A judge by the reaction of the markets, The messages given by Gustavo Petro, when installing the new session of Congress on July 20, did not alter the trend of the previous days. as he dollar As the yield of debt securities It showed a calm behavior on Friday, registering levels that a few months ago seemed unthinkable.
But that part of calm in the two indicated indicators hides the existence of tensions that are already evident. Beyond the olive branch extended by the President of the Republic when proposing a national agreements in order to move forward reforms that start from the construction of consensus, reality suggests otherwise.
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This shows an administration with reduced governance, as a consequence of the typical wear and tear of the first year of management, the mistakes made and the lack of capacity to materialize the campaign promises. On paper, there is still room to correct course and recover some of the lost space, if the laborious task of defining midpoints is done and the most radical positions are abandoned.
However, the ideological stubbornness that persists in the Executive, together with the attitude of a repowered opposition that feels strengthened, makes an understanding less likely. Furthermore, the proximity of the October regional elections It leads to a waiting period until the verdict of the polls is known and it is clear how the Historical Pact or its allies fared.
On the other hand, it is important to consider the other side of the equation. This shows low economic growth, with lines such as home sales in trouble, which is beginning to be expressed in the data related to employment.
Beyond the triumphalism of the House of Nariño, the inflationary challenge persists and it will require additional sacrifices so that the correction observed in the rate of increases is consolidated. As if the above were not enough, on the fiscal front there are significant spending pressures that are combined with lower-than-expected collection behavior, which threatens the stability of public finances.
And the alerts do not include a possible ruling by the Constitutional Court on parts of last year’s tax reform. Only in the case of the article that eliminated the deduction of the payment of royalties in the income tax of the extractive sector, the Dian said that a declaration of unenforceability by the high court would generate an accumulated shortage that would oscillate between 5.1 and 6.5 trillion pesos for this and next year.
Facing unforeseen events and emergencies is something that is part of the job of governing and more so in Colombia, where shocks are continuous. But this task can be even more complex to carry out if the relationship between the public powers is more one of confrontation than cooperation.
New chapter
If something became clear again after the election of boards of directors in the Senate and the Chamber, it is that the legislative “steamroller”, which made life easier for the Executive in the beginning, belongs to the past. Beyond the fact that Gustavo Petro’s antagonists have not formed a united bloc as the founder of Cambio Radical, Germán Vargas Lleras, desired, now things will be different.
Although the designation of who will guide the work in the congressional commissions is yet to be seen, everything points to the fact that the passage of emblematic projects will be much more accidental. to begin with, because arming the majorities in order for them to accompany the left will be something very difficult and even more because of the wear and tear of figures like Interior Minister Luis Fernando Velasco.
It may sound ironic, but the person in charge of the political portfolio, whose central objective was to gain support through perks in favor of “progressivism”, will end up strengthening the traditional parties in particular. Few dispute that today César Gaviria is the undisputed head of liberalism, who, in coincidence with the conservatives, altered the field of the balance of power in the Capitol.
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Due to this, the weakness of the Government is great and calls into question the transit of known initiatives: health, pensions and employment. The path for the project on higher education or the new mining code does not look entirely easy either.
The discussion on the general budget of the Nation for next year deserves special mention, which will be known in the coming days and must be approved before the end of October. Traditionally, the matter is resolved after a quick negotiation that includes items that satisfy the congressmen without touching the main lines proposed by the Ministry of Finance. This time, that transit is set to be much more difficult.
“A very different game begins the first year,” emphasizes columnist Héctor Riveros. “What it offered before no longer works, and even less in a scheme of fragmentation of the benches,” he underlines.
This does not mean that Petro has lost the battle. It is enough to look at recent history to verify that fragile presidents in the Legislature managed to carry out a good part of their agenda, at the point of negotiating here or giving in there. The well-known saying “help yourself and I will help you” is frequently applied in the halls of the Senate and the House.
However, this requires having an effective team with the ability to negotiate, something that is now conspicuous by its absence. Apart from the problems in the Ministry of the Interior, the Casa de Nariño does not have a good political operator. No less serious is that the majority of the cabinet is clumsy and inexperienced in parliamentary battles, something that was dispensed with concealing in the previous legislature.
With few exceptions, such as the heads of Health and the Treasury, who can get the health and pension reforms approved, the rest do not have it easy. Even Guillermo Alfonso Jaramillo and Ricardo Bonilla will find much steeper terrain.
Given the limitations, the logical thing would be to renew a good number of portfolios, among others because the President is more impatient with his ministers, who have little to show in terms of achievements. But here it returns and one of the great shortcomings of the current administration arises: the lack of suitable people who can replace those who leave and can move the gears of the state apparatus.
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This being the case, the only practical option left to the Executive branch is to get out of the ideological trenches and try to put the national agreement into practice. But opening the door of political pragmatism crashes with the dogmatic positions of those who consider that this would betray the principles of the left.
And although Gustavo Petro is conciliatory, there are acts that show that nothing has changed. The unprecedented absence of government representatives in the Committee of Coffee Growers It demonstrates for many the true spirit of a president who does not turn the page, but remains trapped in the rage caused by the choice in the management of the Federation of a person who is not to his liking.
the lifeguard
When the comparison is made with what happened a year ago, in the days before the presidential inauguration, the panorama is totally different. Twelve months ago the new government seemed impregnable in political matters and the progress of the economy was a source of concern, due to the populist proposals and the way to finance them.
Now things are different. The governance crisis, which is aggravated by a notable decline in the public order situation and an increase in the perception of insecurityThis is cause for concern, especially if this leads Casa de Nariño to radicalize instead of moving towards the center.
Even if this does not happen, there is concern that the administration will not be able to handle the issues at its expense. He deterioration of health care, the specter of electricity rationing, the progress of talks with illegal armed groups, social protestThey are part of a decalogue of urgent issues that need to be managed properly.
On the contrary, anxiety in the economic field is a little less. Beyond the slowdown in the growth rate and the difficulties in certain areas, the catastrophic scenario that some predicted did not materialize.
For better or worse, many businessmen accept that they continue to operate as before and that certain lines of consumption behave surprisingly well. It is true that industry and commerce reflect the vicissitudes of internal demand in which the rise in interest rates is felt, but even those who suffer from a drop in sales consider that better times will come.
On the other hand, economic policy continues to be seen as responsible. This includes, at least for now, controlled public spending and respect for institutions, beginning with the independence of the Banco de la República.
Both international circumstances and local decisions have contributed to what is known as “country risk” has decreased. An expression of it is the exchange rate that on Friday reached 3,959 pesos per dollarthousand pesos less than in the middle of last February.
Apart from what this means when it comes to paying external debts, there is the relief felt by those who purchased goods or services from abroad. In fact, several surveys show a rise in consumer confidence, largely explained by the lower price of the green ticket.
“The absence of big shocks in the economy is what today helps Petro the most, so entangled in the political front,” says analyst Leonardo García. “That is why his priority should be not to create difficulties for himself in this matter,” he adds.
In practical terms, the advice is not only about maintaining fiscal responsibility, but avoiding reforms that create capsizingto. Of particular importance is sending messages that lead to a reactivation of private investment which is in the doldrums, as the Dane figures at the end of the first quarter of this year showed.
For something like this to start requires an attitude of more cooperation and less confrontation. If once again the rhetoric of the “balcony” prevails with the well-known attacks on entrepreneurship, the arrival of new projects will continue to be French.
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This is not to mention acts that were considered hostile such as unilateral regulations on tariffs, arbitrary denial of permits, administrative interventions or the imposition of discretionary fines by the superintendencies. There is no doubt that reindustrialization is a laudable objective, but it will not happen in this four-year period if the owners of the capital consider that the rules of the game are not adequate.
Knowing if Gustavo Petro will adopt a more cerebral position in his second year is a question that will only be resolved over time. After his speech on Thursday, the hope is that the president will use his head more than his liver when making decisions. However, this gesture needs to be cemented if he wants to recover political space, while he takes care of an economic reality that to date is his main lifeline.
RICARDO AVILA PINTO
Special for EL TIEMPO
On Twitter: @ravilapinto
