Since last year, the Colombian oil industry has been bedeviled
by the twin problems of plummeting global oil prices and dwindling national oil
reserves. It’s time to add labor issues to that list, as the USO, the largest
union in the Colombian oil industry, is preparing
to go on an indefinite strike. USO president Edwin Gonzalez told Reuters that
the USO is protesting that massive layoffs of oil sector workers, adding that the
labor union is ready and willing to negotiate with the government and halt the strike.
The Colombian Labor Minister, Luis Eduardo Garzón, countered
by saying that if the protesters’ goal is to improve the employment situation
in the country, going on strike will only cause greater harm.
Also on Tuesday, Colombian state oil company Ecopetrol announced
that its net profits fell 42.7% in 2014, due to the collapse in global oil
prices, lower sales volumes, increased costs, and attacks against oil
infrastructure. Though this announcement did not come as a surprise, the fall
in profits creates a gaping hole in the Colombian government’s budget.
Colombian Finance Minister Mauricio Cardenas however said
that through higher taxes, cutting expenses, and a higher national debt, the
country would be able to weather the period of depressed oil prices. He focused
in particular on that last tool, raising debt levels, explaining that the
devaluation of the Colombian peso has allowed the country to take on more debt,
and has stimulated domestic industries for which a weaker peso is a great help.
In a separate interview, Minister Cardenas expressed
optimism regarding the country’s GDP growth for 2015, predicting that Colombia’s
economy would grow by more than 4%, even though most analysts have pegged it at
less than 3%.
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