Colombia’s President, Gustavo Petro, has proposed changes to the country’s medium-term fiscal framework to take on about $60 billion ($13.633 million) in domestic debt to buy land and hand it over to farmers at a lower price.
The president’s plan is known at a time when the country is going through a phase of land invasion in several regions of the country by indigenous people and peasants who misinterpreted the Petro campaign’s promise of agrarian reform in search of benefiting the poorest.
“Three million hectares, you have to buy it so you don’t quarrel with the owners of the land at a commercial price because if they don’t they will say it’s expropriation.”
“Three million hectares for 20 million ($4.544 million) worth $60 billion each. Where do we get that money from? We can think of it in six years, let’s get 10 billion ($2.272 million) annually in debt, We pay the landlord with property rights.”
The fourth economy in Latin America has suffered a significant increase in debt in recent years in the face of the coronavirus pandemic, which has led to it losing its investment grade by risk rating agencies.
The current medium-term fiscal framework states that the country will close with a level of public debt this year equal to 56.5% of GDP and a fiscal deficit of the central national government of 5.6% of GDP and 3.6% by 2023. “What happens with the fiscal framework What would Colombia prefer, not making peace, sliding into war or changing the fiscal framework so that we can go into debt with the landowners to pass three million hectares to the peasants?”
The Independent Commission for Tax Governance (Carf) said this week that although Colombia will comply with the fiscal rule this year and next, public finances are at their limit, so in addition to getting approval for tax reform, the government should encourage more changes in the future. To reduce public spending and reduce debt. Said Sergio Olarte, chief economist at Scotiabank for Colombia.
“It is important to assess both sustainability and effective compliance with the government’s plan, after all 60 billion pesos is about 5 points of GDP, and in four years there will be a lot of money,” he added.
Colombia is the seventh country in the continent with the largest geographical extension according to the standards of the Organization of American States, OAS, but it has only 114 million hectares.