Colombian finance minister Alberto Carrasquilla presented his resignation to President Ivan Duque on Monday, May 3, after the head of state’s withdrawal the day before from a tax reform project contested during massive demonstrations, marked by violence.
“My staying in government would make it difficult to quickly and effectively build the necessary consensus” to carry out a new reform proposal, said in a statement Mr. Carrasquilla, who was appointed Minister of Finance and Public Credit in August 2018, when President Duque came to power.
He will be replaced by economist José Manuel Restrepo, until then Minister of Commerce, announced President Duque on Twitter. Mr. Carrasquilla warned in his statement that“In the absence of a reform (…) the macroeconomic stability of the country would be seriously compromised”.
A new text without the most contested points
The conservative president announced on Sunday the withdrawal of the project, under consideration in parliament, after five days of protest which resulted in the death of eighteen civilians and a police officer, according to the People’s Defender, a public entity protection of rights. The Ministry of Defense for its part reported 846 wounded, including 306 civilians. In addition, 431 people were arrested during the unrest which, since April 28, has punctuated some demonstrations, although most have been peaceful.
Mr. Duque had specified that he would present a new text, excluding the most contested points, including an increase in VAT on goods and services, as well as the broadening of the tax base on income.
The initial draft drew strong criticism, with the opposition, unions and even ruling party representatives believing it too affected the middle class and deeming it inappropriate as the pandemic exacerbated the economic crisis.
Latin America’s fourth-largest economy is facing its worst recession in half a century, with gross domestic product (GDP) falling 6.8% in 2020 and official unemployment of 16.8% in March. While nearly half of the working population in this country of 50 million people live in the informal economy, poverty has worsened to 42.5%.
