Colombia`s cities are Latin America`s most unequal, according the United Nations.
The UN claim Medellin is the city with the largest gap between the rich and poor, and that despite government claims to the contrary, the situation is worsening.
A report on urban equality in Latin America whose results were revealed yesterday, shows that inequality in Colombia`s urban centres grew by 15% between 1990 and 2010. Worse still, inequality is growing faster in Colombia than in any other of the 18 Latin American countries studied by the UN.
To preview the report`s official launch, in an interview with the newspaper El Espectador, the report`s director Eduardo Lopez Moreno claimed, “Colombia is the only Latin American country where inequality is growing in all of its cities”.
Consecutive Colombian governments have heralded record economic expansion over the past decade, pointing to annual GDP growth figures north of 4 per cent. But Lopez Moreno claims this has been “in no way pro-poor”.
Lopez appears to propose Colombia change its economic model; something Colombia Politics has long argued for both in the TV studios and on this website.
Lopez claims Colombia`s economy is run by “monopolies”, “oligarchs” whose hands so tightly grip the levers of business that the poor (and let`s be honest, the middle class too) are kept out of the game. According to Lopez, Colombia`s “markets work under the logic of hoarding or restricting (money and opportunities)”. In Medellin, he says, “the oligarchy continues to control the economy in the region, preventing wealth from reaching the poor.”
The comments seem to echo conclusions reached by Havard Professor, James Robinson in this year`s publication, “Another Hundred Years of Solitude” :
“Rich people in Colombia mostly make their money from monopolies in protected sectors that are created and shielded by the government”
Colombia Politics view
Robinson, like Lopez see Colombia`s economy as dysfunctional – almost pre-capitalist, even mercantile.
In this context any fight against poverty will fail. Colombia desperately needs to encourage the growth of more small and medium-sized businesses, to de-regulate and to establish a proper monopolies commission.
In private conversations accountants, politicians and small business owners have all told me that things are getting worse under the Santos administration. At the end of last year, the government introduced a new finance bill which reformed the tax code. All terribly boring stuff, but the key for many is that far from making things easier for the little guy – as we believe he should – Santos is rewarding the multi-nationals with cuts, at the expense of independent and start-ups on whom a greater tax burden has fallen.
Anecdotal perhaps, but it is an issue that unites many on the right with many on the left. Over lunch with the high-profile left-winger, Senator Jorge Robledo, I asked the campaigning firebrand whether he thought the anti-market measures used by socialist governments across the Americas would work in Colombia. He laughed and said that if he were in power the first thing he would do would be to move Colombia towards capitalism. His argument is that there is no competition in the market, that it is run by “combos” (code for mafia). The monopolies and oligarchical figures that rule the roost mean Colombia must be seen as a “pre-modern” and “pre-capitalist” society, he asserts.
Robinson, you feel, would agree:
“The richest men in Colombia have monopolized different sectors—Carlos Ardila Lülle, soft drinks and sugar; Luis Carlos Sarmiento,banking and financial services; Julio Mario Santo Domingo, beer.”
There are many succesful businessmen and women in Colombia, there are plenty of start-ups and entrepreneurs. The time has come however, for real reform, real competition and real capitalism.
Under the current rules, “the poorest 10 per cent of Colombians pay 8 per cent of their income in taxes, the richest 10 per cent pay just 3 percent” (Robinson).
Step forward a pro-business pro-change presidential candidate.
Picture, The Guardian.