The Colombian budget for 2012 calls for spending of Col$165.3 trillion (US$90.6bn). Of this Col$24bn will go towards foreign debt servicing.
Controversially, the increase in foreign debt payments is 14.7%, well above the overall 12% increase in the budget. Other controversial changes are a mere 5% increase in defence spending and a 4% increase in the judicial budget.
The aim of all these changes is to hold the fiscal deficit at 3.5% of GDP.
The main macroeconomic assumptions include real annual GDP growth of 5% in 2012, with annual inflation of 3%. The government expects its current running costs to rise by 9.5%, but its investment budget will rise by just 4%.
The government is budgeting on fiscal revenues of Col$86.7 trillion; based on profits of Col$6.4 trillion from public sector companies; Col$5.2 trillion from privatisations and Col$45bn from borrowing.
On 13 September the Colombian senate’s plenary approved a new consumer protection act, promoted by Simón Gaviria, the president of the chamber of representatives, which now goes to President Juan Manuel Santos for promulgation. Gaviria, a long standing consumer rights’ advocate, hailed the act as making Colombia “a pioneer” in consumer rights’ legislation in the region. While the principal aim of the new legislation is to protect consumers’ rights, it will have an auxiliary effect on the local black market. Any consumer seeking recourse to the act will need proof of purchase to file a complaint or make a claim.
The act states that all products must carry a warranty. New products have an automatic and mandatory warranty of one year, unless otherwise and clearly stated by the manufacturer or retailer. Second-hand goods can be traded without a warranty, but this must be clearly stated at the time of transaction; otherwise, second-hand goods will carry a default warranty of three months.
Services companies such as parking lots will be made responsible for damages to goods in their care. Other providers will have to reimburse consumers for the cost of a poorly delivered service. Furthermore and where applicable, the service provider will have to foot the bill for any added expenses incurred by the consumer because of a failure to provide a service, including in relation to the consumer’s health and personal security.
The superintendence of industry and commerce (SIC) will be the government office in charge of enforcing the act. To cope with increased demand, the SIC will double the current number (100) of civil servants working on consumer defence. The maximum penalty for violating the act has also been doubled from 1,000 minimum current salaries to 2,000.
Exports: On 7 September, the national statistics department (Dane) reported that despite a slowing global economy and a weak dollar, Colombia’s exports increased by 55% year-on-year in July. The increase was driven by a 44% increase in traditional products exports. The Dane report found that exports in July where US$ 4.89bn compared to the US$ 3.15bn recorded in the same month last year. Traditional exports were US$ 3.48bn, a 65.9% year-on-year increase from last year’s US$ 2.1bn. Encouragingly non-traditional exports also experienced a substantial boost, accounting for US$1.4bn – a 33.2% increase from 2010’s US$ 1.05 bn.
