New Colombian govt must exercise caution on labor reform -business leader

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CARTAGENA — The head of Colombia’s leading business association said on Wednesday that new leftist President Gustavo Petro must be careful to ensure a potential labor reform does not lead to more informal employment.

The Petro administration, which took office on Sunday, has already proposed a tax reform bill to congress which would raise some 25 trillion pesos ($5.8 billion) in 2023 in an effort to increase revenue for anti-poverty programs.

And new Labor Minister Gloria Ines Ramirez has said she will back a bill to change some contractual stipulations and modify working hours.

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But Bruce Mac Master, the head of the Colombian Business Association (ANDI), said potential changes could increase costs for employers and spur more informal employment.

“We must be very careful, in a market like the Colombian labor market where 50% of people are informal, clearly there is a very large incentive if costs eventually rise for people to move to informality or for employers not to formally employ workers,” Mac Master said on the sidelines of ANDI’s annual conference in Cartagena.

“(The government) must think very carefully, not everything which sounds good to citizens is good for citizens,” he added.

Mac Master said he hopes for “dynamic” communication with the Petro government.

Some Petro proposals – especially a ban on new oil projects – have created uncertainty among investors.

“The rules of the game are a fundamental part of constructing confidence so that one can count on bigger investments,” Mac Master said. (Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Stephen Coates)

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