Colombia’s business leaders and entrepreneurs are increasingly pessimistic over the investment climate six weeks since President Gustavo Petro took office and announced a hefty tax reform that will require approval in Congress.
According to the National Association of Entrepreneurs of Colombia (ANDI), in September, 68.5% of companies described the economic outlook as “uncertain” and 20.5% as “unfavorable.” The majority of the 308 ANDI members who participated in the study claimed the COP$25 billion (US$6 billion) tax reform was their primary source of concern and an obstacle to growth and productivity.
Bruce Mac Master, president of ANDI presented the findings and highlighted that “we have to be aware of the reality, which is that Colombia is not capable of absorbing a tax reform tax that, by far, would be the largest in the country’s history.” Mac Master also indicated that between June and September of this year, the creation of profitable investment projects decreased by 23.8%. “Productive investment is one of the fundamental conditions for ensuring future growth,” he said.
The president of the country’s largest association of business leaders also stated that should the proposed tax reform be approved by lawmakers, the future of millions of jobs is at stake. “To know where we are heading and to inspire confidence in businesses, citizens, and workers—we need to have an open dialogue,” stated Mac Master. Besides the planned tax reform weighing heavily on investor confidence (57.8%) are other government policies (50.2%) that will impact private pensions.
“Trust is the basis for the functioning of the economy, of society, of justice, of business and job creation,” highlighted Mac Master.
The less than optimistic outlook from Colombia’s business sector comes amid growing tensions between cattle ranchers and sugarcane growers as a result of illegal occupations of land by indigenous communities. On Monday, as Gustavo Petro arrived in New York for his first address to the United Nations General Assembly, some 4,000 ranchers began to blockade roads in the Middle Magdalena River valley, an area with a long history of paramilitary activity. The protest sends an ominous – and overt signal – to President Petro that large swathes of the country remain under the control of powerful landowners willing to defend their agro-industrial estates against occupiers.
The caravan blockade also started less than a week before anti-government protests are planned nationwide for September 26. President Petro has not condemned the illegal occupation of lands ahead of an address that will focus on climate change and actions to bring “Total Peace” to Colombia. Petro raised the issue on Sunday during a private meeting with UN Secretary General Antonio Guterres. Petro also reiterated his position that the U.S-led War on Drugs is “obsolete.”
Despite the leftist president’s opposition to U.S interdiction efforts in the illegal drug harvest, and a total ban on aerial fumigation, the U.S State Department donated three Blackhawk helicopters to Colombia’s National Police, and the first delivery of 12 to protect the country’s biodiversity and part of the previous government’s environmental conservation offensive.
“They will be part of the air fleet to protect the environment from deforestation, fires, and illegal logging and we remain committed to supporting the Colombian government to protect the country’s biodiversity,” said the State Department’s Brian Harris. Colombia’s National Police Director, General Henry Sanabria confirmed that the three Blackhawks will serve communities on the Colombian Pacific. The donation was offered during the administration of President Iván Duque and includes 40 all-terrain Army vehicles.
