What Jumps Out: Congressional Chaos

I mentioned on Monday that when the president is away, the political mice will come out to play. So, no surprise that the Labor Reform Referendum was sunk by the senate, and an enormous scandal has erupted. In short, the allegation is that the senate head (opposition party) brought forward the vote so that some supporters missed the vote, which was lost 49-47.

The government is demanding that the vote be reopened or repeated, and Gustavo Petro is calling for public protests. In the middle of this, there has been an attempt to revive the original Labor Reform bill by the opposition, but this is seen by many as a red herring to confuse the senate voting process. Lawyers are involved and it is a total mess. Whatever little respect for the political leaders of Colombia that still existed, is trickling away rapidly. Frankly speaking – pathetic.

Petro himself signed up for the New Silk Road in Beijing along with other Latin American leaders. While the orange man is sleeping in Washington, China will happily be handing out low-cost loans and/or tendering at low cost for projects in the region. Donald Trump’s team is not happy, but Colombia and the rest of Latin America cannot be blackmailed or bullied by a man who is slowly but surely losing the plot. Again, how will the hard right politicians, such as Iván Duque, get back out of their huge support post-election for Trump, who, since January, has been busily trying to torpedo the local economy.

The economy itself continues to grow. Departamento Administrativo Nacional de Estadística – DANE Colombia reported that Q1 GDP was 2.7% (est 2.6%) versus 2.4% a year ago. The principal drivers were commerce (3.9%) and agriculture (7.1%), which contributed over 50% of the annual growth. The Economic Activity (ISE) rose 4.5% in March, drafting the reading for January & February.

On the negative side Q1 investment whilst still rising slightly was still down 8.1% YoY. Whilst the opposition will gladly point at the government, it is equally down to the chaos we are seeing in congress where self-interest is taking priority over the state of the nation. The Peso ($4194) has recovered and has joined the stock market in outperforming most of the markets around the world.

Have a great end to the week.

Roops.

Never miss Rupert’s latest commentary.
Follow him now on LinkedIn to see What Jumps Out.

Colombian President Gustavo Petro and Chinese leader Xi Jinping in Beijing. Photo credit: Gustavo Petro/Facebook.