Colombia’s President Ivan Duque issued a second state of emergency on Wednesday and announced subsidies for small businesses to continue paying wages during an ongoing shutdown.
The second state of emergency since March 17 seeks to help small and medium-sized businesses pay wages, and prevent mass layoffs and bankruptcies.
The decree also gave small and medium-sized businesses until the end of the year to pay their taxes.
Specifically, the government will pay the companies $90 (COP350,000), which is 40% of the country’s minimum wage, to help them continue paying their personnel’s salaries.
The companies can claim the subsidies for a period of three months beginning next week on the condition they don’t fire any of their employees, said Finance Minister Alberto Carrasquilla.
We don’t have enough money to finance all of it, but we have a very significant percentage of the payroll for the next three months. We have this at hand. To make disbursements, and to implement the decision, it would be necessary to do this through an auditor or accountant of the companies.
Finance Minister Alberto Carrasquilla
Small and medium-sized business association ACOPI celebrated the decision to grant subsidies instead of credit that the business association said was not a viable option for many of the companies.
We are grateful for the response to the proposals presented by ACOPI, and we applaud this new measure to preserve national employment.
ACOPI president Rosmery Quintero
Colombia’s businesses demand subsidies, not loans to prevent mass layoffs and bankruptcies
The rescue plan for the small and medium-sized businesses would cost approximately $1.5 billion (COP 6 billion).
While a major relief for the business community and workers, the government is unable to prevent major job losses, especially among those informally employed.
According to economic think tank Fedesarollo, the lockdown that was put in place to prevent a rapid spread of the coronavirus on March 25 has already cost at least 1.4 million Colombians their jobs.