What Jumps Out: Inconvenient Truths

An interesting few days, but there again, when isn’t it in Colombia?

US relations are again making headlines with support for the country (Plan Colombia) reportedly set to drop by 50% from $410 million USD to $206 million USD. Whilst a blow, in reality, Colombia shouldn’t need to rely on the US for such funds – time to grow up. This week, we also had the Republican extremists referring to Gustavo Petro (and others in the government) as habitual drug users and again making inferences regarding the assassination attempt on Miguel Uribe – all pretty pathetic. It’s hard to take Donald Trump or his cronies seriously when they have threatened any country that deals with Venezuela – he has now reportedly permitted Chevron to resume oil exploration. The New Silk Road seems ever more appealing.

The May trade data from Departamento Administrativo Nacional de Estadística – DANE Colombia hit the headlines with a troubling $1.4 billion USD deficit, only adding to concerns over the fiscal situation amongst the press. There is, of course, real pressure to improve the situation, and the government needs to look at the spending situation; however, much of the cause of the problem is an economy that is growing at a healthy pace. Lower inflation and interest rates are driving domestic demand, retail sales, and confidence, which saw imports rise 10.8% in May as locals continue to buy consumer durables from overseas – the main country of origin is at the other end of that Silk Road.

This surge in imports has been accompanied by weak export data. It is noteworthy that Petro has again expressed the need for Colombia to wean itself off its oil & coal dependence and focus more on agriculture. The former two categories are struggling with international sales, whilst the latter is booming. An uncomfortable truth for the elite & the commodity sector.

Another element of the economic recovery is record low unemployment; however, this appears to be an inconvenient truth to the press (Portafolio), preferring to highlight that Colombia has the 3rd worst labor situation in the OECD – OCDE. A particularly lazy piece of journalism, considering the makeup of the 19 other countries in the survey. Yes, there is too much informality, but even Bancolombia this week pointed out that the labor reform should help that situation.

Finally, good news on poverty. The DANE reported a drop in the national number from 34.6% to 31.8%. That is still a disgrace given the natural resources that Colombia enjoys, but considering the sky-high GINI coefficient not a surprise. The good news is that they are record low numbers – but work to do !!

Elsewhere, there has been no advancement in the various reform processes, and the countries’ politicians continue to take cheap shots at one another.

Have a fabulous Friday.

Regards.

Rupert.

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Presidential candidate and Senator Miguel Uribe Turbay with his wife, Maria Claudia Tarazona. (source: social media)