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If he becomes Colombia's president, Senator and former Bogota mayor Gustavo Petro will scare away investors due to his economic proposals, which include promoting a greater state role in the economy.  (Photo: City of Bogota)
Tuesday, March 30, 2021
Perspectives

Colombia: Gustavo Petro Can Win Presidency


Investors will be scared away by his economic proposals.

BY SERGIO GUZMAN
Global Americans 

Colombians who are displeased with the status quo will give left-wing candidate and Senator, Gustavo Petro, a chance to win the Colombian presidency in next year’s election. Though both the current government and the business sector want to avoid this scenario, their actions have continued to open the door to the possibility of a Petro victory. Will Petro take advantage of his rival’s leadership gaps?

To say that Senator Gustavo Petro does not have a strong chance of winning the Colombian presidency in 2022 would be a lie. Colombia’s political, economic, and social environment, along with that of the region, suggests that anti-incumbent populist opposition groups (whether from the left or the right) can capitalize on the mistakes of current leaders.

Although the majority on the right and center of the political spectrum seems to agree that a victory for the former M-19 would be a disastrous scenario, due to his positions on economic nationalism, redistributive populism, and his episodic anti-democratic tendencies, neither the political establishment nor the business sector seems to be willing to make concessions to avoid this outcome.

As calculations for the 2022 presidential campaign begin, many are using the 2018 electoral campaign as a proxy. In that race, the fear of Senator Petro and the failure of the Maduro regime in Venezuela played an important role in shifting votes away from Senator Petro and toward President Iván Duque, who campaigned as a moderate. However, pandemic aside, after four years of an “Uribista” government there haven’t been substantial improvements to the quality of life of the poorest Colombians. This will make it more difficult to sell Senator Petro—and the changes he proposes to the economy and society—as an undesirable and inconvenient option.

The rise in unemployment and inequality in Colombia, the lack of leadership at the center of the political spectrum, and the weariness with the direction of the Democratic Center party all give Senator Petro a marked advantage at the start of this political cycle.

The pandemic has had a devastating effect on formal employment in Colombia. According to DANE, unemployment increased from a stable average between 9-10 percent to reach a peak of 21.1 percent. It currently stands at 17.3 percent, which is still much higher than the average of previous years. Informality rates are above the government’s expectations, and unemployment affects women more than men, increasing the country’s gender gap.

At the same time, criticism of the government’s response to the pandemic has not been in short supply. More than 54.6 percent of the subsidies have benefited large companies, which also pay the majority of taxes, while small- and medium-sized enterprises, which generate the most employment, received proportionately less. The perception is that, while the pandemic naturally increased social inequality, the government’s response has exacerbated the income disparity. According to the latest Gallup poll, the majority of the public thinks that Colombia is losing the fight against poverty, unemployment, and corruption. This is not encouraging for candidates, including current Vice President Martha Lucía Ramírez, who are running on a continuity platform.

Additionally, the government’s poor performance in improving security in rural areas, its non-compliance with the peace agreement, and the lack of political consensus regarding the country’s direction is unsettling to voters. It is unlikely that voters will choose continuity if confronted with a hypothetical second round of elections with Senator Petro, who promises significant changes.

Colombia’s center represents the strongest rival for both “Uribista” continuity and the Petro nightmare. However, the lack of leadership consolidation among the diverse pack of candidates seeking to win the presidency does little to secure their place in a runoff. Although there is still time for the center to agree on who to support, the squabbles over its leadership, and the poor performance of some center-left mayors in handling the virus, can be woven into a political narrative that a skilled politician—like Gustavo Petro—can exploit.

This does not mean a Petro presidency is the best option for Colombia. His anti-democratic behavior will likely explode when faced with a non-cooperative Congress and other independent entities (such as the Attorney General, Public Prosecutor, Comptroller General, and Ombudsman) seeking to block his attempts to overreach his executive power. When this happens, Petro will likely suggest that the only solution to being hamstrung will be a Constitutional Assembly to reorganize the government and its functions. Meanwhile, international (and national) investors will be scared away due to his economic proposals, which include mining divestment, increasing taxes on the wealthy and corporations, and promoting a greater state role in the economy.

This scenario seems to be recognized by the political establishment and the private sector, however, they seem keener on passing a tax reform that increases taxes on the rest of the population, while leaving corporations and the wealthy unscathed. It is as if their actions are a self-fulfilling prophecy, paving the way for the Petro nightmare they so loathe. Will they correct the course?

Sergio Guzmán is the director of Colombia Risk Analysis, a political risk consultancy in Bogotá. His social networks are @ColombiaRisk and @SergioGuzmanE 

This article was originally published by Global Americans. Republished with permission.

 

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