Colombia’s government apparently abandons basic economics

President Ivan Duque (Screenshot: Twitter)

Colombia’s President Ivan Duque appears to have given up on trying to recover from the worst economic crash in recorded history.

Duque couldn’t stop talking about economic recovery in the aftermath of the crash that followed a virtual shutdown of the economy in April last year.

Actually, recovering economic activity is a lot more complicated, however, this would require the execution of an actual strategy, which may be a bridge too far for Colombia’s president.

Economic think tanks have been making one proposal after another to overcome the crisis, but can’t seem to get through to the government that apparently fails to comprehend the most basic of economic theory.

Think tanks Fedesarollo and ANIF on Wednesday reiterated the need for public policies that stimulate domestic consumption while the export sector recovers.

Fedesarollo stressed for the umpteenth time that an increase in spending on the poor would not just diminish widespread hunger and insecurity, but create jobs in the food industry and raise tax revenue.

ANIF stressed the importance of creating jobs for people under 28 who are historically suffering high unemployment rates.

According to statistics agency DANE, youth unemployment in the first quarter of the year was 23.9% compared to 21.6% in the last three months of 2020.

General unemployment continued to go up as it has since Duque took office and ended at 15.6% in May.

DANE’s monthly statistics seem to indicate that unemployment has only accelerated during the president’s economic reactivation.

Monthly unemployment rate

This could be because Duque has ignored economists and continues to push the same “Orange Economy” plans that failed to create jobs before the coronavirus pandemic.

While Colombia’s youth was massively protesting against the president’s economic policy, Duque met up with a few dozen students to introduce his “Colombia Youth Pact.”

On Thursday, the president specified that this pact meant a one-time $42 million investment in technical education that would prepare young people for the “Fourth Revolution” and his “Orange Economy”.

La Republica

Duque couldn’t be more detached from the economist of Fedesarollo and ANIF who urged for an annual investment of more than $600 million in order to finance an emergency employment plan.

This plan would immediately put money in the pockets of young people, and increase both consumption and productivity while reducing poverty, according to the economists, who weren’t particularly concerned about video games.

Deputy Vice-Minister Jesus Bejarano wasn’t too enthusiastic about the economists’  plan and urged not to “only dedicate ourselves to reducing monetary and extreme poverty while neglecting the fiscal part”.

Speaking of which, Bejarano had barely finished his sentence about Fitch downgrading Colombia’s long-term foreign-currency rating to “junk,” but added that it also revised its outlook from negative to stable.

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