A 30-day decree signed by the full cabinet lets President Abelardo de la Espriella issue economic and tax rules without congressional approval to speed Colombia’s earthquake response.
Preliminary estimates put damage from the Aug. 10 quake at at least 30 trillion pesos, or $9.8 billion—about 1.5% of GDP—after it killed 314 people, injured 4,430 and left 262 missing.
The emergency powers allow budget reallocations, public-credit operations, special funds, royalty-fund use and temporary tax, customs and foreign-exchange relief to finance relief and reconstruction.
The move piles pressure on one of Latin America’s weakest fiscal outlooks: Finance Minister Miguel Gómez sees this year’s deficit near 8% of GDP versus a 5.1% prior forecast, even as he vows no tax increases.
For De la Espriella, who took office less than a week ago promising to shrink the state by 40%, rebuilding hospitals, schools, roads and homes is an immediate test of that austerity agenda.
Can Colombia's new president rebuild after a $9.8 billion earthquake without raising taxes, or will the soaring deficit crush his economic promises?
Will the emergency decree simply fund disaster relief, or provide a backdoor to radically restructure Colombia’s fragile economy without congressional oversight?
How will severe security threats and crippled infrastructure in western Colombia impact the delivery of critical international aid and global coffee exports?