The national strike and the vandalism that were unleashed around it ended up worsening the economic outlook, already affected by the pandemic.
Hundreds of people gathered today in Cali to be part of the march of silence and reject the wave of violence that unleashed in the capital of Valle del Cauca in recent weeks and that has the city paralyzed. Although they made it clear that they support the requests of different sectors that declared themselves unemployed, they do not want to be affected by it.
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And it is that the city and its people were in the middle of a crossfire, disorder and blockades that have prevented them from mobilizing and advancing in the task of reactivating the economy, since the critical point of the situation came just as the country was emerging from a series of restrictions decreed by the National Government and local administrations on account of the third peak of the COVID-19 pandemic.
More than 2.2 million people live in Cali, 97% of them in urban areas. According to information from DANE, more than half (53.4%) are women and 15% are between 19 and 30 years old.
By 2019, 21.9% of the population did not have sufficient income to cover their food and housing needs. By 2020, during the pandemic, that figure rose to 36.3%. And I may be older, if I had not had any subsidy or help from the Government, I could have reached 37.8%.
This means that the population living in poverty increased 10.6%, from 558,360 people with a monthly budget of less than $ 356,900 to 934,350 people, which means 375,990 additional people. It was the second city with the highest increase in the poverty rate after Bogotá. The same happened with extreme poverty, which showed a variation of 8% with 221,522 additional people in this condition, for a total of 342,438 Caleños whose monthly budget does not reach $ 152,400.
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These figures are explained in the loss of employment, the main source of income in Colombia. According to DANE, for the January-March 2021 quarter, Cali accumulated an unemployment rate of 18.7%, however, among young people (population between 14 and 28 years old) the figure is 27.2%. Although the figure has recovered compared to the first year of the pandemic (1.2 million employed, 113,000 additional), it is still in negative territory with 232,000 unemployed people.
However, before the pandemic, the capital of the Valley already had problems keeping the economy going, the most productive sectors do not generate as many jobs as in the past and informality was never so high (48.5% as of March 2021). In addition, the dependency that the city has on entrepreneurship and the service sector makes it vulnerable.
Follow the news of El Espectador on Google NewsBut this was not always the case, Cali came to contribute more than 12% of the national Gross Domestic Product (GDP) and was nationally known as a city with an industrial and even agro-industrial vocation if the panorama is expanded to neighboring municipalities. However, according to Mario Valencia, director of the Cedetrabajo economic studies center, the change in orientation from production to commercial research, “which when not linked to production generate very little value”, transformed the economy in 20 years .
According to the Valencia analysis, in two decades imports grew 1.4 times faster than exports, “the main export product of Valle del Cauca is its workforce. A quarter of all remittances from Colombia are in the department and represent 90.3% of its external sales, ”he posted on Twitter.
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But not only the 14 months that the pandemic has spread and the decisions taken to control the contagion affected the macroeconomic accounts of Cali, the national strike that began on April 28 and the acts of vandalism that were unleashed around it ended up worsening the panorama and reversing the recovery process that had been taking place at a slow pace. Currently, a large part of the companies are closed due to the public order situation, because they were vandalized, due to lack of inputs to produce, due to the inability to market or move merchandise, due to the inability of workers to fulfill their hours, etc.
Last week, the Inter-union Business Committee of Valle del Cauca sent a letter to the President of the Republic, Iván Duque, along with two other organizations in southwestern Colombia, 39 unions, chambers of commerce and companies, in which he asks the Government to take urgent measures. and immediate “to face the delicate situation that the productive sector is going through and the crisis of the business fabric.”
These include a special program of accompaniment to debtors of the financial system for the southwest of Colombia that allows financial institutions to address the situation, without affecting the conditions of access to credit for companies, specifically that it translates into financial support for restructuring of financial obligations (new terms, grace periods, rates, forgiveness of interest, among others).
They also requested the suspension of the sanctions for the payment and presentation of tax obligations such as VAT, equity and withholding at source, the extension of the date to comply with these obligations and the postponement of the presentation of exogenous information to the Dian.
Finally, they asked for additional monetary support to the existing ones to maintain employment (payroll and social security) and to survive the economic damage that has generated the paralysis of productive activity.
The businessmen expressed their support for the channels of dialogue and agreement and recognize the demands that the country demands, they only hope that solutions will be built “hand in hand with all the actors.”
