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In addition to preserving fiscal sustainability and combating rising inflation, Colombia’s new president will face key challenges related to inequality, unemployment, pensions, and mining and energy development. France 24 reviews the proposals of the candidates who will go to the second presidential round.
Whoever wins the presidency of Colombia will have a difficult road in terms of fiscal reforms that the country so badly needs.
Colombians will vote for the second presidential round on June 19 amid great inequality aggravated by price hikes, despite an incipient post-pandemic economic recovery.
The left-wing candidate, Gustavo Petro, who won the most votes in the first round, has the backing of many poor and working-class Colombians but is viewed with suspicion by investors.
Plans by the former Bogotá mayor to halt the development of new oil projects and redistribute pension funds would put economic stability at risk, some believe. For others, they are necessary reforms to deal with climate change.
Pension reform, yes or yes
The National Association of Financial Institutions (ANIF) says that only 22% of the Colombian population of retirement age receives this income. That is why it has been one of the central topics of debate among the applicants.
Among Gustavo Petro’s main proposals is a reform of tax legislation that would tax the wealthiest Colombians to finance social programs, as well as monthly payments of half the minimum wage – about $125 – to elderly people who do not have pensions.
His opponent is the independent candidate Rodolfo Hernández, a businessman who enjoyed a late rise in the polls that ultimately managed to stay in second place, has shared few details about his economic plans, beyond that he will promote a reduction of the Value Tax Added (VAT) from 19% to 10%.
In Colombia, one in two are informal jobs
Although the unemployment figure had been in single digits for a long time and has been recovering after the pandemic, the reactivation is still lagging behind economic growth and its biggest problem is informality.
Gustavo Petro proposes, among other things, to rethink free trade agreements to create new jobs, according to ANIF, and that the State offer employment to those who cannot find it in the private sector.
Hernández proposes tax exemptions for the creation of digital enterprises and strengthen the Ministry of Labor so that it identifies which are the most active labor sectors to protect them.
Mining and energy development faces two different paths
Known for his anti-corruption promises and flamboyant social media presence, engineer Rodolfo Hernández is generally seen as favorable to business, including the energy miner Gustavo Petro wants to turn 180 degrees on.
In addition to receiving a country with a fiscal deficit of 15,000 million dollars, equivalent to 6.2% of the Gross Domestic Product, the next president will also take office with a Congress divided between a dozen parties, so it will not be easy to carry carry out the series of reforms it needs to lift more than half of Colombians out of poverty.
With Reuters and AP
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