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COLOMBIA: An Introduction to Colombia

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Colombia, and its labour market, is no stranger to the main problem faced by Latin American economies - labour informality. In Colombia's case, informality registers at around 60%, which seriously affects the sustainability of the pension system and has resulted in a decade-long structural and financial assistance crisis within the health system. This is aggravated by the pressure that the two million Venezuelans who are currently seeking refuge in Colombia are exerting through a range of labour activities, which, in the vast majority of cases, occur in an informal manner.

We need to urgently begin changing this reality, which seems very difficult to achieve if greater financial burdens continue to be created for formal employment and if the debate regarding new, non-conventional employability is postponed, as occurs in the case of application-based employers such as UBER and RAPPI, among many others. These applications have begun to appear and grow without the benefit of classical, applicable legislation to regulate them. We believe that the least favourable way to administer this new reality is denial or prohibition of this trend, as has recently occurred in Argentina.

In Colombia, the rulings of the Constitutional Court have significantly contributed to formal contracting becoming an endangered species, as a result of continuing to adapt protectionist strategies favouring the employee, which in our opinion has harmful effects in terms of the competitiveness and productivity of individuals and companies alike. We need not go far to find an example: PDVSA, an emblematic company in Venezuela, had 33,000 workers and was one of the most important and productive companies in Latin America 20 years ago. Today it employs 140,000 workers dedicated to a range of diverse activities other than producing oil, with disastrous results. 

In Colombia we continue to operate in an expensive and extremely regulated system that is no longer protected by traditional labour law, but is now governed by a new labour relations employer: constitutional law. As long as this reality continues, possibilities of change for the better are really very few.