Luis Carlos Villegas column on the economic downturn due to the covid – Columnists – Opinion


As of this writing, we were in 11th place among the 221 countries that are measured for the pandemic, with a number of infections similar to that of Germany, Turkey and Italy; and more deaths than Indonesia or South Africa, with more population. The 2,200,000 cases of covid and the 58,000 deaths associated with the virus in our country have rightly made us overlook the terrible economic decline suffered in 2020, dose horribilis. Prosperity is at serious risk from the pandemic.

GDP closed for December at $ 271 billion, the lowest level since 2009; Our economy lost 50 billion compared to 2019 and 60 billion compared to 2018. This is because, in dollars, the economy also contracted in 2019 compared to 2018, without a pandemic. Second tragedy: the income of each Colombian was reduced by 800 dollars last year compared to 2019 and 1,300 compared to 2018, leaving us at a poor level of US $ 5,400 per capita, that is, the GDP per inhabitant twelve years ago. When we came to dream that our economy would produce half a trillion dollars, that we would be the fourth nation in Latin America to reach that revolutionary milestone for the middle class, we lost a generation on the income side.

Third tragedy: the external debt in 2020 meant 55 dollars out of every 100 of production and income, more than double what it was just 8 years ago. The growth of the external debt 2018-2020 was 15 points of GDP; the total public debt, pesos and currencies, follows the same behavior and stands at an astronomical 64% of the product. The same is the fiscal deficit, which reaches a hazardous 6%. The next generation will have to work harder to pay off the remaining debt. And get more oil, gas, coal, iron, gold and copper; export more manufactures, agriculture and tourism; attract investment; save. Take care of the financial sector.

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Fourth tragedy: foreign trade, with a good performance of non-mining exports, compared to the region, fell 20,000 million dollars in 2020 compared to 2019 and the current account deficit is high. Only because of the 7,000 million dollars of remittances from Colombians abroad, uncertain how difficult the economic future of the countries of origin is, the current account is bankable. The level of investment fell to a modest 18.8% of GDP, the same as in 2010.

Fifth: unemployment rose to the levels of the late twentieth century. Today the number of occupied Colombians, less than 20,000,000, is similar to that of 10 years ago, when we had 6,000,000 fewer inhabitants.

Sixth: poverty rose in 2019 without covid; and in 2020, with the virus. The most widely used equity indicator, the Gini coefficient, which had been declining without exception from 2010 to 2018, rose again in 2019 and 2020.

The good news comes from universal health coverage, high international reserves, low inflation, and the lowest interest rates in decades; either by the previous administration of the Banco de la República. And good for the agriculture, which showed its face for the rest.

It bothers everyone that we started to get vaccinated late; but they will vaccinate us, anyway, between Pfizer, Moderna and Dian. But serious candidates to replace this government need to be aware of the post-covid setback, especially in the stability of the middle class and, therefore, of our democracy.

For those families that find themselves back in poverty, we must propose ways out and subsidies, aid and jobs, the education of children, the protection of the elderly and children, new housing and the formalization of the scavengers, who return the course, hope and reassure you. That is the people’s agenda; not the ideological flourishes or the little games with chamomile that flow from the political jugs.

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It’s the economy, ladies and gentlemen. The rest is stupid.

Luis Carlos Villegas

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