Colombian President Gustavo Petro on Monday decreed a 23.7% increase in the country’s minimum wage for 2026, the largest real rise in at least two decades, bypassing negotiations with unions and business groups and sparking warnings from economists, bankers and employers over inflation, job losses and rising informality.

The decree lifts the monthly minimum wage to 1.75 million pesos (U.S$470), or close to 2 million pesos including transport subsidies, and will apply to roughly 2.5 million workers when it takes effect next year. Petro said the measure aims to reduce inequality and move Colombia toward a “living minimum wage” that allows workers to “live better.”

But business associations, financial analysts and opposition lawmakers said the scale of the increase — far above inflation and productivity trends — risks destabilising the labour market and the broader economy.

According to calculations based on official data, with inflation expected to close 2025 at around 5.3% and labour productivity growth estimated at 0.9%, a technically grounded adjustment would have been close to 6.2%. The gap between that benchmark and the decreed hike exceeds 17 percentage points, the largest deviation on record.

Informality and job losses

Colombia’s minimum wage plays an outsized role in the economy, serving not only as the legal wage floor but also as a reference for pensions, social security contributions and public-sector pay.

Banking association Asobancaria warned that increases far above productivity can generate unintended effects. Citing data from the national statistics agency DANE, the group noted that 49% of employed Colombians — about 11.4 million people — earn less than the minimum wage, mostly in the informal economy, while only 10% earn exactly the minimum wage. Former director of DANE and economist Juan Daniel Oviedo believes that an increase that only benefits one-out-of-ten workers will stump job creation. “A minimum wage of 2 million pesos will make us move like turtles when it comes to creating formal jobs  — something we need to structurally address poverty in Colombia.”

Retail association FENALCO described the decision as “populist” and said the talks had been a “charade.” Its president, Jaime Alberto Cabal, said the process ignored technical, economic and productivity variables and would hit small businesses hardest.

Lawmakers also raised concerns about the impact on independent workers and contractors in the agricultural sectors, especially hired-help on coffee planations. Carlos Fernando Motoa, a senator from the opposition Cambio Radical party, said the decision would push vulnerable workers out of the formal system.

“The unintended effects of this improvised handling of the minimum wage will end up hitting independent workers’ pockets,” Motoa said. “Many will be forced to choose between eating or paying for health and pension contributions.”

Economists warned that micro, small and medium-sized enterprises — which account for the majority of employment — may respond by cutting staff, reducing hours or shifting workers into informal arrangements to cope with higher payroll and social security costs.

Inflation and rates at risk

Analysts also cautioned that the wage hike could reignite inflation, complicating the central bank’s easing cycle. Central bank economists have forecast 2026 inflation at 3.6%, down from 5.1% expected in 2025, but several analysts said those projections may now need revising.

In an interview with Reuters, David Cubides, chief economist at Banco de Occidente, called the increase “absolutely unsustainable,” warning it would affect government payrolls, pension liabilities and the informal labour market.

“Inflation forecasts will have to be revised,” Cubides said, adding that interest rates could rise again in the medium term as a result.

The impact is amplified by Colombia’s ongoing reduction in the legal workweek. From July 2026, the standard workweek will fall to 42 hours, meaning the hourly minimum wage will rise by roughly 28.5%, further increasing labour costs.

The decree comes six months before the presidential election on May 31, 2026, and is viewed by critics of Colombia’s first leftist administration as an electoral gamble aimed at shoring up support for the ruling coalition’s candidate, Senator Iván Cepeda.

Opposition senator Esteban Quintero, from the Democratic Center party, warned that Colombia risked repeating the mistakes of other Latin American countries that pursued aggressive wage policies.

“Careful, Colombia. We cannot repeat the history of our neighbours,” Quintero said. “Populism is celebrated at first — and later the costs become unbearable.”

Former finance minister and presidential hopeful Mauricio Cárdenas said the decision would inevitably lead to layoffs, particularly in small businesses already operating on thin margins, and described the policy as “economic populism” whose costs would materialise after the election cycle.

“The employer ends up saying, ‘I can’t sustain this payroll,’” Cárdenas said. “People are laid off, and many end up working for less than the minimum wage. In the end, nothing is achieved.”

Liberal Party senator Mauricio Gómez Amín said the increase risked becoming a political banner rather than a technical policy tool.

“Without technical backing, a 23% increase translates into inflation, bankruptcies and fewer job opportunities,” Gómez Amín said. “Economic populism always sends the bill later.”

While supporters argue the measure will boost purchasing power at the start of 2026, analysts cautioned that the short-term gains could be offset by higher prices, job losses and a further expansion of Colombia’s informal economy — already one of the largest in Latin America.

The U.S. seizure of an oil tanker off the Venezuelan coast appears designed to further squeeze the economy of President Nicolás Maduro’s government. The Dec. 10, 2025 operation — in which American forces descended from helicopters onto the vessel — followed months of U.S. military buildup in the Caribbean and was immediately condemned by Venezuela as “barefaced robbery and an act of international piracy.”

The seized tanker, according to reports, is a 20-year-old supertanker called Skipper, capable of carrying around 2 million barrels of oil.

According to the Trump administration, the vessel was heading to Cuba. Given its size, however, it is far more likely that the final destination was China. Tankers of this scale are rarely used for short Caribbean routes; much smaller vessels typically serve Cuba.

The tanker had been sanctioned by the U.S. Treasury in 2022 for carrying prohibited Iranian oil. At the time, it was alleged that the ship — then known as Adisa — was controlled by Russian oil magnate Viktor Artemov and linked to an oil smuggling network.

On the surface, the seizure was unrelated to U.S. sanctions imposed on Venezuela in 2019 and expanded in 2020 to include secondary sanctions on third parties doing business with Caracas.

Venezuelan officials have therefore described the move as unprecedented, and they are largely correct. While Iranian tankers have been seized in the past for sanctions violations, this marks the first time a vessel departing Venezuela with a Venezuelan crew has been taken.

The Trump administration has signaled it intends to seize not only the cargo but the ship itself — a significant loss for the owning company. Because the shipment was sold under a “Free on Board” contract, the buyer assumed responsibility once the vessel left Venezuelan waters.

Nonetheless, the seizure represents a clear escalation in pressure on Venezuela. Reports indicate that around 30 other tankers operating near the country face some form of sanction. These vessels are part of a shadow fleet designed to evade restrictions while transporting oil from Venezuela, Russia, and Iran.

The message from Washington is unambiguous: more seizures may follow as the U.S. seeks to further squeeze Venezuelan oil revenues.

Venezuela’s economy remains overwhelmingly dependent on oil. Although official figures have not been published for seven years, most analysts estimate that oil accounts for more than 80% of exports, with some placing the figure above 90%.

Most Venezuelan oil is sold on the black market, largely to independent refiners in China. Chinese state-owned firms avoid these purchases to limit sanctions exposure, while authorities in Beijing tend to overlook shipments to non-state entities — particularly when tankers conceal their true origin.

An estimated 80% of Venezuelan oil ultimately goes to China through this channel. About 17% is exported to the United States under a Treasury license granted to Chevron, while roughly 3% goes to Cuba, often on subsidized terms.

Oil also accounts for around 20% of Venezuela’s GDP and more than half of government revenue, making the sector indispensable to Maduro’s survival.

Crucially, Venezuela’s oil industry was already in steep decline before U.S. sanctions began. Production peaked at 3.4 million barrels per day in 1998, fell to 2.7 million by the time Maduro took office in 2013, and dropped to 1.3 million barrels per day by 2019.

The 2019 oil sanctions shut Venezuela out of the U.S. market, forcing it to rely more heavily on China and India. When secondary sanctions followed in 2020, Europe and India halted purchases altogether. Combined with the pandemic-driven oil slump, production collapsed to just 400,000 barrels per day.

Output has since recovered to about 1 million barrels per day, aided largely by Chevron’s continued operations.

To sustain exports, Venezuela relies on a shadow fleet that uses false flags, renamed vessels, and manipulated transponders. Cargoes are sometimes transferred at sea — posing major environmental risks — before being relabeled in transit hubs such as Malaysia and shipped on to China.

The tanker seizure had little immediate impact on global oil prices due to ample supply and Venezuela’s limited market share. However, a more aggressive U.S. campaign could change that calculus.

For Venezuelan oil prices, the consequences may be sharper. Already heavily discounted due to sanctions risk, Venezuelan crude is now likely to be sold at even steeper reductions. Buyers will demand higher discounts and fewer prepayments, while export volumes may fall, forcing production cuts that are costly to reverse.

The result will be further pressure on the limited revenues Maduro depends on to keep the Venezuelan state afloat.

About the author:
Francisco J. Monaldi, Ph.D., is the Wallace S. Wilson Fellow in Latin American Energy Policy and director of the Latin America Energy Program at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy.

This article is reproduced from The Conversation under a Creative Commons licence

Colombia’s Transport Minister María Fernanda Rojas said on Monday that Avianca is close to completing mandatory software updates on its Airbus A320 fleet, with only 19 aircraft still pending intervention after a week of global disruptions triggered by what aviation experts describe as the largest recall in Airbus’s 55-year history.

The grounding forced airlines across several continents to halt operations, rebook thousands of passengers, and reconfigure flight schedules during one of the busiest travel periods of the year.

According to Aerocivil, Colombia’s Civil Aviation Authority, 102 of Avianca’s 124 grounded A320 aircraft are now back in service following an accelerated technical effort led in coordination with Airbus technicians. The remaining aircraft are expected to be updated within three days at Avianca’s main maintenance base at Rionegro, Antioquia. Authorities fast-tracked the import of 10 additional software units from France after Colombian regulators, the Ministry of Transport, and the tax agency DIAN jointly cleared an emergency customs process over the weekend.

Latam Airlines and JetSMART, the two other carriers in Colombia operating affected A320s  have already completed updates on their six combined jets. The minister said the rapid turnaround reflects “an unprecedented level of coordination” between airlines, regulators and Airbus engineers, who were deployed across several countries to help implement the corrective measures.

Globally, airlines said operations were returning to normal on Monday, after the grounding struck at a sensitive time for the global aviation industry. The Airbus A320, which only weeks ago overtook the Boeing 737 as history’s most-delivered jetliner, also faces long-term maintenance bottlenecks that have left hundreds of aircraft parked and waiting for parts under the pressure of post-pandemic demand.

The crisis also hit Airbus at a moment when the European manufacturer was stepping up efforts to meet its year-end delivery targets. Signals of lower-than-expected deliveries for November have already rattled investors, and the grounding added further uncertainty to an already tight production schedule. Shares of major Airbus customers — including Lufthansa and easyJet — fell on Monday amid concerns that delivery timelines could slip further. According to Reuters several deliveries have already been impacted, though the extent and duration remain unclear; one industry insider estimated around 50 aircraft could face delays.

Adding to Airbus’s challenges, the company on Monday confirmed a separate quality issue involving metal fuselage panels on a “limited number” of A320 aircraft. While the defect does not pose an immediate safety risk, Airbus said it is taking a “conservative approach” by inspecting all aircraft that could potentially be affected. The announcement sent Airbus shares tumbling as much as 6% during early trading, heightening market anxiety already fueled by the software crisis and flight disruptions.

The initial software alert was triggered after Airbus analyzed data from a recent in-flight incident and concluded that intense solar radiation under certain conditions could corrupt data linked to the aircraft’s flight-control computers. The disruptions rippled across major hubs in Latin America and the United States, coinciding with the U.S. Thanksgiving travel weekend, one of the busiest periods of the year.

Delta and American Airlines were forced to delay or cancel flights as dozens of A320 jets were pulled from service for urgent inspections. “Airbus apologises for any challenges and delays caused to passengers and airlines by this event,” the manufacturer said in a statement.

For Colombia’s flagship carrier and one of the world’s largest A320 operators, the near-completion of the updates marks a significant recovery after days of cancellations, rebookings and schedule reshuffling. The airline will reopen ticket sales on December 5 as its domestic and international network returns to full capacity and the remaining 19 jets are certified to fly.

Colombia’s flagship carrier, Avianca, announced Friday it has grounded more than 70% of its Airbus A320 fleet after the European manufacturer issued an urgent global bulletin ordering operators to carry out immediate software updates to prevent potential flight-control failures.

The disruption, one of the most severe to hit the airline in years, comes as Airbus launched one of the largest fleet-wide recalls in its history, affecting some 6,000 A320 commercial aircraft worldwide — more than half of the global fleet. The A320 is the world’s most widely used single-aisle airliner and the backbone of Avianca’s operations across Latin America and to U.S and Canadian hubs.

There are around 11,300 A320 jets in operation in total.

In a statement, Avianca said Airbus notified operators on November 28 that a significant portion of A320 require a mandatory software modification. The update, which Airbus described as reverting to an earlier software version, must be applied before affected aircraft can resume flights, except for ferry operations to maintenance bases.

“As soon as the aircraft reach their maintenance bases, they must remain on the ground until the updates are completed,” Avianca said. “This order affects more than 70% of Avianca’s fleet.”

The airline warned that the grounding will trigger significant operational disruptions over the next 10 days as engineers work to install the update across its aircraft. To limit further complications and manage passenger flow, Avianca has temporarily closed ticket sales for travel dates through December 8 — an extraordinary measure taken to “reorganize its capacity and re-accommodate passengers on available flights.”

Customers with upcoming reservations will receive direct notifications from the airline detailing their travel options.

The update requirement has already led to cascading delays and cancellations across several regions. Reuters reported that, at the time Airbus issued its notice to more than 350 operators, roughly 3,000 A320 aircraft were airborne. Airlines in the United States, Europe, South America, India and New Zealand said the repairs could trigger operational disruption during one of the busiest travel weeks of the year.

American Airlines, the world’s largest operator of the A320 family, said about 340 of its 480 aircraft require the fix. The carrier expects the majority of updates to be completed by Saturday, estimating about two hours of work per jet. Delta Airlines said updates to a small portion of its Airbus A320 planes will likely be completed by Saturday morning, a spokesperson said.

Avianca, however, expects the impact to last longer given the scale of its grounded fleet in Latin America and the limited availability of maintenance slots at Bogotá’s El Dorado International Airport.

The airline said its priority is passenger and crew safety and that it is working “as quickly as possible” to complete the mandatory modifications and restore normal operations.

To mitigate the fallout, Avianca is offering several options to affected passengers:

• Rebooking on the nearest available Avianca flight or on partner airlines with which it has commercial agreements.

• Flexible changes, allowing travelers to reschedule without penalty fees or fare differences, subject to availability, for up to 180 days after the original travel date.

• Refunds for unused flight segments through the airline’s website, call center, sales offices or travel agencies.

Avianca urged customers not to go to the airport unless their flight has been confirmed and to closely monitor email notifications associated with their reservation, as well as updates on its official channels.

Despite the scale of the disruption, the airline said the swift grounding demonstrates its commitment to safety while complying with Airbus’ unprecedented directive.

“The priority of Avianca is to ensure the safety of our passengers and crew,” the company said, adding that it aims to complete the required modifications as soon as possible to “minimize service disruptions.”