The National Federation of Business Merchants (Fenalco) revealed on June 25 the results of a survey carried out among its members on the problems that most affect them currently. The list is headed by the low demand for its products and services, the uncertainty regarding the social reforms promoted by the national government and the insecurity that the country is experiencing.
The president of the union, Jaime Alberto Cabal, pointed out that for merchants the negative effect that reforms such as labor reforms would have became a headache, to the point that Today it occupies an unprecedented second place on the list of concerns, with 19% of the responses.
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“The mistrust and uncertainty of businessmen and consumers continue to increase,” he stressed, highlighting at the same time that the Commercial Confidence Index (ICCO), revealed by Fedesarrollo, also shows a sharp deterioration in merchant confidence in May, compared to the indicator from a year ago and from April of this year. Business uncertainty continues to rise.
According to the Fenalco survey carried out at the beginning of June, the most serious problem for merchants is related to low demand. “Almost no merchant has been able to meet their sales budgets so far this year. “Sales have declined”he highlighted.
He criticized that it is regrettable that in the face of this scenario the Government turns a “deaf ear” and does not react with a reactivation plan that will save the economy this year.
“It is also important to demand that the President of the Republic, as head of the Military Forces, order and lead forceful and effective actions against insurgent groups, terrorists and organized crime; that every day they gain more ground in the face of the perplexity and fear of urban and rural Colombia,” said the union leader.
The labor reform project presented by the Government of Gustavo Petro, which was already approved in the first debate in the Seventh Commission of the House of Representatives, has been the subject of harsh criticism from various sectors. It will modify the working hours (for example, the night shift will be from 7:00 pm to 6:00 am and not, as currently, from 9:00 pm to 6:00 am), therefore, According to studies, it will generate cost overruns for companies and will cause the loss of 450,000 formal jobs.
The decision caused the president of Fenalco, Jaime Cabal, to describe the initiative as “disastrous.” and accused the legislators of acting hastily and without considering the current economic situation of the country.
The leader highlighted that the text of the reform would significantly increase costs for the business sector, with measures such as an increase in the payment of overtime, Sunday and holiday shifts, in addition to changes in the length of the daytime shift and in the holidays for the surveillance sector. “Unfortunately, in this debate, the articles proposed by the Government were approved that would significantly increase costs for the business sector”he claimed.
According to Fenalco, adopting these measures without a rigorous analysis of the economic situation will lead Colombia to an “economic catastrophe”. The federation illustrated that converting the apprenticeship contract into a labor contract, as stipulated in the first debate, will imply a minimum additional cost of $5.2 billion for the productive sector.
Added to this is the exponential increase in apprentices due to agreement number ten of the Sena. “Meanwhile, the Government intensifies its regressive policies, high taxes, state interventionism and aggressive language against the private sector,” Cabal added.
The union leader emphasized his concern because the legislators who approved the reform seem to be disconnected from reality. “This is a decision by a group of congressmen who turn their backs on reality and who, apparently, only care about their particular interests,” he said.
In addition, he mentioned that those articles that were voted negatively represent an achievement for those who believe that the only way to generate quality jobs and reduce informality is to boost economic growth. For example, Proposals that sought to further regulate the labor market to the detriment of competitiveness were rejected.
Fenalco warns that, if these points are not reconsidered, the impact on the economy will be severe, affecting both companies and the 2.7 million Colombians who are currently unemployed. The federation criticizes what it perceives as a simplistic approach to solving complex labor market problems, without taking into account the wider implications.
