Colombia’s new president, Gustavo Petro, a former M-19 guerrilla who is his country’s first leftist leader, talked at length about reducing poverty and inequality in his Aug. 7 inaugural address. That’s great, but there were two key words missing from his 46-minute inaugural speech: foreign investments.
Petro mentioned the word “peace” 19 times, referring to his plan to end the armed conflict with the ELN rebel group, and he used “inequality,” “poverty” and “climate change” repeatedly during his speech.
But he made no reference to making any efforts to attract foreign investments and only tangentially mentioned the need to redirect energy investments toward green industries. This is a blind spot in Petro’s agenda, because Colombia will badly need foreign investment to make its economy grow and to reduce poverty.
To his credit, Petro explicitly vowed to respect the constitution, trying to allay fears of the nearly 50% of Colombians who didn’t vote for him that he might try to change the country’s charter to stay in power indefinitely.
That is the Colombian opposition’s biggest fear, as former President Ivan Duque told me in an interview last month — that Petro might follow the Chavista model and try to stay in power beyond his four-year term.
In addition, Petro vowed to turn Colombia into a world leader in the fight against climate change — kudos for that — and called for “a new international convention that accepts that the war on drugs has failed.” While former Colombian President Juan Manuel Santos laid out a similar plan several years ago, Petro deserves applause for reminding the world that narcotics production will not subside unless rich countries reduce their insatiable demand for drugs.
But Petro’s obvious lack of interest in attracting investments and generating wealth is worrisome. It goes beyond being an obvious omission in his first official speech. It’s also evident in some of his cabinet appointments.
While Petro has appointed respected economist Jose Antonio Ocampo as his finance minister and moderate academic Alejandro Gaviria as education minister, he has also made several cabinet appointments that are won’t help lure domestic or foreign investors.
Petro appointed Communist Party leader Gloria Inés Ramirez as labor minister, as well as Iván Velásquez, an investigator of crimes committed by far-right paramilitaries, as defense minister, and an environmental activist as mining minister.
It’s also telling that Petro appointed Alvaro Leyva, a 79-year-old veteran negotiator with leftist guerrillas, as foreign minister. Petro has said that he will be a foreign minister “of peace,” suggesting that Leyva will use his international contacts from previous peace mediations to seek a deal with the ELN.
Leyva would make an excellent peace commissioner, but there’s a serious question about whether he’ll be even interested in promoting trade and investments. And Petro’s new commerce secretary, economist Germán Umaña, has opposed Colombia’s free-trade agreement with the United States.
“Foreign investment has certainly not been a priority for this new administration,” Sandra Borda, a political scientist with Colombia’s University of Los Andes, told me. “Colombia’s left, just like much of Latin America’s left, has ambivalent positions and often very critical ones toward international trade and foreign investment.”
Kevin Whitaker, former U.S. ambassador to Colombia, told me that the largest U.S. investments in Colombia are in the coal and oil sectors, which Petro has vowed to regulate in his quest to accelerate the transition to green energies.
“Inasmuch as he is signaling a move away from these industries, it will be hard for Petro’s government to attract more investments,” Whitaker said.
Petro’s government deserves the benefit of the doubt, and we all should wish him the best. But he may not have learned the lesson of past leftist economic debacles in Latin America, caused by governments that focused almost exclusively on re-distributing wealth, and forgot about generating it.
My prediction: Petro will substantially increase subsidies to the poor and may gain in popularity, thanks to that. But, unless he focuses on ways to generate new investments, , as well, it may be a short-lived fiesta. Colombia could run out of money by the end of his term, and the poor could end up poorer than before.
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