Strategic Risk Management for Developing Countries: The Colombia Case Study

Uncertainty makes economic and project management more difficult for any entity. This is especially true for sovereigns that have experienced substantial financial volatility and shocks throughout the nineties, especially those with substantial debt and commodity price exposures. Furthermore, the development of a strategic approach at the country level for the analysis of that uncertainty has lagged behind as most approaches exclude, for example, trade flows and fiscal dimensions. A World Bank research project undertook to rectify that situation. In this paper, we present a case study for Colombia of the tools developed in that research project. We only look at one small aspect of the issues in order to illustrate how these tools could be applied and what might be examined.