OECD supported Colombia's trade policy

The Ministry of Commerce, Industry and Tourism (Mincit) announced that the first sectoral review process was officially closed following Colombia's accession to the Organization for Economic Cooperation and Development (OECD). The news came a few days after the country entered the organization two years after the country entered the organization.

In this way, the portfolio noted that the country received strong support from the Committee on Trade in view of the progress made in its trade policy. According to Mincit, this action points the way for other sectors that will have to submit reports in the coming months.

He also explained that with the announcement, Colombia's trade policy is positioned at the same level as the other members of the Organization, having achieved the support of all members of the Committee in the face of the progress achieved.

Thus, one of the highlights by the Chair of the Committee was “the seriousness with which the country has been involved in this review process and the important reforms that have been adopted in the Government of President Duque”.

It is worth mentioning that after the completion of the OECD review process, the foreign trade sector becomes the first to successfully pass the “post-access” phase. This means that today it can be conceived as a benchmark for other sectors that are currently undergoing processes of strengthening and modernizing their regulatory frameworks and institutional capacities.

It should be recalled that Colombia became the thirty-seventh member country of the OECD on April 28, 2020, having been invited to start its accession process in May 2015.

Jens Arnold, an OECD economist specializing in Latin America and knowledgeable about the Colombian case, said in an interview with Blu Radio that the country's fiscal response was “timely” in the face of the current situation, but assured that there are effects on Colombians.

“The pandemic had a very unfair economic effect, very regressive because it hit the income, the jobs of people with the lowest income, for example, what is the distribution of the fall in income during 2020 and it is concentrated mainly on those with lower incomes, 40% of the income distribution (...) That is why today there is a need to create a more efficient social protection system with greater coverage.”

The report, according to the economist interviewed by the station, reveals that Colombia must implement a reform of the pension system:

“Today, less than 20% of the vulnerable population in Colombia is covered by social transfers, discounting temporary benefits, in Latin America they are on average 40%. It is important to move towards universal coverage with transfers against poverty both in the elderly and earlier and with benefits that allow the elimination of poverty in Colombia in the medium term, that is the main message of our report.”

The OECD defends the different ideas recently put forward and hopes that presidential candidates will include reform of the pension system in their government plans.

“Colombia cannot continue with pension coverage for only 25% of the population, Colombia cannot continue with these high rates of poverty and inequality, now is the time to debate what can be done to reduce this poverty and inequality more permanently and this should be at the center of the debate”, said the economist on the radio station.

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