(2 of 2)
A rich nation too poor to pay its bills has suffered many economic pangs as a result. The World Bank is holding back on a railroad loan. The TVA-like Cauca Valley project, which will need foreign funds, is marking time. Foreign investors are wary. The growth of industrialization has been held back just when it is most needed to prevent the debt backlog from rising (by local manufacture of goods now imported, for example). And the nonproductive military imports of jet planes, guns and destroyers are no help. Said a fed-up Colombian businessman: "The only thing you can make with a warship is an admiral."
The Choices. Finally facing up to the crisis last month, Rojas Pinilla accepted the resignation of the Finance Minister who had presided over the mess. Finding a successor proved embarrassingly hard, but a fortnight ago Rojas appointed an energetic, unorthodox banker named Luis Morales, 38, who in six years has built Colombia's'Banco Popular from a competitor of pawnshops to a powerful bank.
Morales' options are tightly limited. He can probably expect no healing U.S. loans to consolidate and ease the commercial debt. Plugging up the loopholes in the import controls would help, and Morales' first act was to announce an austerity that would, he said, pointedly, "cover all fields, including the military." He followed up by calling a temporary halt to import licensing. But many Colombian economists think that in the end he will have to make imports more expensive by a forthright devaluation of the peso.