Conflict Alerts # 372, 5 May 2021
In the news
On 3 May, Colombia's Finance Minister Alberto Carrasquilla resigned following days of deadly protests over a controversial tax reform proposal that he had piloted. In a statement reported by Reuters, he said: "My continuance in the government will complicate the quick and effective construction of the necessary consensus." His resignation came a day after President Ivan Márquez announced his decision to withdraw the tax reform proposal from Congress. He said: "I am asking Congress to withdraw the law proposed by the finance ministry and urgently process a new law that is the fruit of consensus in order to avoid financial uncertainty." However, stressing the need for tax reform, he added: "The reform is not a whim, it is a necessity."
Earlier, on 28 April, Colombia's unions had given a call for a national strike against the tax reform proposal, which has since spiralled into a countrywide protest, accompanied by a brutal police response. According to The New York Times, at least 19 people have been killed and hundreds injured in the violence.
Issues at large
First, the social discontent in Colombia. The scope of protests has only expanded since it began on 28 April, reflecting a larger discontent in society that stems from rising inequality, economic downturn due to the pandemic (and lockdown) and systemic issues in policing. People are also unhappy with the forced displacement of thousands of people as different armed groups fight amongst each other to occupy the space left by the FARC group, which was disbanded after the 2016 peace agreement. Due to the factors above, protests have continued despite the withdrawal of the proposal.
Second, the tax reform proposal as an immediate trigger. President Márquez has pushed for tax reform to increase revenues to lower the fiscal deficit, boost the economy ravaged by the pandemic and fund a welfare policy called Ingreso Solidario, which supports poor households. The proposal entails expanding the tax net, eliminating income tax exemptions and increasing the value-added taxes on goods and services. The working classes and middle classes, however, have opposed these proposed measures citing their already deteriorating economic situation.
Third, brutal police response making the situation worse. The security forces and riot police forces have been accused of live firing and driving motorcycles into protesting people. They have killed unarmed protestors, including children. On 3 May, General Vargas, head of Colombia's police force, said that 26 investigations into police misconduct had been opened.
Even as the state initially responded to the protests brutally, it did the right thing withdrawing the proposal, saving the country from more mayhem. However, the protests have nevertheless continued, reflecting larger discontent. In that context, withdrawing the proposal is not enough. Unless the larger discontent is addressed, protests over different issues will keep erupting.
President Márquez has announced that he will build a consensus on tax reform; however, given the intensity of anger and protest, it will be difficult to pacify the masses and reach a consensus. His regime faces a tough choice: while at one end, there is a need to address the rising fiscal deficit, at the other, taxing people will be contentious. He may have to find a third way forward to raise revenues.