What Jumps Out: Quantity Not Quality

We have seen the long lists of pre-candidates appear, ready to seek the nomination for their party or faction. The chameleons are at work, morphing themselves into whatever personality is necessary to get on an election ticket. What is abundantly clear is that amongst the 20-25 raising their hands, none leaps out as a person who can take Colombia forward. Instead, we have those who have failed as administrators, others with the whiff of corruption on them, more who are under investigation, and above all, those who are only seeking office for self-serving purposes.

The tax reform ($4.5 billion USD) is due to be presented (dens of iniquity such as gambling, tobacco, alcohol, and the church are included) and will form an important component of the $149 billion USD total budget, albeit that the opposition is looking to trim it by over $10 billion USD, including the tax reform component. In short, the environment is hostile. The budget is seen as excessive by many, but of course, that depends on your political ideology. Those in government are looking to improve the lives of millions in Colombia who are the forgotten class, Orwell’s proletariat if you like, and that isn’t cheap. One problem, of course, is money; Colombia doesn’t have enough of it. The other is the March legislative elections, which means that the current congress is not going to vote for Christmas.

Taxes are an ongoing theme. Whilst they are set to hit a record collection of $70 billion USD, up 15% YoY, that is still almost $5 billion USD below the budget, and therein lies the problem. The DIAN is still working on thousands of overdue payments, and we are already discussing the 2026 reform. For those wondering why Gustavo Petro is undertaking a second tax reform, both Iván Duque and Juan Manuel Santos did the same.

For those at the back who are still wondering why, the Colombian tax system is broken. It doesn’t work, is open to abuse, is unfair, and invites evasion, especially by the elite.

Asobancaria was upstanding this week and also discussed the deficit issues, but they also emphasized four positive aspects of the economy. Lower inflation, which hits 4%, will trigger lower rates. Higher confidence—this week, Fedesarrollo reported improved industrial and retail levels for July to accompany the already reported consumer data. Lower unemployment and gradually improving investment levels.

Finally, are we seeing an oil romance? Canacol Energy Ltd has been the last Canadian standing for many a year; few understand why it wasn’t snapped up much earlier, given its natural gas assets. But the press is reporting that Ecopetrol is flirting with Canacol, whose stock price erupted on Thursday – whether it is a JV or equity purchase, I hope my old chum Charles drives a fearsome bargain after so many years supporting Colombia.

Have a wonderful Friday.

My regards.

Roops.

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Capitolio Nacional (Photo: Oficina de Información y Prensa Cámara de Representantes)