economy and politics

The proposal of the Decentralization Mission to reform royalties

Decentralization Mission Report

On March 31, the work of a group of experts that was convened by the National Government ended and that since 2022 has been working on the development of a package of proposals to generate strategies that promote development in the regionstaking into account that Colombia is a diverse country with economic characteristics and dynamics that change according to the territories.

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This is the Decentralization Mission, a team in which names such as Jaime Bonet, Darío Indalecio Restrepo and Héctor Riveros stand out, among others, who have had the support of National Planning and spokespersons for Asocapitales and the National Federation of Departments.

For Darío Indalecio Restrepo, director of the Mission, much of his work focuses on the need to give greater autonomy to the regions, taking into account that “We must strengthen the spending and collection capacity in the departments, that is something we all agree on.”

“Making it clear that we are not talking about federalism, this is a level of centralism where territorial entities must be able to participate much more in the national wealth, but starting from being clear about what that money will be used for,” Restrepo explained.

For his part, Jaime Bonet, who is also part of this group of experts, highlights that Colombia is an unequal country and that one of those inequalities is regional, for this reason, “The mission's proposals are aimed at correcting these regional inequalities, in such a way as to improve the living conditions of the inhabitants of traditionally forgotten territories and where the presence of the State is reduced.”

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In a preliminary document presented to the Congress of the Republic and the National Government, the Decentralization Mission delivered seven proposals that condense the changes that for them must be carried out in the management of the regions, in order to strengthen their capacities and avoid inequities.

The first of them is to move from the current categorization (which are measured by numbers) to having classifications such as Large Cities, Territorial nodes, Intermediate, Urban centers, Primary vocation (highly agricultural), environmental prevalence and high ethnic density.

This in order to improve the targeting of public policies, differentiated technical assistance from the central Government and the assumption of powers of each of these territories, making it clear that “It will be up to the departmental assemblies and the municipal and district councils to regulate the exercise of functions and services, as well as the departmental, municipal and district powers, functions or services.”

For the Mission's experts, Colombia should focus on all populations that are not part of the “extended golden triangle” (Bogotá, Cali and Medellín, Barranquilla and Bucaramanga) to areas such as the Pacific, the Amazon, the Orinoquía and the rural world avoiding falling into scenarios in which development promotes the opening of social gaps.

Secondly, the need to reform the Territorial Planning Law (1454 of 2011) is raised, in order to deepen decentralization and territorial autonomy in Colombia; also strengthen territorial associativity and metropolitan areas and, to complement, define the general framework of competencies of municipalities and departments.

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Decentralization Mission Report

Courtesy – DNP

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A structural change to General Participation System (SGP)is the third recommendation, highlighting that the current model of resource distribution through this tool penalizes territories with lower capacities by assigning them fewer resources, which is why a new distribution model must be established.

They indicated that 31% must be established as the minimum level of the GSP with respect to the Current Income of the Nation, recompose and separate this system into 2 bags, one sectoral and the other territorial, and take into account the territorial segmentation that they proposed, so as not to leave outside the ethnic territories and promote those of environmental prevalence.

“The proposal to include fiscal equalization criteria would allow greater equity in the distribution of resources and more autonomy in the execution of spending. In per capita terms, the most lagging municipalities would have greater funds without tying their use to certain sectors, which will allow them to meet the demands of their population.”said Professor Jaime Bonet.

To accompany the reform of the participation system, The Mission also proposes making changes to the distribution of royaltiesstarting with the suppression of the Collegiate Administration and Decision Bodies (Ocad) to replace them with the direct management of the territorial entities and merge the four allocations focused on the environment within the General Royalties System (SGR) to distribute them directly to all entities territorial.

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In this sense, it suggests that it is necessary to promote autonomous management of resources by territorial entities, redefine the allocation of regional investment, decentralize the allocation of science, technology and innovation and adjust the approach and form of distribution of local investment, unifying the distribution systems.

Finally, the Mission highlights that a subnational fiscal rule must be consolidated, unifying the current regulatory framework, as is currently the case with the Fiscal Rule, avoiding the atomization of indicators and the different methodological approaches and actors in the definition and monitoring spending and debt.

This team has already presented its recommendations to the Government, in a Council of Ministers and to the Congress of the Republic, from where several recommendations were received that will become part of the debate that will revolve around the issue.

Economy

Economy.

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(Read more: Decentralization Mission proposes royalty reform and greater autonomy for the regions)

Proposals that the Government is analyzing

Portafolio spoke with the director of National Planning, Alexander López, about this report that they received in the Government and this official added that “The proposals are the starting point of a discussion that must be held in settings such as Congress, regional dialogues, public hearings, among others, so there is still an important way to go.”

He also highlighted that the final results will be presented in the coming months and it will be up to the National Government and/or Congress to review, articulate or adjust the final proposals and define which of them, in what way and with what priority they will enter the public agenda to materialize them.

DANIEL HERNÁNDEZ NARANJO
Briefcase

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