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The situation is very serious. The diagnosis is from Andi’s president, Bruce Mac Master. And it does so because of the dire situation of the national industry, and because of the high unemployment suffered by the Nation. And the healing? In his opinion, you cannot raise wages above 2% if you want to reactivate the economy and create jobs.
Regarding this readjustment proposal, “they send an egg”, according to the prominent businessman Christian Daes, president of Tecnoglass, a leading Colombian company in the manufacture of architectural glass and aluminum products for the global construction industry, said in a trill.
For Mac Master, with that phrase, “opposing what is responsible is always popular.” He tacitly considers the phrase a joke when “the situation is very serious.” “The current state of the country is unique: we have the highest unemployment in many years and the greatest destruction of jobs due to the pandemic. There is no doubt that today Colombia must prioritize job creation on its agenda ”.
And for that, what should be done?
First, we must have a salary that creates the conditions for entrepreneurs to generate more jobs; Companies have done very badly this year, there are a large number of affected entrepreneurs and a large number of entrepreneurs who did not even survive the pandemic. Second, a wrong increase would likely cause higher unemployment. Unpopular to say, but true. We must be responsible. Inflation at the end of November was 1.49%, and productivity had a negative record this year of –0.6%. We have to be very careful, this is probably the occasion in which the salary increase is the most important in the last 50 years in Colombia, we cannot be wrong.
The workers have asked for a 14% readjustment, and defend the thesis that this increase encourages consumption and reactivates the economy …
There are times when the greatest driver of the economy is the highest demand, but that only works when there are high levels of employment. In fact, for the last few years we have defined salary increases that are well above inflation.
Shouldn’t exactly the same thing happen this year; even more so with the serious social situation faced by millions of Colombians?
When there are households that have no income, the national priority is to give them the opportunity to have a job. The priority is the unemployed Colombians. Those of us who have jobs must understand it. I have no doubt that the most socially responsible and most socially supportive position is to create the conditions to generate more work.
Agree. So isn’t the 2% adjustment proposal irrational?
Quite the opposite. It is a figure resulting from a very serious analysis, which combines taking into account registered inflation, lost productivity, unemployment, informality and solidarity.
Won’t things get better next year?
Projections by most economists indicate that only at the end of 2022 will we regain the size of the economy that we had in 2019.
And when will that full recovery be?
Analysts say it could be between 2025 and 2027. The situation is extremely serious. We have to make every effort to reactivate, recover the dynamics of the economy. There is no way to create jobs without dynamic economic activity. We want to convene a great national crusade for the generation of employment, one in which, with the correct conditions, we can propose to all entrepreneurs that they make a special effort to generate more jobs in an accelerated way, replace lost jobs, advance investments and make down payment plans for the next few years. That’s the big challenge.
A national crusade with a 2% readjustment?
Yes sir; a crusade for employment. The task of all must be to work together in seeking an economic activity that leads to recovering employment, increasing the product and even increasing the collection for the State.
How is the economy reactivated?
Accelerating investment plans, creating conditions for it, competing with the offers that other countries are making for foreign investment, and without a doubt, the State itself must generate public spending and investment that supports the revitalization.
What does Andi project about our economy for the coming year?
We will have an economy that will decrease around 8%, I confirm that figure. Hopefully it’s less; However, the individual analysis of the different sectors shows us a rather negative behavior, from which we hope to exit soon.
Do you think the tax reform inevitable?
The time to carry out a tax reform should ideally be the first half of next year. The last semester, during which Congress will not be in electoral mode, this will allow for a responsible discussion.
With the generalization of VAT?
The discussion about VAT has changed. The State has shown that it is possible to return VAT to the most economically vulnerable people; today it is being done. That removes many of the regressive concerns. It will be essential to guarantee the sustainability of the State, while maintaining the objective of economic reactivation, and more investment to achieve greater employment. For this reason, it is necessary to analyze in detail what are the spaces that exist today to be able to collect higher taxes. People who should contribute and don’t is one of them.
What about VAT?
A good part of the discussion will be around VAT, we had proposed to significantly lower the rate for this tax, generating at the same time the possibility of charging it to more products and eliminating exclusions. This may be a solution, it has been used in other countries and, above all, today it is more applicable since Colombia has created the refund mechanism.
But do you keep the proposal to lower VAT and extend it, for example, to the entire family basket in force?
Not for the lower strata, but for the rest, there is no justification that a group of the population that can contribute does not pay VAT for so many products. The return allows to differentiate between who can and who cannot.
And the wealth tax? Reactivate it?
The wealth tax is a highly anti-technical tax in corporate terms, not only because companies are neither rich nor poor, but because new investments end up being inconveniently taxed. Different discussion is that of the personal wealth tax. This is a chapter that, next to personal income, will be present throughout the discussion next year. It is important to guarantee that the collection of the same is done in an equitable way.
The Government is in arrears to present the labor reform project. What could be included in it to generate employment?
Colombia is overdue to think about its labor system; A country in which unemployment before the pandemic was almost 11% and informality was more than 50% is a country that obviously has structural problems in its labor regulations. The time has come for us to give the debate to answer: what should we do so that Colombia can reduce its unemployment and additionally achieve having all its workers in formal conditions? There is an Employment Mission led by Santiago Levy to which we have the opportunity to attend representatives of the employers. It would be very sad if we did not do anything, that somehow that has been the custom.
And what to do to avoid that eventual failure?
Raise an open and well-intentioned discussion on the part of all, seeking the general benefit and free from populist temptations.
Should the hourly payment system be created in the country?
Hourly employment is a modality that is increasingly used in the world and increasingly in line with new labor needs for multiple reasons. For example, a good part of the employment is given by harvesting crops, attending commercial seasons such as Christmas, or in areas such as tourism, one of the potential of our country.
What is really important is that this work by hours or days is a formal job, which allows both the worker and the employer to pay benefits, which allows them to accumulate for a pension or have a severance system. Labor flexibility, far from being a precariousness, is the creation of opportunities for many citizens who today are working in informality and who have the same right as the rest of Colombians.
Is your answer yes? Should formal employment be created for hours or days?
Yes, Yamid; There are ways to do it well, we must study and implement them so that the result is good for workers and the economy.
What to do with labor informality in the field?
The figures for informality in the countryside are close to 84%, that is, almost no one is in a condition of formality. We should ask ourselves: why doesn’t the field have a formal system? Why aren’t steps taken to get it? Perhaps the flexibility of the contract in the field and the definition of a differential minimum wage would allow to overcome this great distortion.
And the pension issue?
It’s a time bomb; It is clear that with the current structure we will not be able to meet the obligations that we will have in the future. We have to make the decision whether to modify the savings regime to guarantee that all the people who have worked and saved receive their pension, or if, on the contrary, we are going to leave this problem only to the State.
Increase, for example, the retirement age and the weeks of contributions?
This is a controversial alternative from the social point of view, but one that would allow balancing the accounts to achieve that pension of which I spoke. Probably the way is to imagine a very long transition regime, so that, for example, the new people who are entering to quote today know what the rules of the game are and understand that eventually, for various reasons, among others the increases in the life and work expectations of people, it makes sense to think of new calculation formulas.
Therefore, increasing the retirement age… Are you worried about giving the answer?
I already told you, yes, with a transitional regime that is applied for those who enter the workforce.
Workers insist on creating a basic income. Do you think it is possible?
This, like many other initiatives that sound commendable, must be contrasted with the State’s capacity to finance it, to maintain it in the long term and to ensure its sustainability. You probably have to focus not on all sectors, but on those most vulnerable.
That is, yes, but only in strata of maximum poverty?
Yes, it may be by way of strengthening the programs that already exist, always within fiscally viable limits.
What is the balance of the industry in the year that goes away?
The year has been very bad for the industry, the latest product drop data is -10%.
The president of Tecnoglass, Christian Daes, commented in a trill that “they send egg” who propose an increase of 2%. Does Andi ‘send egg’?
Opposing what is responsible is always popular. We are in a serious situation, we must be very prudent and make decisions for the welfare of all.
YAMID AMAT
For the time
