sábado, 18 de diciembre de 2010

Colombian mining policy: spread your legs, relax and enjoy

A rough and rude title, but anyone who has read Introduction to the Colombian Economy by Alvaro Tirado Mejía, could hardly disagree, or would at least be wanting to sugarcoat reality. Two examples: the history of the Colombian Mining Company and Francisco Antonio Zea (they are very tied toghether). The other, I have to quote it as friend told me years ago: Two companies, A (private entrepreneurship) and B (state ownership), decided to start a partnership to for a promising business. To determine if the projections provided were viable and profitable enough, the private company went all the way and so they decided to get to work. The "A" company has about 6,000 employees. and the "B" company has about 50. Revenues from each one of every sale were divided in half and half strictly. Costs were too. Although the projections of A were not met, investment in infrastructure was so massive that there were no choice but to move forward. After a few years of operation, B was on the verge of bankruptcy, with huge losses and had to be liquidated. A, were as good as ever. How could that be possible?

Any acute reader will have noticed that I was telling (secondhand) the story of Intercor (A) and Carbocol (B), which despite being equally in all, ended with the state company bearing all rthe losses of the of the Cerrejon business. Now it's just history, but over two hundred years, the story remains the same: a timid and weak government that only knows how to say yes to predatory companies with true pirate vocation. On the other hand, how is it possible that in two hundred years it has not changed the mining business way? Why it did not change in two hundred years what we like to name corporate culture?

Not having to be progressive to be interested in this, but anyone who feels this like a personal injury, I know that the interests of the nation have been damaged in a not mensurable way and it is still hurting! Cristina de la Torre puts the nail on the head, in his column in El Espectador as she denounced Ingeominas, and in general how the previous administration refused to exercise control over mining operators who exploit our mines, something truly unprecedented and that could be considered rightfully as treason. This is not to kick to the investing companies out, but to simply state that they are unfair to us. They have to comply to what they have promised before. None of pacta sunt servanda sic rentibus sic other technicalities. It seems they are not satisfied with such tremendous advantages (tax stability agreements that that the majority of entrepreneurs in the country do not have), must be also not accountable to her partner, the Colombian State. What a shame!

Colombia's mining policy has not changed in two hundred years: it is simply spread her legs, relax and enjoy (?).
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