At this moment Colombia, a country that has been ruled by the right and center-right for nearly the last two decades, is near to the date of taking the decision of whether to accept a radical change and introduce a communist ideology or whether to adopt a government from the center. At almost two weeks from the second presidential round, Colombia has a dilemma: who to choose? Who will ensure a sustainable economy? Who will provide prosperity? Who will end corruption, poverty, and inequality?
Gustavo Petro, an economist from a prestigious university who has developed almost all of his career being a politician, where he had the opportunity of being the mayor of the capital district of the nation but who also is a former guerrilla of M-19, a terrorist organization charged of being the responsible for murders, kidnappings, and human rights violations; or choosing Rodolfo Hernández a businessman who is also a former mayor of one of the biggest cities of Colombia. The decision is not easy at all, well, neither Petro nor Rodolfo are from the ruling class who has had the power in the last 30 years, but what is certain is that the chosen one has to have clear economical proposals that ensure prosperity and well-being of the citizens. But which are these proposals?
On one hand, some of the most important and controversial proposals of Petro, are focused on:
- Coal Mining and Oil: He argues that the revenues due to mining of coal and oil have been declining and thus it became an expense rather than a profit, “it’s not a source of revenue for Colombia, it’s an expense.” (The Economist, 2022). In the same way, states that the prices have globally fallen, and this tendency will continue in the future. So, what Petro proposes is to remove subsidies from hydrocarbons, and stop hiring oil and coal exploration.
- Taxes: He will increase taxes for the 4,000 richest people in Colombia, Petro aims at reducing the inequality gap, reducing the deficit, and increasing tax justice. “How can we increase production while also increasing tax justice? By placing the highest tax burden on the wealthiest and least productive parts of society.” (The Economist, 2022), with this reform the candidate would affect the richest people in Colombia and the hydrocarbon business.
- Pension Funds: The candidate has insisted that he will reform the pension system. He proposes a minimum obligatory contribution to the public pension fund to ensure a basic pension for everyone and strengthen competition between private and public pensions. In the same way, he has repeated on different occasions his aspiration to withdraw money from the private pension accounts and move it to the public sector, this would be considered expropriation of goods. This is directed at ensuring that those who are eligible for a pension but do not have access to one can have it, however, the resources used would be from other citizens.
It is important to mention that during his campaign Gustavo Petro has claimed on different occasions that in his government he will implement diverse subsidies to those who are in extreme poverty and poverty, and others that may be included in this plan.
On the other hand, the proposals of Rodolfo Hernández are focused on:
- Taxes: Hernández has affirmed that he would eliminate the taxes on rent for those individuals who earn less than 2 million pesos (500 USD) since it has no sense to take away their money when they are already winning a very low wage. In the same way, proposes that the scale of taxes increases accordingly to the total income.
- Coal Mining and Oil: The candidate is against ending the exploration and hiring of coal mining and oil. Hernández believes that it is an outrage to make such a transition in Colombia and that it would drive to economic stagnation and possibly inflation. However, the candidate, considers that this transition must be made progressively, he proposes a plan from now to 15 years to transform the energy in Colombia.
- Employment: Hernández considers that the way to reduce the rates of unemployment is to stop importing in such quantities and start to export, in this form to reduce the deficit and increase production and profits, which will simultaneously lead to new work opportunities and higher wages. He considers that is essential to stimulate agriculture and give subsidies depending on production ( if a producer produces the good then he can remain with the subsidize otherwise the subsidy has to be returned).
Last but not least, both candidates have been criticized due to different factors. Gustavo Petro has been criticized and his economic policies have been cataloged as unstable and that will drive Colombia to a deficit, hyperinflation, and/or an enormous debt.
Many experts have spoken respect to the end of coal and oil mining, former Colombian mine minister Amylkar Acosta, exposes that ending with oil and coal mining will lead Colombia to a hyper-devaluation of the national currency, hyperinflation, and an increase in the national deficit. In the same way, the implementation of many subsidies will also lead to the national debt overflowing.
Lastly, many citizens have shown their anger with the proposal of the candidate of using the money of their private pension and move it to the public fund, since they argue this is expropriation.
In the same way, Hernández has also been criticized because, many express that he is just a populist with no real intentions of progress, and that his economic policies are not well defined. Also, many hold that he is not clear in essential aspects such as Fracking, and tax reform.
Finally, Hernández has created a speech against corruption, but he has not clearly defined how is he planning to eliminate this cancer that is affecting in a high measure the development of the economy of Colombia.
The winds of socialism and change have been blowing for some time in Latin America. The Colombians now have their turn. On June 19, they will go to the polls, and there the political, economic and social model that the country will adopt in the coming future will be defined.
- The Economist Newspaper. (n.d.). How Gustavo Petro would change Colombia if he wins the presidential election. The Economist. Retrieved June 8, 2022, from https://www.economist.com/the-americas/2022/05/28/how-gustavo-petro-would-change-colombia-if-he-wins-the-presidential-election
- Estas son Las propuestas económicas de gustavo petro. Petro Presidente 2022. (2022, June 7). Retrieved June 8, 2022, from https://gustavopetro.co/programa-de-gobierno/temas/propuestas-economicas/
- Riaño, N. C. (2022, March 15). Las propuestas económicas de rodolfo hernández. El Tiempo. Retrieved June 8, 2022, from https://www.eltiempo.com/economia/sectores/rodolfo-hernandez-propuestas-economicas-del-candidato-presidencial-658298