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Wednesday, July 6, 2022

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For the new president of Colombia, winning was easy

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Colombia has just broken with its political past, joining other Latin American countries. Frustrated by decades of unresolved inequality and discontent, voters pushed not one but two anti-establishment candidates into Sunday’s runoff, then backed Gustavo Petro, a former guerrilla fighter and later senator, to make him the country’s first leftist leader. .

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His running mate, environmental activist Francia Márquez, will be the first Afro-Colombian vice president, including race, social class and rural poverty on the agenda of a country that has long preferred to focus on other issues.

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What is the problem? It’s one thing for opposition candidates to lure disgruntled Colombians to the polls—and turnout was higher than it has been in years—but it will be quite another to govern this fractured country at a time when public finances are fragile, deteriorated democratic institutions and a divided country.

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After observing the post-electoral vicissitudes of the young leftist Gabriel Boric in Chile or peter castle —a rural school teacher turned politician— in Peru with its rotating cabinets, only one path is evident: the president-elect needs to build bridges quickly in order to materialize even part of his ambitious social and ecological agenda.

After a post-results speech full of ambitious promises, his cabinet elections and legislative plans must show signs of pragmatism and greater inclusiveness.

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The problems you face run deep. Colombia, like Chile, has long been a neoliberal success story, but progress has not been evenly distributed, and these failures, particularly high levels of informality in the workforce and paltry social provision, have become even more apparent. during the pandemic when the middle class shrank and families fell into poverty.

The unrest boiled over last year after a failed tax reform led to widespread protests, suppressed so brutally that dozens of people were killed. The fruits of the 2016 peace agreement that demobilized the Revolutionary Armed Forces of Colombia have also been ambiguous, as the outgoing president, Iván Duque, focused on modifying the agreement rather than implementing it or the promises of rural development that they propped up

As a result, Colombia is more polarized than ever. Although Petro won more than 50% and beat construction tycoon Rodolfo Hernández, he faces strong opposition in a country where the left is associated with the armed insurgency and where his admiration for the late Venezuelan leader Hugo Chávez is disturbed. His support was concentrated on the coast, in the south and in the capital Bogotá, where he was mayor.

The spectacular rise of Hernández, who was little known a few months ago, speaks volumes about the magnitude of anti-incumbent and anti-Petro sentiment.

To have any hope of success in the face of global inflation and other unwieldy headwinds, Petro must inject a dose of realism into an electoral program that borders on the naive. Protectionism will not solve any of Colombia’s problems.

His tax changes will be hard-pressed to deliver on spending promises that include broader pension coverage and state jobs for the jobless, even as unemployment hovers around 11%. You are right to focus on the energy transition, but how exactly will you fill the revenue gap left by hydrocarbons once new exploration stops and state-owned Ecopetrol becomes a producer of wind and solar power?

Crude remains the largest export of Colombia, and sudden changes can be a nasty blow to investor confidence. Assets fell when markets reopened on Tuesday after the election. Additionally, talking about circumventing the normal functioning of the Government by declaring a “economic emergency” is a short-sighted and alarming vision for an already vulnerable democracy that few trust.

To address the socioeconomic problems of Colombia in the long term — by making the tax system more progressive and efficient, for example, by improving productivity or managing diversification alongside a shrewd move away from oil and gas — it should quickly confirm the moderate José Antonio Ocampo as finance minister , prominent economist and former Minister of Finance and Agriculture whom he has cited as a potential option, or an alternative from a list that has been raised of respected candidates, thus reassuring investors.

At the same time, he must win support in Congress, where his party has only a minority. His efforts to broaden the base in the run-up to Sunday’s vote are encouraging, as is his plan for a “great national pactbut there are few details.

When confronted with the realities of government, leftist leaders in Latin America have been reasonably austere and, more importantly, have allowed central banks to do their job, notes William Jackson of Capital Economics. Still, Jackson also notes that the risk of deepening polarization and increasing debt is readily apparent.

Gimena Sánchez-Garzoli of the Washington Office on Latin America describes a dangerous combination of institutions weakened by COVID and the Duque administration and a population unwilling to wait patiently for change. The government is fragile, the peace agreement is not consolidated and there were already massive protests last year.

To assess the risks that come with excessively high expectations (and poor ministerial decisions), Petro You only need to look at Chile, where Boric’s approval rating has fallen to just 33%, even though he was elected late last year by a higher-than-estimated margin — it’s the steepest drop in Chile in decades. For what happens if you don’t have a broad base of support, you can look to Peru, where Castillo has weathered several impeachment attempts and appointed more than 50 ministers in less than a year in office.

Petro it has momentum right now and potentially international support in a region suddenly leaning more to the left. It could reinvigorate an economy that needs diversification and fiscal reform. But success is far away and the opposition is going strong, though its opponents may want to see this as much less a victory for the left than a defeat for a system that brought national growth but not progress. That discomfort will not go away.

Source: Gestion

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