April 28, 2011 / 4:19 PM / 9 years ago

Colombia passes four-year $317 bln development plan

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* Focus on boosting health and education spending

* Govt aims to expand mining, coal and oil sectors

* Plan aims to cut 13 pct jobless rate to single digits

By Nelson Bocanegra

BOGOTA, April 28 (Reuters) - Colombia’s Congress passed a $317 billion development plan for the next four years late on Wednesday to boost health care and education spending, while expanding the booming mining, coal and oil industries.

Investment is pouring into Colombia, especially in oil and mining, as a U.S.-backed crackdown on rebels has helped control violence and made it more attractive to foreign companies. Colombia regained its coveted investment-grade credit rating from Standard & Poor’s in March and is expecting Fitch or Moody’s to follow suit soon. [ID:nN16178932]

President Juan Manuel Santos, who took office last August, sees growth rates above 5 percent during his four-year term. His National Development Plan — passed by both houses of Congress — aims to tackle nagging problems like unemployment and lagging infrastructure.

Colombia grew 4.3 percent last year.

The plan sees foreign direct investment rising to $13.2 million by 2014. The government is hoping exports will get a boost if Colombia can pass a free trade agreement with the United States. [ID:nN1178661]

The increasing flow of money into the economy, however, has led to a rising peso COP=RR, which has strengthened 7 percent this year, hurting exporters who have to pay higher costs at home.

Funded 60 percent by public money and 40 percent by private investment, the development plan promises to reduce the jobless rate to single digits from 13 percent, one of the highest in the region.

“We are going to promote the development of the agricultural sector ... by investing in science, technology and innovation,” National Development Director Hernando Jose Gomez told reporters after the plan’s late-night passage.

Colombia, which is the world’s fifth-largest exporter of coal, sees output rising over the next four years to 124 million tonnes a year from 73 million now, due to rising demand from Asia.

Oil output is expected to rise to 1.4 million barrels per day in the country, which is Latin America’s No. 4 oil producer, according to the plan.

But the head of the national infrastructure chamber said this week that deficiencies in rail and port facilities will slow the energy sector’s growth as construction efforts are still stalled from previous governments’ development plans. ($1=1,784.11 pesos) (Reporting by Nelson Bocanegra; Writing by Mica Rosenberg; Editing by Daniel Wallis and Jan Paschal)

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