Petro and Minhacienda plan would have errors

Petro and Minhacienda plan would have errors
Petro and Minhacienda plan would have errors

This week, the National Government released some details of the economic recovery plan with which it hopes to confront the slowdown and the debate immediately broke out among experts, since there are two points that, although They have been mentioned for a long time, every time they come to light they generate controversy.

The first is the possibility of changing the fiscal rule, in order to “make it more flexible” and, for example, gain a little more space on issues such as debt management. Likewise, in second place are forced investments, with which, According to President Gustavo Petro, efforts will be made to reactivate sustainable sectors of the economy.


Ministry of Finance and Public Credit

Photo: CEET – Néstor Gómez

“I promised that we were going to present the measures to the Congress of the Republic to reactivate the economy that will consist, once and for all, of bills that generate forced investment in the Colombian private financial system for loans to small businesses.” , medium and large agriculture and tourism industries in Colombia to reactivate the country,” said the head of state when he announced this idea.

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Now, what needs to be made clear is that these changes are part of a list of five changes, of which one is already in Congress and is the bill to increase the debt quota, which arrived at the Legislature with an urgent message from the Ministry of Finance. The other has to do with a tax stimulus plan, which will also be focused on sustainable sectors and housing.


Gustavo Petro

EFE

“We had already been making progress on issues such as the need to reduce the nominal corporate income tax rate, the need to incorporate stimuli for renewable energies, as well as to promote tourism, such as sustainable and ecological tourism, and then create stimuli for for people to arrive and other related aspects such as various aspects of services,” indicated the Minister of Finance.

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Alerts for possible errors

As soon as these ideas became known, several analysts pointed out that perhaps the wrong route is being taken, since the Government is reviewing how it increases spending and is not focusing on things such as, for example, investment stimuli, creating new sources of income or tightening the belt to free up resources.


Juan Camilo Restrepo

Rodrigo Sepúlveda / EL TIEMPO

One of these experts was the former Minister of Finance, Juan Camilo Restrepo, whose proposed measures are based on the “wrong assumption that it is with more public spending, more taxes and more nationalization of the economy, that it is possible to reactivate it.”

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The flexibility of the fiscal rule and the major inForced versions go in that direction: more public debt, more state interference in the allocation of economic resources, more nationalization in short. Let’s add to that a new tax reform that is also announced,” he indicated.


José Manuel Restrepo, rector of the EIA University

Sergio Acero Yate / Portfolio

Restrepo Salazar added that “economic reactivation will occur – not when the disorderly and erratic Government intervenes more – but when the private sector once again acquires dynamism and desire to invest; conditions you are losing. The Colombian economy is 80% private and 20% public; It is utopian to expect 20% to do what 80% are not managing to do.”

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Meanwhile, for another former Minister of Finance, who is today the rector of the EIA University, José Manuel Restrepo, the branches of public power (legislative and judicial) cannot allow ideas such as “making the fiscal rule more flexible” to come to fruition, since They are bad in a recovery plan and can harm the country.


Economic slowdown

iStock

You cannot try to activate the economy through waste and only from public investment (which is not even being executed well). The way is to motivate private investment with confidence and certainty,” he said in this regard.

Government will go to Congress to make the fiscal rule more flexible

Restrepo Abondano closed by saying that “this proposal, on the contrary, generates more uncertainty, a bad message to foreign investment and in general to investors and risk rating agencies, increases country risk and with it the cost of financing (therefore less space for public investment) and discourages growth”.


wallet

IStock

It should be noted that all of these ideas raised by the Ministry of Finance will mostly be presented to Congress, which is why their implementation will not occur soon and as long as this is not a reality, The slowdown will continue to advance and affect other sectors of the economy.

 
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