I remain steadfast in believing the election of an alternative to those who did little to improve poverty, failed in education, and oversaw wanton corruption was a good thing – unfortunately, Gustavo Petro failed to learn his lesson as Mayor of Bogotá that you cannot change the world in four years. He over-promised during his election campaign and has disappointed too many people – and there are still 17 months until he hands over the keys to his office.

This week saw the resignation of his third Ministerio de Hacienda Diego Guevara who will be replaced by German Avila – one wonders if the outgoing minister even had time to unpack his boxes – clumsy in the least, damaging confidence and probably impacting the Peso ($4134) which has weakened this week.

Petro declared a public holiday this week so people could protest in favor of his reform process. Numbers were far from biblical, and regardless, they won’t have an impact. He will only harden the attitude in Congress against the reforms, as politicians rail against perceived anti-democratic behavior.

FDI dropped 22% in February to $759 million USD according to Banco de la República – Colombia – again, confidence is being impacted by the perceived lack of political and economic direction.

Domestic demand remains in rude health with imports according to Departamento Administrativo Nacional de Estadística – DANE Colombia rising 8.5% in January with a 15.5% rise in consumer goods. This, as expected, led to a lumpy deficit of $1.28 billion USD as exports remain under pressure.

This is very much in line with the January ISE (economic activity) report, which saw a higher-than-expected rise of 2.65%. So we continue very much in the same vein, the economy moving steadily ahead, but the politicians, who are already positioning themselves for May 2026, are doing their best to derail confidence in the country.

An uninspiring week.

See you all soon.

Roops.

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Photo credit: Gustavo Petro/X.

No one is pretending it’s an easy country to run. On Friday, the Departamento Administrativo Nacional de Estadística – DANE Colombia revealed the latest real sector data for January, and it was positive. Manufacturing production rose 1.9%, that’s two glorious months in positive territory, however, retail sales grabbed the headlines. They rose 10.1% versus 4% expected. Electronic goods rose 50% and vehicles 23% – the Colombian economy has long since been based on commerce and locals due to lower inflation and overnight rates are back to doing what they are best at.

But as BBVA reported last week, the flip side is that they are poor at saving, and that has a downside for the economy as there is less easy money to lend and invest.

Also, that same rush to the shops as domestic demand is driving imports upwards, with manufacturing goods in high demand. Exports can’t keep pace and that leads us to the biggest economic issue the country is facing – fiscal imbalance. Huge deficits each month and despite remittances now regularly hitting $1 billion USD per month, it’s not enough.

Colombia needs to spend to lift more people out of poverty, to provide education and the opportunity for dignified lives, but there is a constant struggle to balance the books. For several years Colombia has struggled, due to external events, to get inflation under control, but the second spending gets easier we see the above cycle.

For all the chatter about commodities, they are not a long or even medium-term solution. It’s been around a decade since Colombia last produced 1 million BPD of oil – those days are gone and the country needs to seek new solutions to balance the books. Tourism is certainly one and agriculture is the next, however, that will require land reform and the repatriation of lands stolen by the ruling elite, especially in the years following the turn of the century, it’s hard to see that happening soon.

Here endeth the lesson.

Have a great week.

Roops.

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Headline photo: One of the displays from Colombiatex in 2016. (Photo credit: Loren Moss)

Today, good news only. Let’s chat about Colombia’s continued home run, tourism. Whilst Gustavo Petro was only picking up the baton of the upward curve that had existed since COVID-19 finished, he strongly declared that tourism would eventually replace commodities in terms of dollar revenues and was the fastest form to lift needy communities out of poverty.

Last year saw (tourism) dollar revenues hit $10 billion USD, not quite at commodity level, but closing very fast, and Colombia is only just beginning to realize it’s enormous potential as a desirable destination. The United Nations has also supported globally the concept of decreasing poverty via tourism, and there is a huge drive to push that campaign forward.

This week, ANATO Vitrina Turistica, the largest tourism fair in the region, took place in Bogotá. A total of 5,000 companies were represented across 46 countries with 50,000 attendees. I was there, and the pavilions were hopping; at times, it was like New Year’s in Times Square. Equally, at FITUR in Madrid a month ago, Colombia was in play.

2024 was a record year, and already, 2025 is set to surpass those numbers. In January, international airline arrivals increased by 13% to 2,254,000. Attendees at ANATO also reported a healthy start to the year.

But it will not be Medellín or Cartagena that will be the forward-looking driver. Instead, it will smaller towns and villages as visitors locally join the international tendency to seek more adventurous destinations. Some future hotspots haven’t been heard of by most Colombians, let alone by those arriving from overseas.

When will it match oil & coal? Judging by the vibes in the pavilions, it will possibly be sooner than expected, but in an ideal world, both will continue in rude health.

In other news. From Fedesarrollo, there was an improvement in both industrial and retail confidence, this dovetails with the recent consumer reading.

The government also announced that it had carved out 69 sectors, spread across 270 square kilometers, for future offshore eolic energy auctions—that’s wind power to us mere mortals.

Always good to end on the positives.

Have a great Friday.

Regards Roops.

Never miss Rupert’s latest commentary.
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Photo credit: wjgomes from Pixabay.

In a “statistical yearbook” released earlier this year CEPAL published the improvements in terms of the sociodemographic, economic and environmental development of the nations that form the region, one of them being Colombia. In the analysis, the organization considered topics such as population, work, education, health, housing, and essential services along with poverty.

Unfortunately, Colombia did not have the best results in several of these areas, which reflects the great political, social, and economic problems that the national territory is experiencing. In this sense, one of the main affected areas is the cost of living, as evidenced by the high poverty and extreme poverty rates, which increased, mainly, after the COVID-19 pandemic.

“In the social field, the yearbook data shows a slight recovery in some indicators after the COVID-19 pandemic,” stated the report. “In 2021, poverty in Latin America reached 32.3% of the population, including 12.9% of the population that lives under extreme poverty. These statistics represent a slight drop of 0.5% in poverty and 0.2% in extreme poverty compared to the previous year.”

According to the report, Colombia ranks fourth among studied countries in the region with the highest percentage of people living in conditions of extreme poverty (15%), only surpassed by Honduras (20%), Nicaragua (18.3%), and Guatemala (15.4%). Likewise, it would be fifth in terms of having the most inhabitants living in poverty.

Only Honduras, Nicaragua, and Guatemala have a higher percentage of people living in extreme poverty among the Latin American countries studied by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL / ECLAC).

However, this is not the whole picture, since the nation also ranked fifth in terms of the highest unemployment rate, with 13.4% of the population out of work. Although it is stated that 54% of Colombians are employed, the percentage is still below the employability average of the region.

How does this compare to the official numbers of the National Administrative Department of Statistics (DANE)?

In a report presented in May of this year, the body highlighted that the poverty indicator had decreased to historic lows, 12.9% at the national level, compared to 16% registered in 2021. Likewise, it decreased at 8.7% in the capitals and 27.3% in populated centers and dispersed rural areas.

“The changes that took place between 2021 and 2022 in the incidence of multidimensional poverty were -3.1 percentage points at the national level, -2.8 percentage points in the capitals, and -3.8 percentage points in populated centers and dispersed rural areas,” stated the agency’s analysis.

Specifically, during 2022, there was a reduction of 1.4 million people living in poverty. However, there are still 6.6 million people who live in poor conditions with all kinds of serious material deprivation, as well as the deprivation of basic rights such as health or work.

While too many Colombians continue to live in poverty, the incidence of multidimensional poverty has been steadily falling in recently years, according to the National Administrative Department of Statistics.

Regarding the incidence of multidimensional poverty in the regions, the highest levels occur in the Caribbean and Pacific (except Valle del Cauca), with 21.4% and 20.7%, respectively. The Central region is in third place (11.7%), whereas the lowest percentage is seen in Bogotá (3.8%), followed by Valle del Cauca (9.7%), and the Eastern and Antioquia regions (10.7%).

Finally, regarding the incidence of multidimensional poverty according to the gender of the head of household, in 2022, 14.1% of the people who belonged to a household where the head of household was female were multidimensionally poor, decreasing 3.5 percentage points with respect to 2021.

On the other side, 12.0% of the people who belonged to households headed by men faced multidimensionally poverty in 2022, 2.7% less than in 2021. “The incidence of multidimensional poverty is higher in homes whose head of household is a woman,” said DANE in its report.

It should be noted that, at the beginning of 2023, the national government launched a new program to help the most vulnerable households that are below the poverty line. It is called Renta Ciudadana (Citizen Income), which aims to provide enough money “to fight hunger, progressively achieve economic autonomy and access the enjoyment of fundamental rights,” according to the Colombian Department of Social Prosperity.

The first payment was made between April 29 and May 30, while the second payment is made beginning in last days of July. It should be noted that the government clarified that the transfer will be made every two months and that those who need it most will be able to receive up to 1,000,000 Colombian pesos.

The Other Reality

Whereas more than 6 million Colombians must seek how to survive in this country on a daily basis, others live a totally different and more favorable reality. We are talking about politicians, who currently enjoy salaries that could change the lives of more than one person.

In June of this year, after six months in office, Gustavo Petro, President of the Republic, signed the decrees to formalize an increase in the salary of public officials by 14.62%. This includes people who provide services to the country, from ministers, counselors and cabinet members, to lower-ranking employees linked to the state.

Besides, among the benefited by this increase, are both the president and the vice president Francia Márquez. In this context, in accordance with Decree 904 of 2023, the new annual salary of the president is 47,823,220 pesos and the vice president earns 32,561,343 pesos.

Regarding the ministers’ fees of the 18 portfolios that make up the executive power, it will be 24,238,746 pesos. Additionally, at the end of last year, Petro also announced a 7.26% increase in the salaries of senators and representatives, reaching 37.8 million pesos.

READ MORE: Former Colombian President Juan Manuel Santos Releases New Book On Fighting Poverty

If we compare the normal salary of an ordinary citizen with that of a politician, an abysmal difference can be seen, since currently the minimum wage is 1,160,000 pesos, plus the 140,000 pesos for transportation assistance, bringing the monthly total to 1,300,000 pesos. All this without counting the millions of workers who live in the informal sector or those who earn much less than a monthly minimum wage, who usually subsist on debt and resorting to personal loans.

This panorama is a reflection of the inequality that exists in the country and that, sadly, is repeated, to a greater or lesser extent, in other nations of the region, since every day there are many individuals who must find ways to survive the poverty that surrounds them and their family.

“The region experienced a transformation in all sectors,” said Héctor Salazar, manager of the social sector of the IDB. “Between 2002 and 2008 — the years of highest growth of per capita GDP — poverty decreased 11% faster, and the size of the middle class expanded by 35% more than during the period of slower growth after 2008.”

In short, the gains are slowing, and they have not been distributed equally among countries, age groups, or classes. The result is a persistence in Latin America having the most unequal economies in the world, with Colombia, Costa Rica, and the Dominican Republic each experiencing minimal changes in wealth distribution since 2002.

The report also shows that nations across the region continue to struggle in promoting economic mobility, specifically among people with incomes ranging from $5 USD to $12 USD per day. While some progress has been made, the vulnerability remains given how easy it is for someone making so little to slip back into poverty.

Thus, all the progress — which also includes a 65% reduction in infant mortality, near universal access to primary education, and an increase in life expectancy — must be contrasted with the ongoing hurdles. Children and women still have a long way to go in many locations, and Colombia remains a laggard on education spending, allocating just 3% of GDP to investment in this crucial sector.

“Children have benefited the least from programs and cash transfers designed to combat extreme poverty, and therefore it is important to direct special attention now to childhood, since that is precisely the stage of life when inequality begins,” said Marcos Robles, economist with the Social Sector and co-author of the report.

Suzanne Duryea, economist with the Social Sector and also a co-author of the report, noted that the aging popular and smaller family size have changed the structure of the average family. Women are the ones who face the brunt of adjusting to this new reality — which can create both burdens and opportunities for advancement depending upon the circumstances. “The economic empowerment of women is changing family dynamics and transforming societies in the region,” said Duryea.