“Where is Jorge Visbal?” Critiques of Chávez, from the left
Dec 212006

Colombia’s government reported yesterday that the country’s economy grew by a white-hot rate during the third quarter of 2006 (July-September). The country as a whole was 7.68 percent wealthier on September 30 than it was a year earlier.

President Álvaro Uribe and officials of his government are quick to point out that the country has registered increasingly impressive economic growth rates since Uribe took office in August 2002. Indeed, Colombia’s economy is about 25 percent bigger today, in constant dollars, than it was at the end of 2002:

(Source: Colombian government National Administrative Department for Statistics, DANE [Excel (.xls) file])

In fact, if in August 2002 – the month Uribe took office – you had invested $100 in a fund tied to Colombia’s stock-market index, it would have been worth $862 by the end of November 2006. Colombia’s stock market has been one of the world’s fastest-growing, and has nearly recovered all ground lost during a mid-2006 hiccup in worldwide emerging markets.

(Source: Colombian government, Bank of the Republic [Excel (.xls) file])

This is all great news. But here’s the problem: in one of the world’s most economically unequal countries, it once again appears that not everyone has been invited to the party. There have been improvements in conditions for the poorest Colombians during the Uribe years. But these improvements have been far slimmer than the overall, aggregated national statistics might indicate.

When Uribe took office during 2002’s third quarter, 51 percent of Colombians were either fully unemployed, or underemployed (scratching out a living in the informal sector of the economy). By June of 2006, this number had only dropped to 45 percent.

(Source: Colombian government National Administrative Department for Statistics, DANE [Excel (.xls) file])

Poverty has only gone down slightly as well. Government statistics show the portion of the population living below the poverty line dropping from 57 percent in 2002 to 49.2 percent in 2005. This represents only a recovery of levels last seen in the mid-1990s (49.5 percent in 1995) after a sharp economic downturn in the late 1990s and early 2000s.

(Source: Colombian government National Planning Department, DNP [Acrobat (.pdf) file])

In other words: the country as a whole is one-quarter richer under Uribe, and its stock investors are more than eight times better off. But its unemployed and underemployed population is only one-tenth smaller, and its impoverished population has shrunk by only about one-seventh. The macroeconomic news is welcome, but Colombia has a very long way to go.

2 Responses to “Waiting for the trickle-down”

  1. jcg Says:

    I’m not an economist, but I believe that the trickle-down of a good overall macroeconomic performances will never be enough to compensate for Colombia’s huge quantities of inequality and poverty, at least not without going hand in hand with some pro-active, progressive policies.

  2. richtiger Says:

    With news of the recent economic growth in Colombia, the Polo Democratico has called on the government to generously increase the Colombian minimum wage. I don’t happen to know what percentage of workers in Colombia are legally covered by the minimum wage or whether the legalities are even generally observed, but a higher minimum wage would appear to be one of the “progressive policies” which jcg supports.

    Of course, much more radical income and land redistribution will be necessary if Colombia is to move from economic and political oligarchy toward a more democratic society.

    It’s time to get rid of the Liberals, the Conservatives, and the Uribe coalition. It’s time for Colombians who want true social peace to vote for the Polo.

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