What Jumps Out: Steps Forward, Sideways & Backwards

Labor reform 2.0 is on the verge of being passed by congress and then becoming law, marking a week of almost normalized political behavior. I gave you my read on Monday that the approval would go a long way towards relieving the pressure cooker of political polarization, and I stand by that.

The courts, in the meantime, have blocked the referendum via decree, and whilst Gustavo Petro expressed annoyance, it is now perhaps irrelevant, along with chatter of a national assembly, if the labor reform is passed into law.

Another reform, however, has run into problems. The constitutional court has questioned aspects of the pension reform, even though people have already begun moving assets around, and it has been returned to congress for revision. The legal system in Colombia is one of the slowest and bureaucratic on the planet, and these sorts of ‘after the event’ decisions only help to damage its reputation further.

Miguel Uribe is still fighting for his life, and whilst the political temperature has accordingly cooled, there are still too many in Colombia who wrongly think they are claiming the moral high ground by blaming the government when much of the evidence being discussed by the media points to different hands on the trigger. Many of the corporations and federations may dress up their support for Uribe in calls for unity, but they fail to hide the political message behind their public statements….shameful.

Given the ongoing madness in Washington’s it is good to see the government pushing ahead, looking to seek new partners and alliances. Recently, Colombia signed up to the new Silk Road agreement with China, and now they have been approved to join the BRICS Development Bank in order to potentially source new options for funding and partnerships. Much of the right is uncomfortable with this; however, it is wholly coherent and replicates in some respect what happened when, then number one export market, Venezuela, began to implode, and Colombia needed to seek alternative export partners.

Little economic data this week, however, April Economic Activity (ISE) from Departamento Administrativo Nacional de Estadística – DANE Colombia grew just 1.14% YoY in April, the slowest pace in five months. However, the season was more favorable and pointed to continuing healthy growth. We also have the latest import (and deficit) data due out.

Have a great Friday.

Regards Roops.

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Labor reform march. Photo credit: Presidencia de la República de Colombia.