By Fabio Andrés Díaz Pabón and María Gabriela Palacio
Since late November, Colombia has seen unprecedented mass protests, the longest since 1977. These protests illustrate the awakening of a muffled civil society. Protests in Colombia are part of a Latin American “spring”. Demonstrations have, since September, swept across Haiti, Mexico, Nicaragua, Venezuela, Panama, Uruguay, Peru, Ecuador, Bolivia and Chile. But Colombia’s protests are not merely following a regional trend, nor can they be attributed to a single ideological leaning.
Who is protesting and why
Colombians are protesting against inequality, because the country has the most unequal society among the 36 Organisation for Economic Co-operation and Development (OECD) countries. In addition, recent government measures, such as cuts in taxes to wealthy investors and an increase in taxes for the middle classes, have generated a significant backlash in a failed attempt to implement “trickle-down economics”.
Though the Colombian economy has experienced resilient economic growth despite the fall in commodity prices, there is little to no redistribution taking place. The richest 1% of the population captures more than 20% of the total labour income.
Because measures recently adopted by the government probably exacerbate inequalities, peasants, student, urbanites, labour unions and indigenous groups have taken to the streets. Their grievances might differ but the persistence of inequality has led to a reduction of their tolerance to measures that maintain the status quo.
Protesters are demanding the implementation of the provisions signed in the 2016 by the Revolutionary Armed Forces of Colombia — People’s Army Colombian peace agreement. For some factions in the government, demanding the fulfilment of the promises of the Constitution and demanding peace is seen as a subversive act. Yet Colombians are not demanding a revolution; they are demanding the right to a dignifying life and the fulfilment of the promises made by the government.
In a country that is in an armed conflict and is home to one of the highest shares of internally displaced populations in the world, the dismissal of protesters’ grievances constitutes a threat to civil society and democracy. The number of assassinated social and indigenous leaders and activists illustrate these risks.
The motivation for protests relates to the deepening of inequalities and levels of precarity in terms of access to education, health and social protection and the weariness of armed conflict. The strength of the protests can be explained as the result of the transition of the Colombia society towards peace — the peace accords with paramilitaries in 2006 and guerrillas in 2016 opened different venues for political participation — and the strengthening of social movements.
The response from the government of Iván Duque has been one of denials, accusations and failed attempts to regain control over public discourse.
He took office thanks to the political backing of politicians and sectors in society who opposed the peace negotiations with guerrillas and the state reforms taking place since 2010. Once in power, Duque found himself having to comply with state policies his support base did not agree with.
But these groups do not represent the majority of the population. Because of this, Duque faces a 70% disapproval rate and only 24% approval rate, according to a recent Gallup poll. This also means he has no control over the congress, posing a dilemma to his government. Either Duque tries to clear his policies to receive the broader support of society and face the alienation of his core supporters or he loses the capacity to lead the country. Because of this, media such as The Economist have depicted Duque as a president without direction.
Given this limited political space, the government attempted a propaganda campaign that tried to cast protesters as not contributing to the development of the country and drove Duque to plan the first meeting after the national strike with the industrials and business people rather than with the protestors.
This illustrates that the government cannot see that the protests span across race, location and class. Protests have brought together diverse actors that have found in the streets a space of encounter. Social groups are refusing government measures concerning social security, pensions and labour reforms, because they would have a pervasive effect on the livelihoods of the majority of the population. This explains why protests are supported by 74% of the population.
The disconnection between self-interested elites and the rest of society is evident. The proposal for a tax break, such as allowing consumption without value-added tax for three days a year and an extended “Black Friday” as a solution to the protests illustrate how little the government understands its citizens. Initiatives such as these reflect the aloofness of Maria Antoinette; a “let them eat cake” response.
Economists have opposed other proposals tabled by the government as lacking any technical basis. Populist economic measures aim to increase the acceptability of Duque’s government but can drive inequality and further grievances. The elimination of a 2% tax for buying houses worth more than $260 000 shows that the government is not undertaking reforms to improve the livelihood of the majority of Colombians, neither are improving state revenues.
The debate can be framed about the availability of public resources and how to spend these, but data shows that the country is growing faster than any other OECD country. Nevertheless, the gains of growth are not evenly distributed, because the cost of living for the middle class is growing faster than their incomes.
The state is facing a long-standing problem of export-dependent economies. As the global economy cools down, the demand for Colombian exports has declined. In response to an imminent trade deficit, the state must increase its revenues but is afraid of taxing the wealthy — its remaining support base. This scenario takes place in a country in which informal employment is rising, and the size of industrial production is declining. The country is also going through a demographic transition, with an ageing population adding pressure to the pension system. As the population grows older, fewer contributors can sustain the social security system, and the costs for public health and pension fees increase.
One of the government proposals was to reduce employment costs and make youth employment flexible. Driving the most significant segment of the population into precariousness cannot be sound politics or economics, especially if the government is thinking about financing the pension system for future generations. Duque’s government praises the discourse of innovation and entrepreneurship, but it should consider that people in insecure employment are less likely to take risks and innovate.
Policies need to tackle the sources of inequality in Colombia and work to the benefit of the growing youth and middle class. The policy dilemma the government has is either to increase taxes to the bulk of the population, or reduce exemptions to wealthy citizens. Given the little political capital that the government has, increasing taxes for the wealthy might mean the government could run out of support. But failing to create the fiscal space that could sustain the economy and redistribute income might exacerbate inequalities in the future.
Moving towards an equal society is not only an ethical response to the grievances of diverse social groups but also a necessary condition for accelerating economic growth. Structural changes should be considered. The government should shift its attention towards innovation and industrial policies that can internalise and disseminate technological gains while driving domestic demand towards the local industry. Redistributive reforms are a prerequisite for progress because they help to close structural gaps and lead to higher levels of productivity, full use of capacities and resources, a fairer distribution of income and wealth and provide all citizens with the right to embark on the plans that they consider worthwhile.
Transition from violence
Protests remain spaces of uncertainty and crisis, but they also are spaces of representation, democracy and opportunity. Protesters bypass the structures of representation and send signals to institutions when they do not work. Furthermore, they allow governments to hear different voices and provide valuable feedback on the workings of the economy. Yet privileged actors invest energy and resources in preventing positive dissent and protecting the status quo.
Inequality and precariousness hinder economic growth and social cohesion. The mass protests, in the Colombian case, not only demonstrate how public voice emerges when violence is declining, but also how inequalities can be exposed once violence decreases, because people demand basic rights for the losers of development processes. As the country tries to leave violence behind, the nature of the conversations changed from armed conflict to citizens’ rights. Nevertheless, Colombia is a country that remains in fear of violence, the legacy of a 70-year war. The leadership of the government or its lack thereof remains central in blocking the transition away from violence.
Fabio Andrés Díaz Pabón is a researcher at the African Centre of Excellence for Inequalities Research, a research associate in the department of political and international studies at Rhodes University and a researcher at the International Institute of Social Studies in the Netherlands.
María Gabriela Palacio is an Ecuadorian political economist interested in social policy, inequality and exclusion, who works as an Assistant Professor at the Faculty of Humanities of Leiden University. She holds a PhD in Development Studies by the International Institute of Social Studies (ISS).
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A majority of Colombia’s rural areas now hold large levels of interest-bearing debt as a result of the increased popularity of bank credits. This article through interviews with debtor peasants shows that their lives have been transformed by the debts they have incurred—debt has generated an imperative to grow. In producing the necessary amount to fulfil debt, small-scale producers are pressed to follow principles of accumulation and profit maximisation that characterises the capitalist society.
The boom of bank credit and debt
Across rural Colombia, bank credit has become the major instrument for financing productive activities. This boom is relatively recent and it was marked by the 1989 National System of Agricultural Credit (Sistema Nacional de Crédito Agropecuario: SNCA), a law aimed to increase the availability of bank credit in the countryside.
In 2016, as part of my previous collaboration with rural credit institutions, I was sent to El Carmen de Chucurí (Colombia) to attest the expansion of bank credit and to document the types of creditors in the area. El Carmen de Chucurí is a municipality located in the northeast of the country that had recently been named Colombia’s most important hub for cocoa production. During my stay, I found that the rising production of cocoa had to do with specific rural development policies, but also and more generally with the necessity to produce in order to repay loans.
For debtor peasants in El Carmen de Chucurí, debt repayment is a constant source of fatigue and concern. The majority of their time and efforts is devoted to growing cocoa, a “commodity” that represents the necessary “liquidity” to fulfil their credit obligations. While the expansion of rural bank credit continues to be the subject of many studies, discussions of the nature of debt and being a debtor are neglected.
The growth-imperative debate: a research topic
In my MA research paper, I focused on the expansion of interest-bearing debt in El Carmen de Chucurí rather than on that of credit. I interviewed a number of cocoa growers – all members of a local cocoa marketing association– whose lives have been forever transformed by their relationship with debt. In order to repay the principal and the interests of the bank credits, debtor peasants have been forced to increase the quantity of their cocoa produce and its value. Put another way, debt has generated an imperative to grow.
This apparent straightforward correlation is at the core of an ongoing scholarly debate on the role of credit interests for economic growth[i] (Strunz et al., 2015). While some scholars argue for a nexus between credit interests and economic growth, the more standard narrative on money and growth seems to largely neglect this relation. Still within the first current, there are differentiated stances. One set of scholarly work is based on the assumption that there exists a natural propensity towards growth and that credit is only the conduct through which the latter materialises[ii][iii](King and Levine, 1993; Schumpeter 1983). Another body of academic literature more critically engages with this correlation and departs from the recognition that there is nothing natural or inherent in modern paths of economic growth. Instead, the imperative to growth relates to a very specific mode of production, capitalism, that was marked by “deep and painful social transformations”[iv] (Wood, 2009: 37).
Debt as a disciplining device
The research found that in the case of El Carmen de Chucurí (Colombia), the pressures to repay and remain solvent have significantly transformed the lives of peasants. They have been forced to adopt “maximizing strategies” based on a specific (capitalist) form of economic rationality, which I labelled as a transformation of their mindsets. In parallel, debtor peasants have also been pressed to intensify their work routines at the expense of their health, as part of turning debtors into “flexible and docile” to meet repayment deadlines. I called this a transformation of their bodies. Theoretically, I argued that these changes could be understood as part of the overarching disciplining effects of debt.
Debt and development trajectories
The behavioural and social changes in the lives of debtor peasants have, in turn, shaped their own trajectories of development. In producing the necessary amount to fulfil debt, they are pressed to follow principles of accumulation and profit maximisation that characterises the capitalist society. Rather than an odd case in which rural household indebtedness commingles with high productivity margins and large rates of returns, this reading is pertinent to other contexts where debt, too, constitutes a mechanism that propels capitalist logic. In an attempt to unpack the disciplining effects of debt, my research tried to point at the close ties between debt repayment and economic growth, and among this correlation and the expansion of capitalism more broadly.
[ii] King R and Levine R (1993a) Finance and Growth: Schumpeter Might Be Right. The Quarterly Journal of Economics 108(3): 717–737. DOI: 10.2307/2118406.
[iii] Schumpeter JA, Opie R and Elliott JE (1983) The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. New Brunswick, New Jersey: Transaction Publishers.
[iv] Wood E (2009) Peasants and the Market Imperative: The Origins of Capitalism. In: Akram-Lodhi AH and Kay C (eds) Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question, pp. 38-56. London: Routledge.