COLOMBIA IN THE EYE OF THE STORM

When one thinks of Colombia many things come to mind such as Pablo Escobar, the FARC guerrillas, the coca leaf or even Colombian coffee. But this time Colombia resonates in the world due to another factor, the outbreak of protests that started in April due to the government’s announcement of the tax reform. The government announced the Tax Reform due to the fiscal deficit caused by the pandemic, which led to an outbreak of protests mainly in Cali and Bogota, in which students, merchants, professionals, peasants and indigenous people protested. This protest marked an important milestone in the history of Colombia due to the massive gathering of the population and the strength of the protests, not evidenced before, but compared to those of the Bogotazo (1948), the civic strike of 1977 and the signing of the 1991 Constitution. These events raise the question: What happened in Colombia to generate such discontent among the population?

RETROSPECTION OF THE FACTS

• April 27, the Sustainable Solidarity Law or Tax Reform Law is announced.
• April 28, protests begin in Cali and Bogota and spread throughout Colombia.
• April 28, police and army deployed and curfew decreed.
• April 30, Colombian President Iván Duque announces that the reform will no longer include a sales tax on food or utilities or an extension of the income tax.
• May 02, President Ivan Duque requests congress to withdraw the tax reform bill due to continuing protests.
• May 03, Finance Minister Alberto Carrasquilla resigns from his position.
• May 03, José Manuel Restrepo is appointed as new Finance Minister.
• May 13, Colombian Foreign Minister Claudia Blum presents her resignation.
• May 14, protests continue throughout the country.

WHAT CAUSED THE OUTBREAK OF PROTESTS?

The government of President Duque submitted to Congress the tax reform that sought to collect 23.4 trillion pesos, equivalent to 2 percent of the GDP. The law proposed to tax the basic products of the family basket and public services, in which it was proposed to levy Value Added Tax (VAT) on public services (water, electricity and gas), funeral services, electronic items such as computers, and other items that until now were exempted. In addition, the law proposed to levy an income tax on individuals with salaries close to the national minimum wage. In brief, this tax reform law sought to increase tax revenues, prevent the Colombian debt from generating the loss of more points in international risk ratings, institutionalize basic income and create a fund for environmental conservation (Pardo, 2021).

President Duque in an interview with a local media indicated that “For Colombia it is urgent to maintain the protection of the most vulnerable and stabilize public finances. Failure to do so at this time could create a time bomb that could affect investment confidence in the country and affect the entire nation.” In this context, President Duque announced the Sustainable Solidarity Law or Tax Reform Law, which was the main trigger for the protest. Many economists and critics expressed that the reform was too ambitious and inopportune. The response of the tax reform to increase fiscal spending was not the most appropriate due to the characteristics of the current crisis, which is far from the common ones already experienced.

END OF THE STORM?

After President Duque announced the annulment of the Tax Reform Law, the protests in the Colombian streets continued. Among the protesters’ refrains, it was identified that the national strike continues due to the fact that they still have demands that the government has not realized in favor of the Colombian population. Among their demands are: a more egalitarian country; access to health and education; police reform, including the dismantling of the Mobile Anti-Riot Squad (ESMAD); and a better implementation of the peace process. These are the demands of the Colombian population to appease the protests. In this regard, the Colombian government should encourage dialogue with the Colombian population because, if they do not sit down to dialogue, these protests could spread to other Latin American countries. Many of these countries are facing the same explosive combination of an unrelenting pandemic, the growing difficulties of the population to cope with the current crisis and the falling public revenues (Turkewitz and Villamil, 2021).

WHAT REALLY HAPPENED IN COLOMBIA

Part of the social discontent in the country is due to the government’s lack of reaction to solve the country’s economic situation and the worsening of this situation due to the pandemic. The Colombian economy experienced a 6.8 percent drop in GDP, an increase in unemployment, which reached to 4.1 million unemployed Colombians. All this added to the closure of more than 500,000 businesses in the last year. Furthermore, according to data from Colombia’s own National Statistics Office (DANE), it is known that 2.3 million households only eat two meals a day and that 19 percent of families do not have savings to cope with this situation. Although the national government has spent about 4.1 percent of its GDP on the pandemic, analysts have pointed out that this has not been enough to avoid social discontent regarding the management of the crisis (Pardo, 2021).

Similarly, another phenomenon that caused the outbreak of protests is the discontent of the population, which is still in force since the 2019 National Strike, about the political class. The Colombian population feels a great distrust towards the political class and even more so since the announcement of the plan to purchase 24 new fighter planes. In this regard, Colombian authorities came to the fore as the indigenous senator Feliciano Valencia who indicates that “Duque will buy 24 fighter planes for 4 billion dollars in the middle of the worst economic and social crisis in history.” The senator Jorge Enrique Robledo considers that this purchase is a “waste”. The vice-president of the Senate, Sandra Ramírez, wonders from whose pocket the money to buy the airplanes will come, “from the pocket of the poor, to whom the VAT increase will now be applied” (SEMANA, 2021).

There is a generalized discontent amongst the population that may lead to the election of a leftist candidate for the 2022 presidential elections, who breaks with the typical characteristics of the candidates of the last 50 years. For decades, the country has elected conservative leaders. But Gustavo Petro, a leftist former Bogota mayor and former member of a demobilized guerrilla group, is now leading in the polls. In this sense, the government’s response to the recent protests could be an important factor in next year’s vote (Turkewitz and Villamil, 2021).

 

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