July is always a challenging month. Writers take well-deserved holidays, printers slow down the presses a notch (or two) and everyone, it seems, after three long weekends in June, grumble that by September there won’t be any more long weekends…and money!
Truth be told (as always on these pages), I have heard remarks from many sources that the country could be facing a liquidity crunch as we head into the second half of the year. Now, even though my macro economic skills do need some dusting-off, when you can purchase butter from Grenoble at 100 pesos cheaper than butter churned out in Sopó, there does seem to be something wrong with the current state of the Colombian economy.
We can blame commodities, free trade agreements, open skies and everything under the sun to justify why foreign butter is becoming cheaper than locally-produced butter, especially in a country which last year made plenty of noise when marmalade – la mermelada – became a talking point, and highly contentious issue, during the presidential elections.
If Colombia wants to compete it has to look beyond trading blocs, bilateral agreements and boost a corporate culture where people come first. The country is lagging behind other developing nations when it comes a creating a competitive labour force, equipped with language skills and I dare claim, sound customer service skills. How strong can a business be if the middle management can’t communicate in English, don’t respond emails and get caught up in short-term problem solving, rather than embracing a long term vision of initiative?
We all want Colombia to do well. It’s where we live. It’s where many of us run our businesses. It’s a great place to be. But the current state of the economy is worrisome. The peso, which this time last year, was one of the world currencies to watch, has lost much of its lustre. An unfavourable, volatile exchange rate is also crippling, when trying to buy some greenbacks or take a short trip overseas. God forbid, longer ones are no longer feasible.
Then, there’s the real prospect of more changes to current taxation legislation, which raises the taxes across the board, goes after more capital gains and squeezes the noose on small businesses which have very few incentives right now to keep growing and employ more workers. The pressure is on for businesses and households.
If we all have to deal with red ink, Colombia’s business owners pull-off small miracles every day. With no shortage of creative thinking and hard work in this country, people start businesses despite the many odds and all too aware that there’s a growing middle class that wants to spend and has jumped on the fast credit bandwagon. The fact that there’s a middle class out there that wants to travel more, eat better and have access to foreign-made brands is a good for the economy. But what kind of future will the manufacturing sector look forward to, if everything we consume is increasingly not made at home?
The malaise over monetary policy can be solved and Colombians will just stash their money under the mattress for these storm clouds to pass. More worrying – and with good reason – has been the intensification of the internal conflict, and which just several months ago, had many believing that a lasting peace was going to be presented before the Colombian people for ratification before the year’s end. The prospect of a lasting peace seems to be evaporating faster than anyone would have liked and the country has faced an escalation in violence unprecedented in recent years with attacks committed by FARC against their fellow Colombians, essential infrastructure and the environment. And a recent rash of low-intensity bombs across Bogotá has added to the pessimism surrounding our safety in the capital.
The FARC in Havana have to decrease the intensity and frequency of the conflict if they want to salvage the talks and reclaim any credibility they might have had went they first sat down to talk two years ago. We’ve come a long way since Oslo to retrocede so quickly, so fortuitous, and without any credible act by the guerrillas to curb the violence.
I’m no harbinger of bad tidings as we always have so much to celebrate by living here; but let’s hope that there is an about face in our circumstances, some act of goodwill and decency from both sides, so we can get on with the task of living in a country whose strongest selling point may not be the marmalade, but a love of life.
