Who is the bull, and who the matador?

COLOMBIA - Report 26 May 2023 by Juan Carlos Echeverry and Andres Escobar

Most political and technical observers of Congress found the approval of the president’s healthcare reform initiative in the first committee of the House of Representatives disconcerting. The key political parties had expressed deep objections, and initially claimed they’d refuse to support it. But the president addressed the impasse with a cabinet reshuffling, appointing new ministers of the interior, finance and healthcare. Apparently, that did the trick. Rumor has it that the government is deeply engaged in horse-trading and pork-barrel politics and using the capote (the red cloth that incites the bull to attack) of appointments, regional projects and the budget to lure supporters into the government’s fold. If that’s so, we’d be witnessing a faena (the standoff between bull and matador) over which Congress may eventually pay dearly for the skills of the president-matador.

Or, could the face-off be the other way around? Did Congress treat the government like the bull, persistently attacking, doing whatever the matador asked, to get its reforms approved? Members of Congress know that some of these initiatives will eventually sink; meanwhile, they’ll have benefitted from pork barrel largesse.

So who is the matador and who is the bull? We don’t know. We think government and Congress each consider themselves the matador, and the other the bull. This is a long game, that won’t end with congressional approval of the plan.

The Italian multinational Enel announced it would indefinitely suspend the Windpeshi wind project in La Guajira, due to insurmountable difficulties over community protests and road blockages. Work was stopped for about 50% of working days between 2021 and 2022; and 60% so far in 2023. Nelson Amaya, a Guajiro and former deputy development minister, predicts similar problems for neighboring wind projects led by EPM, Isagen and AES. The new wind generation projects seem to be in a stalemate. If other wind projects met the same fate, President Gustavo Petro’s energy transition agenda, one of the crucial pillars of his administration, would suffer a huge blow.

Addressing the latest data on multidimensional poverty, Dane director Piedad Urdinola stated that 6.6 million people live in poor quality of life conditions. The most serious problems aren’t in public services or health, but in informality, and weak education. Colombia has made dramatic poverty reduction gains over time, cutting poverty by half over the past 12. These are remarkable results. So Petro's criticisms that the Colombian economic system doesn’t work for the poor are demonstrably false. What doesn't work in Colombia are education, and the ability to create companies that create formal jobs. That is where the focus of the government should be, more than on healthcare and pension reform.

Though the outlook for Q1 growth improved over the quarter, the general deterioration in economic momentum is an inescapable truth, acknowledged by economic analysts and the Central Bank.

The Mining and Energy Ministry in December released a widely-criticized assessment about the size of Colombia’s gas reserves, to support the Petro government’s inclination to avoid signing new fossil fuel exploration contracts. Minister of Mines and Energy Irene Vélez backed the report, stating that gas reserves that could last until 2037 – or even 2042. But the National Hydrocarbons Agency’s official estimate in May projected that Colombia has only 7.5 years of oil production left, and 7.2 years for gas.

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