President Abelardo De La Espriella presented this Friday an economic roadmap focused on restoring the confidence of investors and entrepreneurs, the sanitation of public finances, the reactivation of the energy sector, and the strengthening of the Colombian countryside.
His first announcement was the freezing of public spending, a measure that, he assured, seeks to correct the growth of state spending financed with debt during the previous government. “Before undertaking the great economic transformations that Colombia needs, we have to put the house in order,” he stated.
With that decision, the Government would seek to eliminate a tax that returned to the tax system in 2003 as a temporary measure and that the 2022 tax reform made permanent for individuals with higher wealth.
Justifying the decision, the president assured that the country arrives at this new stage with public finances weakened by the growth of spending and the greater indebtedness of the State.
According to him, that dynamic ended up compromising fiscal sustainability and the confidence of investors and entrepreneurs, which is why he insisted that the priority of his government will be to restore order in public accounts before undertaking new economic reforms. “No economy prospers when the State spends without control,” he stated.
However, he clarified that the austerity policy will not affect programs aimed at the most vulnerable population. “Austerity will not fall on those who most need the protection of the State,” he said, while assuring that the adjustment will be aimed at eliminating waste, abuses, and inefficient use of public resources.
In business matters, De La Espriella sent a message of support to the private sector and assured that his administration will seek to restore confidence to invest in the country. “This government will be your ally. Investing in Colombia will once again be a safe and profitable decision,” he said addressing national and foreign entrepreneurs.
As part of that strategy, he announced a structural reform of the tax system to simplify it, combat evasion, and create a favorable environment for investment, production, and employment. In that package, he also confirmed that he will eliminate the wealth tax considering that “those who invest and generate wealth should not be punished.”
Thus, according to the President’s statement, the structural tax reform will be aimed at simplifying the tax system, reducing evasion, and stimulating private investment. And regarding the elimination of the wealth tax, he was emphatic in stating: “Prosperity does not come from taxing success, but from creating conditions for millions of Colombians to undertake, work, and progress,” he stated.
With that decision, the Government would seek to eliminate a tax that returned to the tax system in 2003 as a temporary measure and that the 2022 tax reform made permanent for individuals with higher wealth.
The president also promised to facilitate the transition of millions of informal workers to formality through greater access to credit and new entrepreneurship opportunities.
Energy security
Another of the most relevant announcements was the commitment to respect the independence of the Bank of the Republic. According to him, his economic team will have the instruction to recover the country’s credibility before international markets so that Colombia is once again seen as “a serious, reliable, and safe State to invest in”.
In energy matters, the president assured that supply security will be considered a matter of national sovereignty. In that context, he announced that he will promote a policy of hydrocarbon exploration and production, promote the development of fracking under technical and environmental standards, and seek to recover the financial solidity of Ecopetrol.
He also stated that his government will strengthen thermal generation, protect reservoirs, and diversify the energy matrix to reduce the country’s vulnerability to droughts and decrease the risk of energy rationing.
Although he reiterated his support for the energy transition, he maintained that it must be carried out “from strength and not from weakness,” first guaranteeing the supply of oil and gas and attracting investment back to the sector.
One of the most repeated messages of the speech was related to the need to recover oil and gas reserves. De La Espriella stated that the country must reverse the decline in those strategic inventories through a policy of hydrocarbon exploration and production, considering that energy security, the arrival of new investments, and economic stability in the coming years depend on it.
The countryside occupied another central chapter of his intervention. De La Espriella assured that peasants have been abandoned for decades and announced a package of measures to strengthen rural production through credit, technical assistance, road infrastructure, connectivity, security, and better marketing conditions.
As part of that strategy, he proposed turning the Orinoquía into a great agro-livestock development hub, assuring that this region “will be our Mato Grosso,” with the capacity to become a global agricultural pantry and strengthen the country’s food sovereignty.
