Colombia’s government will assume personnel costs of all micro, small and medium-sided businesses during the height of the coronavirus pandemic to prevent mass layoffs and bankruptcies .
In a television address, President Ivan Duque said that “the State can finance for three months the payroll of the small and medium-sized businesses, especially trying to cover those people earning up to five minimum wages that are on the payroll.”
“The nation assumes that financing, but it assumes it on the condition that we see no job losses in this sector, which is what is so important for the generation of income for the Colombian people,” said Duque.
The announcement received the support from the president’s main critic in congress, Senator Gustavo Petro, who said that “it leaves out the people in the informal economy, but it’s a step forward.”
The president said the government would also assume pension payments for thee months, which would be added to workers’ pay check.
The financial injection means that the government will pay the salaries of, for example, restaurants and shops that were forced to close doors when a quarantine took force on April 25.
The sudden closure of shops and other small and medium-sized businesses saw many forced to fire their personnel as they were unable to pay their salaries,
The president said that “the nation assumes this cost, but on the condition that we see no job losses in this sector, which is what is so important for the generation of income for the Colombian people.”
Whether the emergency measure means that companies will have to hire back freelancers who make up almost half of the labor force and were fired almost immediately after the quarantine is unclear.
What is also uncertain is how much Duque’s proposal; will cost and where the president will get this money from.
Finance Minister Allberto Carrasquilla earlier this week announced he was seeking an $11 billion credit line with the International monetary fund to deal with the crisis.