After coalition rupture, Petro to push reforms “on the street”

This week saw one of the most abrupt ministerial reshuffles in recent Colombian history. Nine months into his administration, President Petro ordered his entire cabinet hand-over their letters of resignation, and within hours, seven of the country’s most important ministers were out of a job.

The mass resignation of ministers who joined Petro’s coalition at the start of his administration includes Finance Minister José Antonio Ocampo; Guillermo Reyes (Transportation); Cecilia López (Agriculture); Carolina Corcho (Health and Social Protection); Alfonso Prada (Interior); Sandra Urrutia (Communications and Information); and Arturo Luna (Science and Technology). The majority of these cabinet members are representatives of the three mainstream political parties – Liberal, Conservative, La U – that joined Petro’s Historic Pact coalition and gave the administration a majority in Congress.

The ousting of moderates, and politicians who served under the administrations of former presidents César Gaviria, Ernesto Samper, and Juan Manuel Santos, to be replaced by close political allies of Petro’s Colombia Humana party, signals a consolidation of the leftist President’s reformist agenda. The abrupt end of Ocampo’s term as Minister of Finance to be replaced by Ricardo Bonilla, a seasoned economist who served as District Finance Secretary during Petro’s embattled mayoralty (2012-2015), sent shock waves across currency and bond markets.

On Thursday, the Colombian peso lost 3.4% of its value against the U.S dollar and the premium demanded by investors to hold the country’s international bonds jumped 22 basis points – to 431 – according to investment bank JPMorgan. Ocampo, a loyal Liberal party member, had been appointed by Petro to design a far-reaching tax reform, and one, ratified by Congressional lawmakers.

The cabinet shake-up came within the same week that a poll by Invamer revealed that Petro’s approval ratings dropped to 35% from 41% in February. This new low, in which 57% of Colombians now disapprove of the President’s handling of the economy marks also the fifth poll in which Petro has been losing support among voters since taking office on August 7, 2022.

Given the turbulence in financial markets, and fears that Petro is radicalizing his agenda, Bonilla reassured investors of the Central Bank’s independence and sound “fiscal rule” of the nation’s public finances.  The peso closed Thursday at COP$4,650 to the USD.

While several of the appointments in Petro’s new cabinet have generated controversy among the opposition, Petro’s removal of Health Minister Carolina Corcho is seen as a positive move to de-polarize a Health reform that has received stiff opposition from the leaders of the three traditional parties that made up Petro’s coalition. The announcement by former President César Gaviria and head of Liberal Party that house representatives must vote “No” to the health bill, unleased the political crisis, and rupture of the coalition.

President Petro accused “traditional political leaders and the establishment” of conspiring against his administration. Corcho’s exit was welcomed by former Health Minister Fernando Ruíz Gómez, credited for implementing the mass vaccination campaign against COVID-19, and securing more than 90 million doses during the pandemic. “Never in the health sector have we had a period with such induced uncertainty, such inflexibility, such iron-fisted dogmatism, and lack of dialogue. It has been such a hard lesson that I hope the government and the institutions have learned,” posted Ruíz on Twitter.

The real test of how Petro’s cabinet reshuffle and reforms will be received comes Monday when the President makes his third appearance on the balcony of Casa de Nariño to mark International Workers’ Day. The speech on a bank holuday in which unionists will march toward Plaza de Bolívar, as well as indigenous groups and pro-government movements, will reveal if Petro can defend his social reforms beyond his loyal base. Calling for mass mobilizations in support of government policies, Petro’s return to the balcony – third time since the start of his administration – is a tested recipe since his Mayoralty of Bogotá. According to an opinion piece in Spain’s El Pais, the May 1 address will seek to recover Petro’s essence. “The one that led him to the presidency: with a lot of the militant left, a lot of the street, and a lot of speech.”