The fury overflows in Colombia

Gabriela Pinilla, Man killed in the struggle for the roof, Fragment of the work Bairro Policarpa. Acrylic on paper, 25 X 30 centimeters, 2011, Bogotá, Colombia
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By Estefania Martínez*

The mobilizations in Colombia created an important precedent for rethinking the present and recovering class consciousness in a country that has been alienated from its own history.

In Colombia, the proposal for a profoundly regressive tax reform – which seeks to “save the State” from the fiscal deficit it found itself in after the crisis – was the last straw that overflowed the cup and took thousands of people in different cities and territories of the country to join in the massive national day of strike on Wednesday, April 28th. There were marches in all cities, including municipalities farther from the agricultural and extractive frontiers, in Choco, Meta, Vichada and Arauca.

In the midst of the widespread lack of protection experienced by the Colombian population, with more than 72 deaths from Covid-19, more than half of the workforce in the informal sector, 4 million people unemployed and a rural sector abandoned to its fate, the government intends to approve a reform that results in more taxes for the State. While there are models of progressive tax reforms that seek to tax corporate profits and redistribute wealth, the current reform in Colombia is, on the contrary, a reform regressive with characteristics of ancien régime: it seeks to make the masses pay indirect taxes, to tax the wages of workers, and at the same time excludes “the nobility”, ecclesiastical power and the capitalist oligarchic class from doing the same. It also seeks to preserve the State's military budget to maintain the territorial control policy and ensure the neoliberal development model based on land ownership and expropriation. It is by no means paradoxical that it is a “Duke” who is behind this reform.

The illusory nature of equality and solidarity in the neoliberal regime

The problem is not that the reform “will make everyone pay taxes”, as some benevolent messages that have been circulating these days on Facebook and Twitter have indicated, motivating people from different social sectors, political parties, origins and religions to join the protest. against the government's tax reform. It was clear from the beginning, when information about the reform project leaked, that it did not intend to tax “everyone”, but only the non-rich. The so-called “Sustainable Solidarity Law” is a tax reform proposed by the current government's Urib group to make public finances viable in the context of the crisis and maintain the confidence of foreign investors and creditors.

The word “solidarity” is a euphemism taken from current reforms in Germany, France, Spain and Italy to name the “temporary” wealth tax, which seeks to make the rich contribute a little to rebuilding post-pandemic economies. In Colombia, the law proposes the creation of a wealth tax of 1% for wealth exceeding 4,8 billion pesos (US$1,35 million), and of 2% for wealth exceeding 14 billion pesos (US$4 million). Likewise, it proposes the reduction of taxes on corporate income, the creation of green taxes to mitigate climate change (for example, surcharges on gasoline, biofuel diesel and ethanol, and taxes on plastic) and the collection of contributions from workers in the public or private sectors who earn more than 10 million pesos a month (about US$2.765).

According to ECLAC, in Latin America, those among the richest 10% own 71% of the wealth and pay only 5,4% of taxes on their income. In Colombia, the richest 1% pay less taxes in proportion to income, in a percentage below the regional average. Therefore, while the reform may at first appear to be a “progressive” reform, it is not.

Reform actually seeks to ensure that the rich pay less by granting them handouts to deduct their wealth tax from the income tax, which in turn is set at low marginal rates (which in other places is called the "marginal rate trick”); on the other hand, the tax does not apply to the profits of companies that, on the contrary, would receive a reduction in the tax burden that would be assumed by a new group of people obliged to declare: the working class that earns more than 2,6 monthly minimum wages (2,4 million pesos, equivalent to 663 dollars a month).

But the most regressive part of the measure is the attempt to increase the VAT [Value Added Tax] from 16% to 19% on a series of basic consumer products (such as eggs, coffee and milk) and on tariffs for services electricity, gas, water and sewage services. According to official statistics, an average family needs about half a monthly minimum wage to cover food expenses and a little more than one minimum wage to cover other basic needs, such as transportation. Even so, this number does not include the high health costs – given the saturation of the subsidized health system and the cost of medicines in a country where prices are set by pharmaceutical multinationals – nor the debts with ICETEX [Instituto Colombiano de Crédito Educativo e Technical Studies Abroad] to pay for private higher education in view of the defunding of public education.

However, with the reform, the government intends that the highest percentage (74%) of the money raised come from this group of people considered “normal people”, while companies would contribute only 25% (which does not include churches, a lucrative sector that , however, President Duque refuses to tax). Thus, an additional 25 billion pesos (about 6,85 billion dollars) was expected to be collected from the budget for the coming years.

President Duque defended the law even after the massive protests that took place on April 28. According to him, it is the only alternative that would allow the country to reduce debt, increase revenues and stabilize fiscal accounts in the midst of an economic crisis caused by the coronavirus pandemic, while maintaining social welfare programs. By this he is referring to programs such as Renda Solidaria, which provides 160 pesos (less than US$45 a month) to 5 million Colombian families, support for low-income students to study in private schools and universities, and the support for small and medium-sized companies to pay the benefit toyoung people between 18 and 28 years old. These programs, which form part of the set of policies for the reduction of poverty and inequality, were created, however, to put a hot towel on the same fiscal discipline model, based on the principles of neoclassical economics that suggest the withdrawal of the State from providing basic social services. Instead of restoring gratuity and ensuring the quality of public services to better face the current health crisis, the government's proposal is to maintain the neoliberal model that benefits a minority while crumbs are thrown at the majority.

Duque's obsession with the fiscal deficit and growth

Duque’s “post-pandemic solidarity reform” offers nothing different from the policy package launched in 2018, according to the Economic Growth Law, which had been constructed following to the letter the recommendations of international organizations such as the IMF and the World Bank and the mandates (still in force in Colombia) of the Washington Consensus: fiscal discipline, cuts in public spending, financial liberalization, trade liberalization, foreign direct investment, privatization of state-owned enterprises. This law sought to reactivate the economy and generate confidence in investment, after the regional slowdown experienced as a result of the fall in raw material prices in 2014. The Duque government enacted austerity measures and cuts in public spending, reduced taxes for companies and stimulated the banks. And this was reflected in a GDP growth of 2,7 points at the end of 2018, which resulted in the extraordinary increase of the profits of the financial sector (11 billion pesos in 2019, with a return of 12%), while the country plunged into misery and went out to protest in the multitudinous march from 21N (which had fatalities) against the already announced tax reform and other additional reforms of the pension system and the labor regime.

After these protests, the government tried to regain its popularity and give the people a “little contentment” with panem et circenses: created a crazy VAT-free shopping day during the pandemic – which became internationally known as “COVID Friday” – when thousands of people went out to gather in shopping centers and supermarkets, some of them using the Solidarity Income subsidy, to buy things without taxes and thus contribute to increasing sales of the large chain stores and supermarkets. This did not help to regain popularity, not even among the rich who felt “cheated” because the tax reform includes a wealth tax, when the current “National government he was elected under the banner of a strong arm against insurrection and criminality, but especially because he would lower the high tax rate charged to businessmen”.

Why is the government so obsessed with reducing the fiscal deficit and looking for new sources of funding for poverty subsidy programs? On the one hand, there is an interest in continuing to maintain the base of supporters in the popular classes and thus preserving the right-wing vote in Colombia, although, as former president Álvaro Uribe (and natural leader of the right-wing Centro Democrático party) anticipated, “the reform harms the party”. On the other hand, there is Duque's obsession with adhering to the principles of the neoclassical economy he was trained in, according to which greater fiscal discipline and deficit reduction are necessary to ensure growth. Finally, there is pressure and commitment to finance a large number of infrastructure projects that should allow Colombia to be a developed economy by 2035, for which the country needed to prove itself as an attractive location for investment.

According to the Global Competitiveness Index created at the billionaires' forum in Davos, Colombia occupies the 104th place, in a list of 141 countries, in terms of the quality of its infrastructure road network, which is why the Duque government intends to use a part of the public budget (3,3 billion pesos) to finance the works of the Bicentennial Pact: a series of roads, known as “4G and 5G”, to improve the transport of goods in different regions of the country. This represents a gold mine in terms of contracts for developers. and for international capitals interested in participating in these projects. In addition to contractors (among which are some companies of the conglomerate whose main shareholder is the Colombian tycoon Luis Carlos Sarmiento Angulo, one of the richest men in the world with a fortune close to 12 billion dollars), some national oligopolistic sectors would also benefit . The sugarcane sector, the federation of cattle breeders and the companies of the Antioquia union, which in turn control the main supermarket chains and basic industries, not excluding the multinational companies that currently operate in the country, also would benefit.

The policy of control over territory and population

Although the national oligopolistic sector was consolidated in the 60s, when the pact between the landowner class and the national industrial class was developed under the import substitution industrialization model (which at that time also granted them economic stimuli and tax exemptions and supported the agrarian counter-reform process), the current model of accumulation was consolidated in the 90s with the neoliberal reform of economic opening. The latter decentralized benefits and reduced the State's participation in the sectors of energy production and distribution, health and other basic social services, but maintained protectionist measures for the oligarchic sectors. Since then, the model of accumulation is based on the exploitation of urban classes through consumer goods, energy tariffs and public services, which, in turn, has been possible thanks to the way in which the countryside and the rural workforce are exploited. : in Colombia, the peasant sector produces 70% of the food, but 1% of large properties rural areas concentrate 81% of the land.

As David Harvey pointed out in his analysis of accumulation by dispossession, the expansion of capital in the neoliberal phase was based on the speculation, depredation, fraud and theft of a quantity of social wealth which has become the new basis of accumulation. These dynamics, which resemble the practices of accumulation that Marx considered “primitive” or “original”, are by no means a “phase” or an “exception” proper to the history of the “dissolution of feudal society”. Nor are they an exception in Colombia, where the accumulation model was consolidated through the dispossession and displacement of thousands of people from their territories (including peasants, indigenous peoples, Afro-Colombian populations), where today large agricultural properties with incentives (low taxes) to produce palm oil, biofuels, animal concentrates and meat for export.

Along the same lines, the Duque government prioritizes, within the State's public spending, the budget destined to maintain the internal war (10 billion pesos in 2018, being one of the countries that spends the most on war). In Colombia, social control through a strong military policy and a large police force capable of repressing any act of mass uprising allowed it to consolidate itself as one of the most stable political systems in the region. This includes more than seven million internally displaced people (second only to Syria) and the killings of civilians in protests. Military spending also makes it possible to maintain control de facto on population and territory, particularly in regions that do not have access to any state services. In particular, the military counterinsurgency policy implemented in Colombia remained a key strategy of neoliberalism to guarantee the security of oil companies in areas of guerrilla control and to preserve the interests of the landlord class (cattle ranchers). In any case, it is thanks to this policy that the State has access to international aid programs for the fight against drugs that finance the spraying of glyphosate in the territories of indigenous populations, regardless of the proven negative effects that this has on health and the environment. environment.

In this sense, the strike is also a response to the recent murder of the indigenous governor Liliana Peña, in the department of Cauca, in a coca-producing area, and to the murders of more than 1.100 peasants, union leaders, Afro-Colombians and women since the signing of the Havana peace agreement between the state and the FARC guerrillas in 2016. An agreement that the government has ignored. On the contrary, Duque sought to reinforce the militaristic approach to the policy that continues to add more extrajudicial victims to the so-called “false positives”, as defined by the murder of civilians disguised as guerrillas and belligerents presented as “combat casualties”, during the “Security Democracy” by Álvaro Uribe Vélez.

Where will the strike go?

The popular uprising that gave rise to the February Revolution of 1917 in Russia began under conditions similar to those in Colombia today: an autocratic and repressive regime with a fundamentally agrarian economy, a landed elite that controlled the lands under an abusive feudal system, and a class worker who flocked to the city attracted by the growth of industries with foreign capital. At the end of World War I, the Empire sank into crisis, with a situation of food shortages and widespread hunger. It was the repression of protests ordered by the Tsar, which resulted in the deaths of hundreds of demonstrators, which led to fury and indignation, resulting in the revolution.

In Colombia, there is a repressive neoliberal regime that is based on a peasant sector exploited and cornered by large agro-industrial properties and on an impoverished, mistreated and agglutinated urban class, which must pay for access to the most basic goods and services while sinking into unemployment. and in informality. The conditions are met, there is fury and indignation. There were also many victims and evidently nobody wants there to be more.

Would the strike be capable of transforming all the fury, which now overflows in the cities and on the barricades, into a true mass movement, capable of overthrowing the neoliberal, oligarchic and exceptional regime in Colombia, which subjects the urban, rural and indigenous poor classes to rule of success for a few? It's too early to tell. What is certain is that the mobilizations created an important precedent for rethinking the present and recovering class consciousness in a country that has been alienated from its own history. The fight is not just against tax reform, it is also against the accumulation model and against the injustices that certain institutions and individuals are determined to perpetuate.

* Estefania Martinez is a doctoral candidate in geography at the University of Montreal.

Translation: Fernando Lima das Neves.

Originally published in the magazine Jacobin Latin America.

 

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