Editorial: Return to the track of economic growth

When we face challenging situations, the worst thing to do is to run out of ideas. Colombia’s economic cooling, which is expected to grow by only 0.6% in 2023 and between 1.6% and 1.8% in 2024, has affected the good performance of the Atlantic Economic Indicators over the past 19 months, according to different forecasts.

Thanks to the expansion of consumer credit, public investment and foreign trade, China’s economic growth rate in 2022 is 9.3%, two percentage points higher than the national growth rate (7.3%), making it the third sector with the best post-epidemic recovery in 2022. This year, the index is 0.7%, in line with the country’s economic slowdown. The perfect storm first stems from the collapse of investment caused by distrust and uncertainty about the government’s economic policies, high interest rates, a heavy tax burden, worse security conditions, and unresolved sectoral bottlenecks (especially in housing, commerce and manufacturing). A downpour from which we cannot escape.

If our main growth engines are not only slowing down, but are declining, as continues to happen in Barranquilla and other parts of the Atlantic Ocean – construction, retail and foreign trade, and industry – then common sense would deduce that the labor market has been affected. Until the previous year, job creation had maintained a positive and stable dynamic due to the strength of the local economy, but it began to slow down due to the poor performance of artistic activities and public administration. Accommodation, services, fuel and transport are the reasons why the city’s annual inflation rate (7.25%) is higher than the national average (6.9%) as of July last year.

These indicators are valuable in themselves, as they depict our economic moment, but they should also be interpreted from the perspective of social challenges, in the face of which we must be honest in order to know how to act. In the Atlantic region, seven out of ten workers are informal, women participate in the labor market at a rate 22% lower than men, we face an imbalance between the supply of education and the demand for labor, wages are stagnant, with only 54% of our incomes below the level in the 2020-2022 period, and the median wage (i.e. the wage of 50% of the population) is below the minimum level due to informality.

Even so, we remain the fourth most competitive sector in the country and rank high in services infrastructure, business dynamics, export basket diversification, environmental sustainability and research. What if we could turn challenges into opportunities for sustainable growth and increased productivity?

A few days ago, at the Atlantic Economic Outlook Conference initiated by Anif and Fedsarolo, prominent economists pointed out the directions that should be evaluated to return to the virtuous growth path that we have lost and everything that this represents.

Efraín Cepeda, President of the Inter-Atlantic Council; Tatyana Orozco, former Director of the Democratic National Party and Social Prosperity; Manuel Fernández, President of the Barranquilla Chamber of Commerce; Oriana Álvarez, Executive Director of Fundesarrollo and Iván Luzardo, Director of Planning at the University of the Caribbean, agree that the magic word “articulation” is essential to overcome the limitations of key issues related to the future of the department.

There is no doubt that high energy costs affect inflation, which are two or three times higher than in the rest of the country and in neighboring countries, which is not good for us to improve competitiveness, create local jobs or attract foreign investment. It is not up to us to overcome this burden, but we can develop differentiated growth strategies based on the needs of each business unit. In addition, policies in terms of creating quality jobs, improving human capital, bilingualism, digital skills and integrating more young people, women and immigrant population into the labor market.

In addition to strengthening air, sea, river and land connectivity, boosting the sector’s export potential are other decisive actions to return to the path of growth. It will not be easy or fast if the national government does not receive the signals of certainty and stability that the economy requires at the current turning point, where, after a soft landing, we begin to rise at a still doubtful pace. While things are getting better, let us take advantage of the soil nurtured by the positive experiences of public-private and public-private coordination, which have built trust in the Atlantic region. Accelerating the distribution of responsibilities to strengthen outstanding issues is an urgent and unfinished task to reduce poverty and inequality in Barranquilla and the municipalities.