BOGOTA: Drew Weselak said there was one tool he couldn’t do without when visiting Colombia for the first time this year: a hand-held calculator to translate prices that can quickly climb into six digits for everyday purchases.

With one dollar equivalent to about 2,160 pesos, a 20-minute taxi ride through the capital can cost 12,000 pesos, while a night in a four-star hotel may reach 315,000 pesos. When figures go beyond 1 billion pesos there’s added confusion for people unfamiliar with Spanish: Billions are expressed as thousands of millions and trillions are called “billones.”

“Colombia is a little unusual for all the zeros,” Weselak, a 60-year-old songwriter from Vancouver, said outside the Botero Museum in Bogota this month. “Whenever I look at anything, I’m calculating.”

Authorities have had enough. Finance Minister Mauricio Cardenas said Oct. 30 that he will send a bill to Congress to slash three zeros from the currency, bringing the peso to about 2.2 per dollar. The argument is that the four-digit exchange rate is confusing and creates a negative image for a country that has left behind the financial slippage of the 1980s and ‘90s when the nation was inextricably linked to drug cartels.

The reality is that Colombia’s economy is on the rebound and violence has diminished, with the homicide rate dropping by about a third in the past decade. Gross domestic product will grow 4.9 per cent this year, according to the median estimate of analysts surveyed by Bloomberg, the fastest among major Latin American countries. Inflation is running at 3.29pc, within the central bank’s target of 2pc to 4pc.

David McKenzie, a World Bank researcher who’s studying ways to improve management at auto-parts makers in Colombia, said the “crazy” figures make his job harder.

“As an outsider coming in and trying to talk with these firms, you hear all these numbers getting thrown around,” McKenzie said in a telephone interview from Washington. “The more extraneous zeros that are around, the more chance there is of one of them not getting recorded correctly.” To avoid errors, data collectors take the extra step of writing numbers in words as well as in digits, he said.

A government initiative to rebase the currency failed four years ago on concern that expenses to print new bills, change accounting and switch prices would outweigh the benefits.

Ivan Duque, a member of the Senate’s economic committee, said that he would need to see evidence of economic and fiscal gains before he would support a currency change.

The Finance Ministry, in an e-mailed response to questions, declined to comment on when it plans to introduce the bill or the potential costs and benefits of such a move.

Neighbouring Peru and Brazil replaced their currencies in the mid-1990s following bouts of hyperinflation. In the aftermath of the Soviet Union’s break-up in 1991, Russia cut three zeros from the rouble and Poland stripped four from the zloty. Indonesians need more than 12,000 rupiah to buy a greenback.

Colombia’s peso has weakened 11pc this year amid a drop in the price of oil, which accounts for more than half the country’s exports. The peso has lost about two-thirds of its value since the start of 1994, when Banco de la Republica allowed it to float within a band. It first crossed 1,000 per dollar in November 1995, and has floated freely since 1999.

The highest denomination bill in Colombia is 50,000 pesos, or about $23. Asked in a W Radio interview on Oct. 29 whether Colombia needed a 100,000 peso bill, Cardenas said the question highlighted the need to lop three zeros from the currency. The zeros “send a message that the economy is not so good here,” Danusa Ayache, 43, a Brazilian doctor touring the capital’s main square, said this month. She said the situation reminded her of the early 1990s in Brazil before the real replaced the cruzeiro, which had sunk to about 2,700 per dollar after inflation topped 2,400pc in 1993.

Adolfo Meisel, a central bank co-director, says the exchange rate makes for gigantic numbers that are harder to understand and gives the country a bad image abroad.

“Foreigners see a country with so many zeros that it doesn’t seem like it’s a serious nation. When they talk to you about 450m, it’s a number you can understand. But when they talk about 450bn, you don’t know what that is.”

By arrangement with Bloomberg-The Washington Post

Published in Dawn, November 23rd, 2014