Bruce Mac Master warns about recession risks due to tax reforms in Colombia.

Bruce Mac Master, president of the National Association of Entrepreneurs of Colombia (ANDI), is currently in a week of intense activity, preparing for the Colombian Business Congress that will take place in Medellín. With experience spanning both the public and private sectors, Mac Master has been a critical observer of the country's economic situation, especially in the context of the tax reforms proposed in recent years. In a recent interview, he expressed concern about how these reforms could lead Colombia into a recession, a warning that has resonated among business sectors and the public. Mac Master’s analysis is based on mathematical models that have evaluated the impact of the tax reforms implemented in 2021 and 2022. According to his calculations, these reforms have had detrimental effects, particularly on investment, resulting in the country accumulating two years without growth in this area. "Colombia has seen two years without investment, making it almost impossible for the economy to grow," he stated, highlighting that the increase in the general budget of the nation and the growth of bureaucracy have been disproportionate compared to productive investment. According to Mac Master, the task of Congress is crucial at this moment. It must debate the budget for 2025, which presents a deficit that could force the government to seek a new tax reform to cover a gap of 12 trillion pesos. "Congress seems unclear that it needs to have this debate now," he emphasized, underscoring the need to make decisions that avoid greater economic and financial uncertainty. Referring to the government's strategy of increasing public spending, Mac Master warned that if projected spending levels are maintained, Colombia could face a severe recession. "Colombia's economy cannot meet the president's spending ambitions," he reiterated, alluding to the risk of a severe recession if adequate measures are not taken to control spending and promote investment. In his analysis, Mac Master did not limit himself to criticizing the tax reforms. He also referred to the "credit agreement" between the government and the banking sector, highlighting that such initiatives are necessary but must be well-managed to avoid increasing uncertainty in the sector. "You cannot keep dodging people's fears every day if you want them to invest," he said, emphasizing the importance of generating trust in the country's investment climate. Mac Master expressed concern about the impact that the lack of clear and swift decisions has had on key sectors such as energy and health. He assured that in the energy sector, where there has already been more than five years of delays in decision-making, the lack of clarity is undermining investment. The decline in investment in health was also a highlighted point, where he mentioned that uncertainty regarding financing and state payments has left investors reluctant to commit capital. Despite his critical tone, Mac Master also acknowledged some positive aspects of the current government, such as the political courage in managing fuel prices. However, he emphasized that a more coherent and strategic approach is required to address the investment crisis and economic growth. "Any reform must meet two general principles: achieve better health care immediately and be sustainable in the medium and long term fiscally," he stated. At the end of the conversation, Mac Master made it clear that dialogue with the government is fundamental, and he hopes that President Gustavo Petro will attend the Colombian Business Congress. "Hopefully, yes, so that there can be a dialogue," he said, alluding to the need to discuss the structural issues of the country, such as economic and social development, and overcoming poverty. At a time when the country faces significant economic challenges, Mac Master’s words serve as a call to action for leaders and legislators, urging them to prioritize the economic and social well-being of Colombians over political struggles. The need for a collaborative and constructive approach is more urgent than ever, and the discussion in Medellín could be a first step towards a pact for the future of the Colombian economy.