Colombia Presidency Contender Zuluaga Mulls Ecopetrol Stake Sale

Colombian presidential candidate Oscar Ivan Zuluaga will study the sale of another stake in state-controlled oil company Ecopetrol SA (ECOPETL) to close a “gigantic deficit” in the country’s roads and ports.

The Andean nation can grow at 6 percent per year by upgrading its transport infrastructure and investing in education, Zuluaga said today in an interview in his Bogota apartment. As finance minister in 2007, Zuluaga oversaw the sale of a 6.6 trillion peso ($3.5 billion) initial stake in the oil giant.

“This is something we’ll discuss depending on the fiscal outlook and the size of the investments,” Zuluaga said. “This will always be an option as long as the proceeds are invested in infrastructure that improves the nation’s productivity and competitiveness.”

Colombia should keep a majority stake in the company, Latin America’s third-biggest by market capitalization, Zuluaga said. The government owns 88.5 percent of Ecopetrol.

Zuluaga, 54, will run in presidential elections next May as the candidate of the Democratic Center, a movement founded by supporters of former President Alvaro Uribe critical of the security policies of President Juan Manuel Santos. Santos hasn’t announced whether he will seek a second four-year term.

Squandering Gains

Zuluaga accuses Santos of squandering security gains made during Uribe’s 2002-2010 presidency, and demands an end to peace talks in Havana with Marxist rebels from the Revolutionary Armed Forces of Colombia, or FARC. He also advocates a firmer line with the Venezuelan government of President Nicolas Maduro.

“We need to have a clear relationship based on the principle that Venezuela can’t support FARC terrorism,” Zuluaga said. “There has to be political will to confront terrorism and drug trafficking, which are the two big enemies of democracy.”

Santos’s press office declined to comment.

Uribe, who supported Santos’s candidacy in 2010, now attacks him continually via his Twitter site and in interviews. The government has been talking to FARC negotiators in Havana since November last year, seeking an end to the country’s 50-year conflict.

The guerrillas continue to control territory and mount attacks on army patrols and oil pipelines, even after the army tracked down and killed the group’s top two commanders. Santos rejected the FARC’s offer of a ceasefire during the talks, to prevent them from regrouping.

Public Finance

Zuluaga, an economist who studied public finance at the University of Exeter in England, said he doesn’t have major disagreements with Colombia’s current monetary, fiscal and exchange rate policies, and that his economic reforms would mainly be at a microeconomic level.

The government should encourage more competition among banks to bring down the “very high” spreads charged on consumer credit, and increase the number of Colombians with access to financial services, Zuluaga said.

The average interest rate on consumer loans was 17.6 percent in September, while the central bank’s policy rate was 3.25 percent, the lowest in the region.

Zuluaga, a former senator from Caldas province in Colombia’s coffee region, also served as president of Acesco SA, a steel company.

Santos’s approval ratings fell to a record in August after students and truck drivers joined farmers in nationwide protests amid discontent with the economy. Thirty-six percent of Colombians have a favorable image of Santos, compared with 66 percent who have a favorable image of Uribe, according to a Polimetrica poll taken this month.

The central bank last week raised its forecast for 2013 economic growth to 3.5 percent to 4.5 percent, up from a previous range of 3 percent to 4.5 percent. The economy grew 4.2 percent in the second quarter from a year earlier, faster than forecast by all 31 analysts surveyed by Bloomberg.

To contact the reporters on this story: Matthew Bristow in Bogota at mbristow5@bloomberg.net; Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editor responsible for this story: Philip Sanders at psanders@bloomberg.net

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