of 
capital controls in May 2007 that require foreign currency 
investments to deposit 40 percent of their investment's value 
with the Central Bank for six months or face stiff withdrawal 
penalties.  A year later, GOC officials acknowledge the 
controls have failed to prevent the peso's rise, but argue 
that without the controls the appreciation would have been 
worse.  The GOC insists not only on the need to maintain the 
controls, but in late April announced measures to tighten 
them further.  The new restrictions apply the existing 
deposit requirement to any credits Colombian firms receive 
overseas and to firms that finance imports for more than six 
months. 
 
Economic Headache #1 
-------------------- 
 
4. (SBU) Finance Minister Zuluaga has publicly referred to 
the peso's appreciation as Colombia's "biggest economic 
headache".  Despite 7.5 percent GDP growth in 2007 and a 
falling overall unemployment rate, the peso's rise has 
reduced the volume of Colombian exports and led to job cuts 
in export-related industries including textiles, footwear, 
and agricultural products.  Colombian Textile Association 
President Ivan Amaya estimates the industry could shed as 
many as 8,000 jobs in 2008 due to a loss in price 
competitiveness for its exports.  According to Colombia's 
economic statistics agency, DANE, imports of finished apparel 
grew 80 percent in 2007 while imports of fabric to produce 
textiles in Colombia for re-export grew only 6 percent. 
Overall, textile exports to the U.S. fell 26 percent and 
footwear fell 54 percent. 
 
5. (SBU) The peso's appreciation has had a similarly 
pronounced effect on agricultural exports. Agriculture 
Minister Arias has stated that for every 100 pesos of 
appreciation against the U.S. dollar, Colombian agricultural 
exporters lose USD 175 million.  According to him the flower, 
coffee, banana, and sugar sectors are the most vulnerable. 
The Colombian Banana Growers' Association (Augura) told us 
the banana sector has lost over 1,000 jobs this year due to 
the peso's appreciation and 17 percent drop in exports to the 
U.S. in 2007.  Meanwhile, the Colombian Sugar Association 
(Asocana) announced May 8 that the sugar industry experienced 
a 44 percent drop in profits in 2007, mostly due to the 
peso's appreciation.  Despite record world coffee prices and 
increasing productivity, Colombian coffee growers estimate 
the sector lost over USD 200 million last year due to the 
strength of the peso. 
 
 
6. (U) The appreciation has also hurt the value of 
remittances from overseas, impacting millions of poor 
Colombians that depend money sent home by Colombian 
expatriates.  According to Colombia's 2005 census 3.3 million 
Colombians live overseas, with 1.2 million of those 
expatriates in the U.S.  In 2007 remittances totaled an 
estimated USD 4.4 billion, or approximately 3.7 percent of 
Colombian GDP (reftel).  According to press reports, the drop 
in the local buying power of remittances has led to drop in 
sales and business activity in rural areas that receive the 
bulk of the funds. 
 
Treatment Worse than the Disease? 
--------------------------------- 
7. (SBU) Notwithstanding the pressure on exporters and 
remittance beneficiaries, most investors and local economic 
analysts agree that the GOC's capital controls have caused 
more damage than good.  They assert that the controls limit 
the number of participants in the local stock market and 
thereby distort share prices downward.  Brokerage firm 
Corredores Asociados concluded that without the capital 
controls instituted in 2007 the value of shares traded on the 
Colombian Stock Exchange (BVC) would now total USD 27 billion 
more than their current valuation. 
 
8. (SBU) The controls have also limited the amount of foreign 
investment in Colombian public debt, maintaining interest 
rates artificially high and raising the cost of issuing debt 
on the domestic market.  Corredores Asociados analyst Ricardo 
Duran insists that easing conditions on foreign capital would 
lower interest rate and borrowing costs for exporters, 
offsetting any further appreciation of the peso following 
removal of the capital controls.  Mauricio Cardenas, Director 
of Colombia's prominent economic think-tank Fedesarrollo, 
told us that it is obvious the controls are not working, but 
said the measures were politically difficult to lift given 
that the number of exporters, workers and consumers impacted 
by the peso's appreciation. 
 
Time for a New Approach 
----------------------- 
 
9. (SBU) Recognizing the political pressure to restrain the 
peso's rise and the capital controls' lackluster results, the 
GOC has begun seeking a new approach.  On May 6 Finance 
Minister Zuluaga announced the GOC would convert USD 2 
billion in outstanding foreign-currency denominated debt to 
peso-denominated debt through a series of currency swaps and 
hedge operations with local banks.  The plan intends to 
increase demand for dollars as local banks buy dollars on 
behalf of the GOC to pay international creditors and thereby 
cool the appreciation of the peso.  Over the longer term, the 
operation will decrease the currency risk exposure on 
Colombia's overall debt stock.  Minister Zuluaga indicated 
that once the initial installment of USD 2 billion was 
complete, the GOC would consider expanding the effort to 
cover all USD 20 billion of its foreign currency-denominated 
debt.  He also encouraged private sector debtors to explore 
similar steps to shift their debt from dollars to pesos. 
 
10. (SBU) Analysts have had mixed reactions to the 
announcement with some suggesting the move could help 
facilitate Colombia gaining investment grade status for its 
debt and others expressing concern that the swaps will lock 
in the peso's value at a high rate.  Echoing a recent article 
in newsweekly Cambio written by former Finance Minister Jose 
Antonio Ocampo, Cardenas told us that Colombia could more 
effectively address the structural issues pushing the peso 
higher by actually pre-paying its public debt and reducing 
government spending, instead of simply switching the 
denomination of the debt. 
BROWNFIELD