September 3, 2020
Colombian Civil Society Demands Comprehensive Social Protection Financed by Progressive Taxation
Guest blog by Alejandro Rodríguez Llach, Researcher at Dejusticia
Dejusticia is a Colombian think-do-tank with 15 years of history. Through campaigns, capacity building, publications and strategic litigation, Dejusticia has worked to safeguard human rights and strengthen democracy. In 2020, they were awarded the Tang Prize in the Rule of Law Category.
How are the impacts of the pandemic in your country evolving, and how are they diverging from those being seen in other contexts?
Colombia has had some of the most restrictive containment measures in Latin America, which allowed the country to slow down the spread of the virus in the first months of the pandemic, unlike other countries in the region who have experienced much higher contagion rates, such as Brazil, Chile or Peru. However, the pronounced fiscal weakness of the State has led to an inability to sustain social distancing measures and a progressive re-opening, after which new cases and deaths have increased on a daily basis. Most of the cases, as expected, are concentrated in city districts with higher levels of poverty and informal workers.
Indeed, informal workers are among the most impacted by social distancing measures, since their income depends on going out to work and on foot traffic. Lower-income populations have a higher prevalence of chronic non-communicable diseases such as diabetes or hypertension, which have been proven to be comorbidities of the virus, putting them at greater risk.
How has the pandemic changed economic policy debates in your country?
In order to mitigate the social and economic impacts of the pandemic, the government focused on providing unconditional emergency monetary transfers to poor and vulnerable households, and facilitating loans to business without liquidity.
VAT refunds and the Solidarity Income Program (“Ingreso Solidario”) were implemented in a timely manner, and are a significant step towards basic income-type social programs, something unprecedented in Colombia. Despite the early recommendations of experts to implement a payroll subsidy program to protect employment and the business environment, the government only launched the Formal Employment Support Program (PAEF) in early May. The program subsidizes 40% of a minimum wage for a company's workers.
Since then, policy debates have focused on strengthening these two strategies aiming towards a more comprehensive protection of vulnerable households’ income, employment, and the economy itself. Indeed, the scale and coverage of both measures is still limited and does not respond to the full extent of the problem. The program of unconditional transfers to vulnerable households–and other current social programs– exclude many households that urgently need some type of income to ensure their constitutional right to an adequate standard of living (mínimo vital). Furthermore, the amount of the transfers is one of the lowest when compared to similar programs in the region. Likewise, payroll subsidies are not enough to cover companies’ fixed costs, which might lead to bankruptcies and closures.
By the end of June, resources allocated to respond to the emergency in Colombia were about 2.4% of GDP, less than the average response in the region (4.5%) and those from similar countries, such as Peru (7%), Chile (4.7%) or Argentina (4.9%).
What are the priority economic/budgetary/resource measures you are advocating for in response to the pandemic?
We have promoted an emergency basic income program (with a view to extend it in the medium and long term), building on the Solidarity Income Program. This program should aim to ensure an adequate standard of living for the households most affected by the crisis.
In parallel, we have insisted on mobilizing more resources in a progressive manner, supporting the newly created Impuesto Solidario (Solidarity Tax–a 3-month tax on high earners in the public sector). However, we are demanding that this apply not only to public officials, but also to high-income earners in the private sector. We also call for direct central bank financing of the programs implemented in the emergency. We must also not lose sight of the need to carry out structural tax reforms, based on principles of tax justice, that would allow for a considerable increase in government revenue in the medium and long term, as well as redistribute income and wealth to tackle inequality.
What have been the challenges and opportunities for bringing rights into these debates? Is the crisis forging closer connections between different civil society actors and movements working for change?
The crisis has revealed the deep inequality and injustice of Colombian society and has focused the debate on how to make economic policies consistent with human rights. However, the current government considers these policies as extraordinary and there is little political will to make them permanent.
To challenge this status quo, we started by launching a legal challenge to the entire tax code on the basis of its lack of progressivity, in collaboration with a group of prestigious economists and constitutional lawyers. With this action, Dejusticia is part of a groundbreaking wave of strategic litigation on tax issues in the region. Regardless of the outcome of this process, Dejusticia and allies will persist in its fight for a truly progressive tax system, which is needed now more than ever in the context of the pandemic.
CESR has worked with partners in Colombia to challenge unjust fiscal policy measures which were having a devastating impact on rights enjoyment and peace-building efforts, even before the pandemic. In 2017, CESR collaborated with Dejusticia and Fescol to analyze and visualize how fiscal policy undermines social rights enjoyment and the implementation of the peace agreement in Colombia, on the occasion of the country’s Universal Periodic Review (UPR) at the Human Rights Council. This coalition played a key role in formulating recommendations on economic, social and cultural rights in the country. In addition, CESR is working with Dejusticia and other partners in Latin America to elaborate a set of Principles & Guidelines on fiscal policy and human rights. For more on CESR’s work and partners in Colombia, see here.
Photo courtesy of Dejusticia.