On April 6, the Atlantic Council organized a video conference to discuss the “Economic and Social Impact of COVID-19 in Colombia”. Present at the event were: Andrés Cadena, McKinsey & Company; Juan Carlos Pinzón, Ambassador of Colombia to the United States; Rosario Córdoba, Private Competitiveness Council; Luis Fernando Mejía, Fedesarrollo; Catalina Escobar Restrepo, Fundación Juanfe; Alejandro Mesa, Baker Mckenzie, and Jason Marczak, Atlantic Council.
Today it is difficult to have an official figure, due to the rapid spread of the virus, and lack of confidence in the data given by some countries, there are already a million cases. Colombia faces not only the challenge of COVID-19 and protecting its citizens, but also reactivating the national economy. The panelist discussed possible plans after the crisis, as well as the role that the private sector should play with the government and civil society to counter the pandemic.\
For Ambassador Pinzón, there should not be a dilemma between health and economy; they must be handled simultaneously. The health system must be strengthened primarily, intensive and intermediate care; The front line army is doctors and health personnel, we must protect them. All the social support network that is in charge of the government must function without errors, credit aid, payment flow, adapt the economy to the services that this crisis requires. In terms of supply shock, we are living the closest thing to war; that is why today, we must think about the plans to reactivate the economy once we overcome the pandemic.
Andrés Cadena also states that there should be no such dichotomy. The challenge must be: how do we save lives and maintain social welfare at the same time? Pandemics have an impact on humans daily, we are going to produce much less and demand much less. This creates pressure in 4 aspects: Individuals or ordinary citizens, companies, the financial system, and governments. So, since there is no vaccine, the different isolation systems must be adapted because it is the best way to act to slow down the rate of infection.
Alejandro Mesa commented on the collapse of the oil price; this means an immediate devaluation of the Colombian peso. The price war between Russia and Saudi Arabia means that today there are around 25 million barrels that are not being consumed, and storage capacity is reaching its maximum. The oil industry is being directly affected by the costs of extracting the crude and sales are plummeting, Colombian crude has traded for US$ 10, and the government is making its estimates with a price higher than US$ 50.
Luis Fernando Mejía commented on the importance of having public policy objectives that allow avoiding an excessive expansion of the coronavirus. Colombia has more than 60% of the population in the informal economy; the indicators also reflect that at least 67% of Colombians are below the poverty line, which is the vulnerability band. This means that these people are already being affected by cuts in wages and personnel. Although the Colombian government has different social aid mechanisms, there are more than 10 million households that the state must attend to, and the capacity is for 7 million. This quarantine is unsustainable in the long term; it can generate income problems and massive bankruptcies of companies.
Rosario Córdoba believes that the economy should gradually open, for that it is necessary to create protocols that protect workers. Measures such as the use of compulsory masks and gloves, the distance between individuals. These actions help flatten the contagion curve. Protecting the company is crucial to protect the workers. Liquidity must be guaranteed so that the companies do not remove the workers; otherwise, this creates a situation of uncontrollable vulnerability.
Catalina Escobar spoke about the cost of mental health. Almost 80% of rapes occur in homes, today for reasons of the pandemic, we are confined to our homes; this increases the risks of the victims. The women’s counseling hotline risen from 397 last year to 710 calls. The perpetrators are in their homes with the victims 24/7, difficult for those affected to be able to report and, at the same time, know real numbers about what is happening.
Colombia seems to be doomed to COVID-19, today it has 36 cases for every million inhabitants according to Google metrics. Health experts seem to work hand in hand with the government and civil society. This is how all Latin America should act, due to the limitations we have, we cannot relax or underestimate efforts to stop the pandemic.