May 8, 2020 / 9:29 PM / 24 days ago

Colombia's easing of lockdown could get 70% of economy back to work: minister

BOGOTA (Reuters) - New exceptions to Colombia’s two-month coronavirus quarantine will revive between 60% and 70% of economic activity, Commerce Minister Jose Manuel Restrepo said on Friday, though a return to normality will take until the end of the year.

FILE PHOTO: Colombia's Minister of Commerce, Industry and Tourism, Jose Manuel Restrepo, speaks during an interview with Reuters in Bogota, Colombia January 30, 2020. REUTERS/Luisa Gonzalez

The country’s government this week extended its lockdown until May 25, but will allow new sectors including auto repairs, wholesale furniture, laundries and book shops to gradually re-open from Monday. Many will operate via deliveries.

Manufacturing and construction have already been allowed to apply to re-open.

“We will have 60% to 70% of gross domestic product functioning when all those (additional) businesses reactivate,” Restrepo told Reuters in a phone interview. “Still pending is tourism, some retail and some service sectors.”

Business leaders have complained the re-opening permitting process is too slow.

“There may be situations where a bit more agility is required, but we must be careful this doesn’t mean in any way the non-compliance with bio-security protocols,” Restrepo said.

About 21,000 manufacturing businesses, some 35% of the sector, have requested permission to re-open, Restrepo said. About half have so far been approved.

Re-opening is key to avoiding further damage to Latin America’s fourth-largest economy, the minister said. The finance ministry has predicted Colombia’s economy will contract by some 5.5% this year.

“It must happen with all prudence and progressiveness, but it is indispensable that we do it, otherwise we will end up in a pandemic of hunger, of poverty and destruction of employment that would be more serious,” he said.

The government is preparing an arsenal of measures to increase aid for businesses under a second state of emergency declared this week, Restrepo said.

The measures, which will be announced in the coming weeks, will include aid for the retail, commerce and tourism sectors, rent reduction, credit guarantees, cuts in social security payments by employers and bankruptcy help, Restrepo said.

The government said on Wednesday it will subsidize workers’ pay to the tune of 40% of the minimum wage for companies whose turnover has fallen by at least 20% due to the outbreak and delay payment of income tax by businesses.

“In this new emergency, the second one, the center of worry is the business sector,” the minister said. “The most important emphasis is the future of businesses.”

Spending on the health sector, social programs and business aid reached between 16 trillion and 20 trillion pesos ($4 billion to $5 billion) during the first state of emergency, Restrepo said.

Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Alistair Bell

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