Contingent liabilities: The Colombian Experience
This report describes, from the conceptual framework for contingent liabilities, the valuation for the fiscal commitments arising from infrastructure projects developed under public-private partnership schemes, public credit transactions secured by the nation and claims against the Nation - to fiscal mitigation mechanism adopted by the Contingencies Fund State Entities.
In Colombia, the management process of contingent liabilities is a fundamental part of the principles of fiscal discipline, facing sustainability of the debt, reduction of fiscal risk and transparency in the administration of public resources. Currently, the country has reached the highest standards of disclosure of information regarding fiscal accountability and transparency and is emerging as a pioneer in the management of contingent liabilities in Latin America. This report is the first publication on the management of contingent liabilities of the Nation, published by the Ministry of Finance and Public Credit, which seeks to disseminate technical and regulatory efforts made by the General Directorate of Public Credit and National Treasury on the subject and present the main figures and their tax implications, constituting a highly relevant tool to monitor the country’s fiscal performance. This report is the result of the valuable work of the team from the Deputy Directorate of Risk, to whom we thank their commitment and consistent effort in the design and implementation of policies intended to improve the management of contingent liabilities in Colombia.
