Colombia shifts to the left: who is the new president and what does he plan?

When Gustavo Petro won Colombia’s presidency on Sunday, June 19, 2022, he became the first progressive and left-wing candidate to be elected president in the country’s history.

But his election continued a trend in Latin America in recent years, with Colombia joining countries like Mexico, Honduras, Venezuela, Peru, Bolivia, Chile and Argentina in moving left.

Petro, who is 62, is an economist and leftist activist with a long political career as a senator, including being named “best congressman.” He was mayor of Bogotá, the capital of Colombia, from 2012 to 2015. 2022 was his third tilt at becoming president, following runs in 2010 and 2018, when he finished fourth and second respectively.

His running mate, Francia Marquez, 40, is a human rights, environmental activist, and lawyer. In 2018, she was awarded the Goldman Environmental Prize for her work in stopping illegal gold mining in her community, and the BBC listed Márquez on their “100 Women” list for that year. Márquez was a pre-candidate for the presidential elections of 2022. She will be the first Afro-Colombian vice president in the country’s history and will also be only the second woman to hold the post.

The biggest issues on the president’s desk

Petro won the presidency with 50.44% of the votes with a polarized Congress and big challenges in environmental, social, and economic matters. The incoming president must negotiate the legislative program and be willing to share cabinet positions with different parties, especially the economy, security, and foreign relations ministries.

During his campaign, Petro talked up the need to take unorthodox economic measures, and now he must reach agreements on social subsidies, the Fuel Price Stabilization Fund, and the board of Ecopetrol, the biggest oil extraction company in Colombia. These three issues will be crucial to understanding if the incoming government will be moderate or not.

Another significant issue is the mistrust between the president and the military. Petro must appoint someone who commands the respect and trust of the current military members. Otherwise, the transition is likely to be messy.

Petro also has to reassure allied countries that he won’t immediately break trade and military ties, and that Colombia’s foreign policy won’t affect commercial relationships with the United States, Europe, or Asia. With this in mind, he has appointed álvaro Leyva, an ally from the conservative party, as foreign minister.

According to experts at Colombia Risk Analysis, the next four years will be a test for Colombia’s institutions. Colombia’s democracy is not at risk, at least for the moment. As president, Petro will likely face a polarized electorate, a difficult fiscal situation (a high debt to GDP ratio, inflationary pressure, high subsidies on fuel and supplementary incomes, and a growing current account deficit), and weak and politicized institutions, including the Attorney General’s Office, the Ombudsman, and the Public Prosecutor.

Petro’s agenda: reform with inclusion

Petro’s program is clearly reformist and goes by the slogan of “humane capitalism,” and Petro has said that he will govern for the “nobodies,” meaning minorities and the poor (the latter making up 39% of the population, according to official figures from 2021).

During the campaign he promised greater inclusion and to address inequality – values which are sure to resonate in a country where nearly half the population lives in poverty. He also pledged to increase taxes on unproductive land, to introduce free university education, change the way Colombia fights the war on drugs, to move away from security-focused policies, and to modify the pension system. Regarding the last of these, Petro proposes changing the current system to make it mandatory to contribute to the public pension system. Private pensions will continue to be available, but only for those who are able and willing to contribute above the established cap. He is also proposing the provision of a minimum income to senior citizens pension who are not entitled to a pension under the current legislation.

On energy front, Petro has said he plans to stop exploration for oil and cease mining “from day one.” He is against employing fracking as an oil extraction technique and will seek a ban. He further wants to move the country away from extractive energy sources (oil, gas and coal) to the production of clean energy to protect the environment. As a result, the expectation is that foreign investment in oil, gas and coal will decrease or cease in order to start the transition to green energy sources.

In a speech on June 19, Petro said he wants dialogue with all sectors and that he will seek agreements to implement his government plan. This will include working with a wide range of political actors in a country that is polarized and divided by both social and economic interests.

Should things not go as Petro hopes, it is important to point out that Petro will not be able to rule by decree. Colombia’s Constitutional Court has been emphatic that emergency powers can only be enacted in circumstantial, transitory, and exceptional events. Presidential decrees cannot be used “to overcome normal functional and structural problems” that can be addressed through Congress, even if these problems are serious and upset the public order. This applies to economic and social emergencies.

The Court has also said that the only situations in which it is legitimate to resort to rule by decree are when there are “supervening and extraordinary events (...) which are opposed to ordinary, chronic or structural situations, of common and foreseeable occurrence in the life of society.” This suggests that Petro cannot legally rule by issuing a decree authorizing emergency powers or a state of emergency.

Also worth noting is that even if he tries to pass radical reforms, Petro does not have the congressional support to implement them. Any proposed law must be approved in two chambers (senate and house), in addition to the constitutional control exercised by the Constitutional Court to prevent contravention of the country’s the Political Constitution.

Economic focus

Petro has said that in his first 100 days in office, he aims to implement an emergency plan to counter hunger, introduce a “living income” for mothers who are heads of households, and to forgive the student loans of 10,000 people. Analysts expect Petro’s policies to potentially worsen inflation and they predict it will have a negative impact on long-term growth.

Staying with the economic situation, it is important to highlight that while the Colombian economy has bounced back from the pandemic, it remains hamstrung by a huge informal sector. Some 60% of workers are thought to work off the books, and the country has some of the highest levels of inequality in the region. Nearly half of Colombians see the economy as getting worse, with that share increasing to almost 60% among the poorest. Petro is promising radical changes.

In terms of trade relations and exports in particular, Petro wants to halt new oil developments, Colombia’s top export, phase out fossil fuels, and focus on the domestic production of goods that are currently imported. The transition, however, won′t be abrupt and the priority will be to upgrade and strengthen local production through an ambitious development plan. At the same time, Petro wants to revisit trade deals and to increase tariffs to improve Colombia’s position in international trade, to modify the country’s profile as an exporter of raw materials and change it into that of a supplier of goods and agriculture supplies with an environmental emphasis.

Further, Petro wants to increase tax revenues by 5%, in part by cutting company tax exemptions. And although exports form an important part of the new government’s plan, imports were not mentioned in his speech.

It is clear that Petro’s government will be put to the test. As president, Petro inherits a country with an external debt equivalent to 50% of GDP, in which inflation has devalued the Colombian Peso to a degree never seen before, and where unemployment is the highest in the continent (10%, according to The Economist).

Given the uncertainty generated by this unique electoral result, the questions surrounding the functioning and legitimacy of institutions and the need for a harmonious dialogue among the political actors across a range of interlinked issue, this is a defining moment for the country. Either there will be a positive change in Colombia or left-wing politics will be buried at the next election.

Since his election on June 19, Petro has made important moves such as the appointment of the Minister of Foreign Affairs and has held meetings with the political sectors that most opposed him during his campaign. This has sent a message of alliance and union among the political forces of Colombia.

We also note that he has moved early to discuss peace and the climate crisis with ambassadors from European Union nations and that the Chinese president, Xi Jinping, congratulated Colombia’s president-elect and stressed that relations between the two countries are at a new starting point. According to the Xinhua news agency, Xi expressed his willingness to work with Petro to “deepen mutual political trust, advance practical cooperation, and to work for the further development of bilateral relations” for the benefit of the two countries. It appears we can expect an interesting breakthrough in political and commercial relations between the Colombian government and China.

Written by: Andres Naranjo and edited by Ana Paola Rodriguez

*This article is informative and is not to be used as legal, economic, or commercial advice.