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Colombian President Gustavo Petro has called for his entire Cabinet to resign and announced that three parties will leave his governing coalition: the Conservatives, the Liberals and the “de la U” Party. By Wednesday afternoon, Petro had announced that seven ministers would leave their posts: Finance Minister José Antonio Ocampo, as well as the ministers of transportation, health, agriculture, interior, communications and science. The reshuffle follows Petro’s frustration with the way Congress has handled his proposed health care reform.
AQ asked observers to share their reaction to the events. We will update this page as developments arise.
Laura Lizarazo, senior analyst at Control Risks
Petro’s decision shows that the conciliatory tone and pragmatic approach his government displayed in 2022 will not last in 2023. His administration’s gradual radicalization in service of his agenda will now deepen and accelerate.
Persistent Cabinet tensions will be resolved in favor of the more dogmatic ministers, to the detriment of the moderate and technocratic wing. The Cabinet’s constant internal contradictions and backtracking will dissipate with the appointment of more radical ministers who will promote the government’s structural reforms without criticism. As a result, Petro’s government will be far less willing to incorporate moderate public policy proposals.
The departure of José Antonio Ocampo from the Finance Ministry is likely to make markets especially nervous. Ocampo is highly respected domestically and abroad, and his reputation had reassured foreign investors and financial institutions about Colombia’s macroeconomic stability. New Finance Minister Ricardo Bonilla, another moderate technocrat, will have to work hard to reverse market skepticism and restore investor confidence in the country’s fiscal soundness. Bonilla is a longtime Petro collaborator—Bonilla was Petro’s finance secretary during his Bogotá mayorship—and is expected to remain tightly aligned with Petro’s views and policy decisions, even if they are detrimental to fiscal stability. Bonilla is therefore unlikely to counterbalance or moderate the government’s most radical proposals, making disruptive regulatory and policy decisions more likely.
The rupture of the coalition with traditional and more moderate parties—like the Liberals, Conservatives and the “de la U” Party—will hurt the administration’s political leverage and governability. Petro’s decision to break his alliance with these parties will prove counterproductive; Congress will be less likely to approve his major health, labor and pension reforms. These ambitious initiatives are at the heart of the government’s transformation agenda, so it will likely resort to executive orders and other mechanisms to unilaterally impose the reforms if they are not approved in Congress. This will significantly erode the business and investment environment and increase regulatory risks and uncertainty for the private sector.
As Petro’s government pursues its reforms through legislative or executive action, several sectors will face especially acute uncertainty. Private health insurers (known as Health Promotion Entities or EPSs), medical technology firms, medical supply companies and pharmaceutical administrators will be most affected by the uncertainty caused by attempts to reform the health care sector. Private pension funds and labor-intensive sectors, such as leisure industries, agriculture, mining, construction and manufacturing, will be most affected by the uncertainty around the pension and labor reforms.
Mariana Palau, policy analyst
At the heart of this Cabinet crisis is Petro’s controversial health care reform. It has divided the unlikely coalition he had up until now, which included the Conservatives, the Liberals and the “de la U” Party, all very traditional parties who usually vote to the right or center-right. These parties were all represented in the Cabinet, in the ministries of the Interior and Transportation, among others. Now, Petro is replacing them with figures who are more likely to be loyal to him.
The health care reform would give the state more control over massive funds used to finance Colombia’s health care system. The leaders of these parties had publicly expressed concerns over the radical changes proposed in the reform. Petro’s massive layoff is a reprimand to these parties for their lack of loyalty, and shows he is not willing to take any kind of dissent. Basically, it’s his way or the highway.
With this massive layoff, Petro has plunged the country into unprecedented levels of uncertainty. The most worrying loss is former Finance Minister José Antonio Ocampo, who had been one of the few technocrats left in the government. Markets viewed him as the only person who could pull back the reins on Petro’s possible radical moves with the economy. With his departure, there’s a lot of fear that Petro will end Colombia’s long tradition of fiscal responsibility.
Tatiana Duque, Editor at La Silla Vacía
After nine months of Gustavo Petro’s presidency, media and reporters who cover him are already getting used to his unique way of making announcements, and how unexpected they can be.
Cabinet changes in Colombia have generally been a way for presidents to renew their staff, collaborators and ministers. And they generally take place after a president’s first year in the Casa de Nariño. The reasons can be simply political—presidents sometimes offer Cabinet nominations as prizes to the parties in their coalition, like Juan Manuel Santos did several times during his two terms. Presidents also make changes due to a major crisis, like Iván Duque did in the midst of the protests in 2019 and 2021. Such changes are a way to maintain and improve governability with a coalition.
But with Petro, the situation is quite different. In just nine months, he has already made two big changes to his Cabinet. In February, Petro took to national television to announce that he would fire three of his ministers—in Education, Culture and Sports. Education Minister Alejandro Gaviria had been particularly vocal against the health care reform that Petro seeks to pass in Congress. It is his biggest attempted reform yet.
And last night, Petro took to Twitter—which he often uses to talk to his base—to announce that the coalition that he formed with several parties is “over.” And for that reason, he asked for the entire Cabinet for resignation letters.
Again, the health care reform was the cause of his decision.
Hours before this collective resignation, Congress was debating this reform. Several members of Congress from the Liberal, Conservador and “de la U” Parties supported the project, against the words and wishes of their parties’ heads. This situation led the parties to announce publicly that the politicians who voted for the reform would be punished.
The lack of consensus around the reform is not new, and started earlier this year. Now, Colombia faces a political crisis inside the president’s coalition. In Colombia, presidents usually have a “honeymoon” period with coalition parties in the first year of government. The way that the health care reform is being debated inside and outside Congress has made this period quite the opposite of a honeymoon, and it has worn down the politicians involved as well as Petro’s staff.
In La Silla Vacía, we have confirmed that Petro no longer feels close to some of his ministers and staff.
The crisis in the coalition means that the ministers who represent those parties are right now first in the line of people who may be laid off in the coming hours. These are the ministers of Transport, Technologies and Housing. However, it is said that Petro also does not feel comfortable with the work or level of loyalty of others, such as the minister of Agriculture and the administrative director of the Presidency, a key member of the president’s staff. Another case is the minister of Interior and Political Affairs, whose work in Congress has been heavily criticized by the opposition and the coalition.
And there are rumors about possible dissatisfaction with the work of other ministers in key areas. They include the minister of Foreign Affairs, who yesterday headed an international forum about Venezuela that ended with no visible results, and the minister of Defense, who was set to come to the Congress this afternoon for a debate about the country’s security situation.
Like I said in the beginning, with Petro things are not as they usually are. When he was the mayor of Bogotá 10 years ago, he also called for the resignation of his staff after serving just six months of his term. He wanted to reorganize the staff and work with his closest people.
It’s possible that this afternoon, after a meeting with the Cabinet, we will have more clues about what may happen next. For now, two things are certain: Petro is playing all his cards to pass the health care reform in Congress, and he is not happy with all of his staff.
Tags: Colombia, Gustavo Petro