Petro, who is ignorant and if he learned anything about economics he forgot it years ago, and who, on the other hand, with each passing day shows more signs of an ideological fanaticism typical of the extreme left, dropped three pearls this week, each one more pernicious than the other.
The first, accused the JP Morgan bank of making the government a “premeditated financial corner” and said that “it is looking for ways to lower our rating at any cost and it is looking for it because of my position regarding (sic) Palestine.” JP Morgan is the largest bank in the United States and one of the most important in the world, but it is not a risk rating agency and, consequently, cannot lower the rating of our country.
The bank has limited itself to making some warnings, in which all serious economists here and abroad agree, about the risks of increasing the fiscal deficit and public debt and the dangers of the much applauded and also very harmful project to reform the General System of Participations. Petro’s response is not only lying but reflects his prejudices about banking and Jews and is deeply anti-Semitic. And it upsets international banks, not just JP Morgan.
Follow the WhatsApp channel
Opinion
The proposal that Colombia withdraw from the International Center for Settlement of Investment Disputes (ICSID) is the second. The ICSID is an independent institution whose function is to resolve conflicts between international investors and states through mediation, conciliation and arbitration. Petro made the proposal after an ICSID arbitration ruling established that Colombia must pay a considerable sum of money to Spain’s Telefónica.
It must be remembered that, however, the majority of international rulings have been favorable to the country and that Colombia has recently won several very large arbitrations, among them the one related to the .co domain, the Meritage building in Antioquia or the gold mining in the Santurbán páramo, to name just a few. If the outburst of withdrawing the country from ICSID were to materialize, the consequences would be very serious.
The fall in foreign investment, which has already seen seven months of consecutive declines in 2024, about USD$2.7 billion less compared to 2023, would be brutal. And it is also foreseeable that some of the capital already invested will decide to leave the country. Capital flight would be unavoidable. No foreign company is willing to invest without an international arbitration mechanism that provides guarantees of independent and agile justice. Without these capitals, those that would stop arriving and those that would leave, the economy would slow down even more, unemployment would grow and poverty would increase.
In line with the above, the third nonsense is to renegotiate the free trade agreements with the United States and the European Union, in particular the clauses that establish the possibility for investors to go to international arbitration courts. According to Petro, these articles in the treaties are “harmful to national sovereignty” and allowing disputes between states and companies to be resolved by international arbitration instead of by Colombian justice is “a stab in the back.”
Curious position of someone who has done nothing other than take advantage, even distorting it, of a ruling of the Inter-American Court of Human Rights, at the time contrary not only to Colombian jurisprudence but also to our Constitution. But Petro’s position is also absurd and contradictory. International treaties come into force only after they are approved by Congress and their constitutionality examined and endorsed by the Constitutional Court. The clauses on dispute resolution through international arbitration are not contrary to either the Constitution or sovereignty and are typical of the contemporary world. Without them, I repeat, there is no foreign investment or international trade. To top it all off, the idea of renegotiating free trade agreements, which Petro raised from the beginning of his government but which, fortunately, he had left aside, only creates risks for the country. A renegotiation can only go wrong and the result would be less favorable conditions for Colombia. And with Trump, worse.
Petro is ignorant, foolish and irresponsible. At a time when the economy is barely growing, the risks of a fiscal and public debt crisis are serious, and confidence needs to be generated, his statements only sow more uncertainty. After hard times…
Here more Opinion Columns
The opinions published here are the responsibility of their author.
2024-11-24 05:55:00
#cotudos.. #Minute30
What potential impacts could Colombia’s withdrawal from the ICSID have on future foreign investment and economic growth in the country?
**Interview with Economic Expert Dr. Alejandro Romero on President Petro’s Recent Statements**
**Interviewer:** Welcome, Dr. Romero. Thank you for joining us today. This week, President Petro made several controversial statements regarding the financial landscape in Colombia. Let’s start with his comments about JP Morgan. He accused the bank of trying to corner the government financially. What are your thoughts on this accusation?
**Dr. Romero:** Thank you for having me. President Petro’s comments are quite telling of his approach to economics. JP Morgan, while a significant player in international finance, is not a credit rating agency; it cannot lower a country’s rating unilaterally. Instead, JP Morgan has been voicing concerns about Colombia’s increasing fiscal deficit and public debt, which are legitimate issues that warrant serious attention. Such statements from Petro not only miss the mark but also may exacerbate tensions with international financial institutions, which are crucial for investment in Colombia.
**Interviewer:** Speaking of investment, Petro also proposed withdrawing Colombia from the International Center for Settlement of Investment Disputes (ICSID). What implications could this move have for foreign investment?
**Dr. Romero:** This proposal could be detrimental to Colombia’s investment climate. The ICSID is vital for mediating disputes between international investors and the Colombian state. By withdrawing, the government would undermine investor confidence. We’ve already seen a decline in foreign investment this year, down by approximately USD 2.7 billion compared to last year. If investors perceive Colombia as unstable or untrustworthy, we could see significant capital flight and a slowdown in economic growth, which would increase unemployment and poverty levels.
**Interviewer:** Petro mentioned renegotiating free trade agreements with a focus on international arbitration clauses. How do you view this position?
**Dr. Romero:** This is another troubling indication of a misunderstanding of the global economic landscape. Free trade agreements often include mechanisms for dispute resolution to protect both investors and states. If Colombia renegotiates these clauses, we risk isolating ourselves from international trade dynamics. These agreements have historically brought significant advantages to Colombia. The call for renegotiation based on perceived threats to national sovereignty may lead to a loss of critical partnerships and further deter foreign investment.
**Interviewer:** Thank you, Dr. Romero, for your insights on these pressing issues. President Petro’s comments undoubtedly open up discussions that are crucial for the future of Colombia’s economy.
**Dr. Romero:** Thank you for having me. It’s vital to have these conversations as they affect the livelihoods of many Colombians.