Colombia Has One Message for Investors, Another for Aid Donors

(Bloomberg) -- Venezuela’s migration crisis isn’t costing Colombia as much as feared, and the government will meet its fiscal targets with room to spare. At the same time it is costing a fortune, and the country needs all the help it can get to cope with the disaster.

Colombia is broadcasting both of these messages simultaneously -- the former to bond investors, the latter to foreign governments and aid agencies.

The finance ministry is downplaying the cost of attending to more than a million Venezuelans who fled to Colombia over the last two years. It says it can keep the budget deficit as low as 2.4% of gross domestic product this year, comfortably below the 2.7% limit set by the nation’s fiscal committee.

“Although the migration flow continues to grow, we’ve been able to absorb it in a sustainable way, and that’s why we’re confident we can achieve this goal of 2.4%,” Public Credit Director Cesar Arias said in a radio interview Friday.

Yet Foreign Affairs Minister Carlos Trujillo painted a much less rosy picture this week, highlighting the “growing fiscal cost” of an 8,800% increase in the number of Venezuelans being treated in emergency wards since 2015, as well as rising debt levels of hospitals in the border region.

“There urgently needs to be a bigger mobilization of international cooperation, because migration continues to increase and therefore the need for resources will be larger,” Trujillo told reporters in Bogota.

Arias and the Foreign Affairs Ministry’s press office didn’t reply to written questions about their contrasting messages.

The wave of migrants produced by Venezuela’s economic collapse is second only to that caused by the Syrian civil war, and Colombia is by far the main destination for them. Despite that, the $228 million Colombia has received from foreign donors falls short of the sums given to deal with comparable crises in Sudan and Myanmar, Trujillo said.

In March, Colombia relaxed its deficit targets through 2022, citing the cost of dealing with the migration crisis. Fitch Ratings said the changes could undermine the credibility of the targets, and on Thursday cut the outlook on the nation’s credit rating to negative, from stable.

Moody’s Investors Service took the opposite view and raised its outlook to stable from negative, in a vote of confidence in the government’s ability to rein in the deficit.

©2019 Bloomberg L.P.