There are several constants in Colombian politics, and two of the most important are that: (1) Congress is always a basket case, and (2) 90% of those commentating, analyzing, and dissecting the situation are from society’s elite and who vote to the right of the spectrum.
It’s a simple fact and consequence of a country that only fully educates very few and almost all of them are from the upper reaches of local society.
Over the past week there have been a mass of headlines regarding a bugging scandal and campaign funding related to members of the coalition of President Gustavo Petro, but the way the local press is talking, you would think this was Watergate, Chappaquiddick, and Iran-Contra — all wrapped up into one event.
It simply isn’t and needs to be contextualized.
I wrote weeks ago that the mass firing of Petro’s cabinet members was a good news event, as it would mean any reforms would be diluted. Others finally appear to be catching up to that fact. The way those reforms are being painted in the press, and by local federations such as ANDI land Asofondos, you would think we had the best pension, health, and labor laws on planet earth. We don’t. They are solid but far from perfect.
Headlines, from sources you pay for, suggest the Colombian peso has strengthened as the reform debates have been frozen. Not true. For weeks, the peso has been strengthening. Its recent 2.5% pop is welcome, but since mid-April, it has risen 12.5% — despite an oil barrel price that is struggling even amid cuts from OPEC+.
In my opinion, the reality is that people now realize the peso was totally oversold in 2022 and that Petro is not the market pariah many feared. Oil production has popped since he arrived, unemployment has fallen as job creation increases, the deficit is falling, and the economy — while slowing after the 7.5% jump in 2022 — is still expanding. On top of this, let us not forget that one of the overriding issues for Colombia is the fumbling of the nation’s investment grade status under former President Ivan Duque and then-finance minister Alberto Carrasquilla.
Are we in great shape? No.
Are we disappearing down the plug hole ? No.
The scandals we are seeing are a right of passage for every Colombian president. The buying of votes is a cross party epidemic, while managing broad church coalitions full of backstabbing ambitious politicians is, at best, hazardous.
Finally, let’s not forget where we are in the political cycle: four months ahead of the regional and municipal elections. Point-scoring is at a premium. This is a deeply divided country with the elite scrambling to remain in power while tens of millions live in poverty.
This is no Petro support message — he is no messiah — but, instead, a reality check that this is a close to ungovernable country riddled with self interest among the upper echelon of society.
The economic press, which is famously poor in Colombia, need to do a better job at giving a more balanced picture of what is going on.
Investors deserve better.
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