Colombia: Petroleum Industry Reawakens, Union Concerned about Privatization Drive

NotiSur - South American Political and Economic Affairs, August 6, 2004 | Go to article overview

Colombia: Petroleum Industry Reawakens, Union Concerned about Privatization Drive


The Colombian government has announced that it will be selling US$10 billion worth of state assets, in what could be the largest round of privatizations in Latin America since the 1990s. The stakes on the block include shares from the state-owned oil company Empresa Colombiana de Petroleos (Ecopetrol), which has elicited angry responses from unionists who completed a month-long strike against privatization earlier this year. The sale announcement also follows recent government reforms making it easier for foreign oil companies to do business in Colombia. Spokespersons for multinational oil corporations have said that the security conditions for petroleum exploration and extraction have improved greatly under President Alvaro Uribe's aggressive war against rebel groups.

Union rejects stock sale, privatization

Colombia is poised to sell off as much as US$10 billion of stakes in state-owned companies in the next few years, evidently playing catch-up with the privatization trend that swept through Mexico, Argentina, Chile, and other countries in the late 1980s and early 1990s. Alberto Carrasquilla, Colombia's finance minister, told London daily The Financial Times that President Uribe's administration was getting ready to sell assets ranging from electricity distributors to stakes in banks.

Colombia's privatization drive is designed to raise much-needed additional funds for social and infrastructure programs during a period of mandated fiscal austerity. Under an agreement with the International Monetary Fund (IMF), Colombia has promised to limit its fiscal deficit to no more than 2.5% of GDP this year.

"We have a relatively ambitious privatization plan in Colombia, perhaps the most ambitious in Latin America," Carrasquilla said. "Initial valuations exist in most cases, and we're now beginning to look at investment banks to manage the sales."

First to be sold off will be an 8% stake in Isa, a regional power-transmission company. Together with Transelca, another distributor, the sales are expected to net about US$200 million this year.

Stakes worth another US$300 million to US$400 million in companies such as Ecogas, a natural-gas distributor, and two banks, Bancafe and Interbanco, are slated to be sold to private investors in 2005.

The sale of some shares in Ecopetrol, the state-owned oil corporation, is also under consideration, following a recent change to the company's statutes. However, the full privatization of Ecopetrol--which would be the largest sell-off by far--has been ruled out by Uribe.

In April and May, the Union Sindical Obrera (USO) of Ecopetrol workers conducted a 36-day strike, which had its origins in the rejection of privatization of the company, according to USO vice president Hernando Hernandez. Hernandez said the announcement from Carrasquilla "puts the agreements between the USO and Ecopetrol in doubt."

The two sides signed the agreements to end the strike, a strike where 248 workers, including Hernandez, were fired. The USO represents 4,000 of the 7,000 workers at Ecopetrol. Shortly after the story in The Financial Times came out, union leaders sought to meet with officials from Uribe's administration to clear up what the share sales would mean for them.

Human rights and labor organizations regard Colombia as one of the most dangerous places in the world for labor organizers, a country where mass arrests, threats, and murder frequently assail labor movements.

Colombian law circumscribes the government's ability to sell state property. Assets must first be offered to cooperatives and similar organizations, for example. Nonetheless, even though the government expects the process will take at least five years, growing fiscal pressures could lead to added urgency. For one thing, the authorities need to find extra resources to maintain military programs.

Various categories of nondiscretionary spending are also growing rapidly. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Colombia: Petroleum Industry Reawakens, Union Concerned about Privatization Drive
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.