Excerpt
Colombia’s transformation from pariah state in the eyes of investors to dynamic emerging market has led to a massive influx of U.S. dollars. But the flood of greenbacks is drowning some of the nation’s most important producers.
Until the Bogota government took action this month, the Colombian peso had gained nearly 13 percent against the American dollar this year and ranked as the world’s most revalued currency.
That’s good news for Colombians traveling to Disney World or for those purchasing imported refrigerators and lawn mowers, which are now cheaper. But it’s a blow to many of the country’s exporters.
True, world commodity prices remain high thus Colombia’s oil, mineral and coffee exporters are holding their own. But the strong peso makes Colombian flowers, foodstuffs, garments and other textiles more expensive abroad and less competitive. As their profits tumble, these industries are laying off thousands of workers.
“For most Colombians, the revalued peso is a bad thing,” said Mauricio Cardenas, a former economic development minister who is now a senior fellow at the Brookings Institution in Washington. “Your average Colombian works in manufacturing or agriculture and these sectors have been hit very hard. The strong peso keeps unemployment high.”
The jobless rate is 12 percent while 34 percent of working Colombians labor in the informal sector and are considered "underemployed." In a letter to government officials this month, the country’s main business associations warned that the revaluation of the peso “jeopardizes the Colombian economy’s positive outlook.”
The peso’s rally is the result of economic troubles in the United States, fiscal policies in China and an oil and mining boom at home.
Bold-blue emphasis mine
POLITICAL NOTE: This is what the top 2% of American income do with their wealth. They put their money where the profit is, which CAN mean NOT in the USA. They do NOT deserve a tax cut.
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