Fiscal risk assessment of contingent liabilities associated with natural disasters: The Colombian experience

Abstract

The report titled Contingent Liabilities: The Colombian Experience, is the first publication on the management of contingent liabilities in Colombia. Published by the Ministry of Finance and Public Credit (MHCP), the report highlights technical and normative efforts and policy reforms on the management of contingent liabilities implemented by the Colombian Government. Policy reforms disclosed in the report pertain to the management of contingent liabilities borne by the Government from four different sources, namely public credit operations, contractual public-private partnerships on infrastructure development, legal actions against the Colombian Government, and contingencies resulting from natural disasters. Importantly, although natural disasters are the second most important source of contingent liabilities faced by the Colombian Government, most formal policy reforms have been directed to the institutionalization of managing the first three sources of contingencies, while legal reforms for the explicit accounting of natural disasters is an ongoing effort in Colombia.