Former president and Democratic Center leader, Álvaro Uribe, has expressed his disagreement on social media regarding the recent pension reform established by Gustavo Petro’s government. Uribe believes that the proposal will lead to “more money to spend, but at the cost of greater future indebtedness.” He identifies three problems with the project, including the equivalent support to 223,000 pesos to vulnerable elderly individuals like tripling the annual budget of the item. Additionally, there may be fewer contributors to pay those who receive a pension, and the high subsidy paid in Colpensiones is problematic because the contributions do not compensate for the value of the pension.
In response to criticism, President Gustavo Petro tweeted on April 9, stating that Uribe made “two serious mistakes.” Petro believes that from the contributions paid by affiliates, they will make government spending that’ll be different from paying pensions to affiliates and believes that in 40 years, they will maintain a productive economy. The president also dismissed the criticism of the pension deficit that could be aggravated by the reduction in the number of people born in the country, saying that demographic change is mitigated by increasing productivity and achieving more contributors to overcome poverty. He defends the project that reached Congress and says that the pension system they propose will be sustainable in future decades only if the Colombian economic model changes to a fairer and more productive one.
Government
By:
April 9, 2023 2:30 PM m.
The former president and leader of the Democratic Center, Álvaro Uribe, expressed his disagreement on social networks about the pension reform recently established by the government of Gustavo Petro.
(Read: Reforms would make labor one of the most expensive in the region).
Uribe says that with this proposal there will be “more money to spend, but at the cost of greater future indebtedness.” According to him, the project has three problems. In the first place, he considers that a support of 223,000 pesos to the vulnerable elderly would be equivalent to multiplying by three the annual budget of the item. Besides, there may be fewer contributors to pay those who receive a pension.
Along with this, he sees the high subsidy paid in Colpensiones as problematic because the contributions do not compensate for the value of the pension.
Faced with criticism, President Gustavo Petro was pronounced this Sunday, April 9 through Twitter, assuring that Uribe makes “two serious mistakes.” “To think that from the contributions paid by affiliates we are going to make government spending that is different from paying pensions to affiliates and to think that in 40 years we are going to maintain an unproductive economy“, assured the president.
(In addition: Pension reform would remove 70% of the current resources from the AFPs).
Likewise, the president referred to the criticism of the pension deficit that, according to Uribe, it could be aggravated by the reduction in the number of people born in the country.
“The critics of the reform always say that because the population will be older in several decades, the pension debt will explode. It is not true: demographic change is mitigated by increasing productivity and achieving more contributors to overcome povertyPetro added.
Finally, the leader of the Historical Pact defended the project that reached Congress. “The pension system that we propose will be sustainable in future decades if the Colombian economic model changes to a fairer and more productive one,” he concluded.
(See: Expert alerts on the March reform package).
BRIEFCASE
In conclusion, the proposed pension reform in Colombia has sparked controversy and disagreement among politicians and citizens alike. While former president Álvaro Uribe expressed his concerns about the potential negative impact of the proposal, President Gustavo Petro defended the government’s plan, citing the need for a fair and sustainable pension system in the future. The debate highlights the complexity of implementing effective pension reforms in any country and the importance of finding a balance between financial sustainability and social responsibility. Only time will tell how the current proposal will unfold, and whether it will achieve its intended goals.