Three weeks of protests worsen Colombia’s pandemic-fueled economic crisis

Bogota, May 20 (EFE).- Three weeks of protests in Colombia have aggravated the economic crisis in the country caused by the impact of the coronavirus pandemic and led to an increase in commodity prices due to road blockades and the paralysis of some sectors.

There is a scarcity of products such as eggs and tomatoes in supermarkets in large cities, and even when they are available, prices can be five or up to 10 times higher than normal due to supply problems.

The worst hit is the Valle del Cauca department, which, in addition to having Colombia’s main port in the Pacific Ocean, has been the epicenter of the protests and where the violence has been at its worst.

In the port of Buenaventura, which processes more than 50 percent of the country’s imports and exports, there were clashes between protesters and police on Wednesday, the fourth nationwide strike, which rioters took advantage of to cause damage to eight tunnels of a road leading to the city.

However, spokespersons of the National Strike Committee said they will continue to “convene large mobilizations and peaceful actions, until the government stops the violence” which, according to nonprofit Temblores, has claimed the lives of 43 people.

Meanwhile, the president of the National Business Association of Colombia, Bruce Mac Master, expressed concern about the effects of the demonstrations “on the recovery that (had) barely started” after more than a year of the pandemic.

“It is important to maintain levels of activity that generate employment and production. This must be everyone’s objective right now. We make an appeal for a return to full-fledged activities as soon as possible in order to achieve these goals,” Mac Master said.

The construction sector, one of the drivers of the Colombian economy, warned on Thursday that thousands of jobs are at risk due to road blockades, which prevent the transport of goods.

“Road blockades and closures already directly affect 472,138 construction workers who have not been able to do their jobs or reach their workplaces,” the president of the Colombian Chamber of Construction, Sandra Forero, said.

The collapse of a tax reform proposed by the government, which would have increased taxes on the middle class, led the credit rating agency Standard & Poor’s to lower its long-term foreign currency sovereign credit rating on Colombia to ‘BB+’ from ‘BBB’ with a stable outlook, therefore causing the country to lose the investment grade rating it has had for more than a decade.

The loss of the rating is a major blow to Colombian President Iván Duque’s government, characterized by its attachment to economic orthodoxy and which will now find it more difficult to secure external financing to keep the economy in order and fund social programs.

Under pressure due to the protests, which, while losing steam in recent days seem far from over, Duque has had to replace his finance minister Alberto Carrasquilla, who was singled out as the villain of this crisis for being the architect of the failed tax reform.

He was replaced by Minister of Commerce, Industry and Tourism, José Manuel Restrepo, who was tasked with spearheading a new tax reform which economic analysts say the country needs but which must be the outcome of political and social consensus and not of government imposition.

Restrepo, however, is optimistic and believes that even though the loss of the investment grade rating may raise the interest that the country pays on its debt issues, “Colombia will continue to obtain funding as demonstrated in the recent placements we have had in the country and overseas.” EFE

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