21 Aug

Colombia Risk Analysis Discusses Ivan Duque’s Presidency With Loren Moss: What Will The 2nd Half Bring?

August 2020 marks the second anniversary of the inauguration of Iván Duque as President of Colombia and the midpoint of his administration. Colombia Risk Analysis, Colombia’s leading consultancy on political risk factors for foreign corporates, diplomats, and institutional investors released a document that shares their evaluation of how the Duque administration will address a broad list of challenges in its final two years.

The report touches on everything from the COVID-19 Pandemic, the implementation (or lack thereof) of the historic 2016 peace accords, political corruption, and who might run for president in the next election.

The report’s co-author Cameron Wilson took time to speak with Finance Colombia executive editor Loren Moss about the many points covered by the report, including what to expect in the second half of Colombian President Ivan Duque’s term.

Finance Colombia: I’m here with Cameron Wilson, who along with Sergio Guzman, just completed an in-depth report on Colombian president Iván Duque’s midterm performance, his challenges and opportunities for the remainder of his administration. Cameron, thank you for joining us.

Cameron Wilson: Thanks for having me with you.

Finance Colombia: Let’s get into this fascinating in-depth report, obviously guys you spent a lot of time on it. First tell me a little about your background and how you came to be affiliated with Sergio and Colombia Risk Analysis.

Cameron Wilson: I grew up on the US east coast in Connecticut, and at the moment I’m a student at Johns Hopkins School of Advanced International Studies, which is one of the handful of policy schools that people go to study international relations, economics, do some language training, it’s called SITES for short, it’s in DC, and it’s part of the community of Georgetown, Columbia, Harvard Kennedy School, and I wound up with Sergio because I was looking for something to do over the summer, like a work experience. This pandemic has upended all of our lives, I was going to be in Bogota for 12 weeks or so, basically helping this company with the product they put out on a monthly, sometimes a weekly basis, then I did some translation work as well, and that’s how I ended up with Sergio, looking for that opportunity over the summer.

Finance Colombia: Good, well it’s obviously a first-class report, let’s start into it. Colombia is a politically polarized country, you have a group of hard-left politicians and their supporters, you have a group of hard-right politicians and their supporters, and then you have a large maybe non-aligned electorate that seems to largely be fed up with both camps. So, can Duque get reelected in short and how? If he can.

Cameron Wilson: Well, to clarify, I think you’re probably asking more if a right-wing candidate can get reelected given that now presidents cannot be in consecutive terms, which is sort of an interesting wrinkle. In Colombian politics he could run again in the future, but not in 2022. He’d have to sit out and run again in 2026, I guess would be the earliest possible opportunity. But that seems very unlikely at the moment, given his approval ratings are at historically low levels and over the next two years it’s hard to view a scenario in which he will be able to attract more favorable public opinion, even if he somehow reaches out towards the middle from his sort of hard-right party, the Centro Democrático (political party established by former President Alvaro Uribe) so at this point it seems like a long shot that even if he would stand to reelection in 2026, or frankly that even his party would have even the successful side in the next presidential election.

Finance Colombia: We already saw one Centro Democrático senator announce that she was going to run, is there a chance? Could Uribe conceivably run? (Editor’s note: This interview was conducted shortly before Uribe was detained under house arrest on witness tampering charges)

Cameron Wilson: Well, I think that at the end of the second term back in 2010, there was a little legal wrangling over his ability to run again, and popular as he might have been at that moment, I think by and large Colombians were glad that he couldn’t stand for a third term, so he cannot run for a third term and also, the days of, like even president Juan Manuel Santos having two consecutive terms, those days are over as well, now for presidents to stand for a second term it has to be a non-consecutive term.

Finance Colombia: You know, I am here in Medellín and Uribe still has quite a considerable base of supporters.

Cameron Wilson: Yeah, it seems like his supporter base, for the most part, is socially conservative, a little bit older and probably had more experience with the massive disruption that was long-standing in the insurgency, on the lives of Colombians everywhere, and I’m sure you and most people that have seen this episode are sort of familiar with his biography, but that played a big role in his early life, and for better or worse the Colombian electorate now is sort of younger, the average age is around 30, and  so as we move on, one thing that sort of emerges is that the new population has less and less experience of the hardship that was caused, and that might be one reason why Uribe and his party’s demand for  retribution, there may be a little bit more discomfort with a transitional justice scheme for FARC dissidents, all of that makes them more uncomfortable in a way that’s less common for the people of my age I must say, and it’s only going to continue to be that way.

Finance Colombia: It sounds almost like you’re mirroring like the situation with Cuban-Americans in Miami, where there’s a generational divide between the older generation of Cuban people, who escaped, suffered first, and then maybe their children, the older generation had more of an emotional attachment, I think there’s a younger generation that seems to be more flexible, but they’re not necessarily pro Castro, but they don’t have the emotional role in his response, and are open to at least some kind of dialogue, even though that doesn’t mean they’re normalizing relationships or anything like that.

Cameron Wilson: You know, I don’t have any experience with that community, I haven’t been to Cuba in the way I’ve been to Colombia, but it sounds very similar, that’s interesting.

Finance Colombia: Yes, I think there’s a difference because I think you have people here, and I talk to people, even neighbors and if they’re older, let’s say older than 50, and they lived in those troubled times, then they have maybe especially—it also depends on if they were put in a rural area as well, because maybe Uribe, or the military or the government of that time came in cleaned up where you lived…or maybe they came and cleaned OUT where you lived, right? And so you can have a completely opposite perspective on things, if you look at the still unresolved case of a false positive and things like that, and even, really right now this week is the Supreme Court where he is under a legal cloud, and potentially facing charges, it’s hard to imagine where that might go, but it’s not like the view of him as a hero or savior is universal, even though there are some that definitively strongly believe that the base of the Centro Democrático party is made up of those supporters I would think.

Cameron Wilson: Yes, and I think that his approval ratings upon leaving office were 75-80% something like that, and now they’re down the 30%, and he might not care, people in this party might not be that bothered by his slide and approval ratings but I think part of that goes back to what you’re saying is experience of condensing the 80’s and the 90’s and even before that, is sort of fading into memory for people who are my age or college students, you know, and as long as the average age of the electorate for the country stays around 30, that’s not going to get reversed.

Finance Colombia: How is President Duque handling the coronavirus pandemic? He seems to be butting heads with Bogota’s Mayor Claudia López.

Cameron Wilson: In comparison to his counterparts in my country and  other parts of Latin America  You might say it is a admirable job in the sense that president Bolsonaro in Brazil  is being willfully ignorant of the science, and some people would say that AMLO (Andrés Manuel Lopez Obrador) in Mexico has been the same way, and other people would say that president Trump is also adhered to that: “let’s not listen to experts or the science and also not recommend social distancing.” But at the same token, most of the earliest and strongest calls for lockdowns, for social distancing, for masks, were from Colombia’s mayors and not from president Duque, so in comparison to them it looks like he’s a little bit slow, and a little bit reckless even, but compared to his counterparts out of the country you might say “oh wow he’s sort of responsible, he’s been advocating for wearing masks, he puts his hand sanitizer out on his desk every night. So, he’s doing an okay job I suppose, to mention the crisis for the managing the health effects if you will, you know that people would argue about his economic response but that’s a separate question.

Finance Colombia: It’s an interesting phrase, “sort of responsible.” I don’t know if they want to make it a campaign phrase, but it’s interesting, I think that was seen doing an OK job until the COVID Fridays, as they were calling the “Dias Sin IVA” down here, the day without sales tax, especially the first one that turned into a fiasco, and stores were being shut down for overcrowding and then a resultant spike in the cases and now we see that we’ve gone from and a thousand deaths in over ten thousand deaths in the space of a month.

Cameron Wilson: I saw the images were from that, I guess there was that day and another one two weeks later and the footage was shocking, you know?

Finance Colombia: It was. It left an impression, economically obviously he’s under a lot of pressure, the economy is contracting, Colombia being a tourist country, tourism is completely shut down, the restaurants are closed except for carryout or delivery, the airlines, Avianca is obviously in bankruptcy as is LATAM, there are with two small exceptions there is no passenger air traffic, so he is under a lot of pressure I think, but a lot of people are saying the Claudia Lopez is already campaigning for president based on her response, and I don’t know if that’s honest, or cynical, or both, but she does seem to be a lot less conciliatory than she was during her campaign, and as the Mayor of Bogota she certainly does have a considerable megaphone. The Vice President, Martha Lucia Ramirez is not having so good of a year, is she?

Cameron Wilson: Well you said, I used an interesting phrase, “sort of responsible?” Well, “not having such a good year” is an interesting phrase in that context, yeah! On one hand, one thing that sort of dragged her down a few months ago was this revelation that she paid bail for her brother in Miami back in the 90’s. Her brother was convicted of some drug trafficking, I think it was heroin, and it was sort of a small amount, I want to say that there was like $150, (Editor’s note: She paid $150,000 bail for her brother) so it wasn’t—it didn’t rise to the scale of some corruption, but on the other hand, nobody knew it, it wasn’t in the public sphere until this time, and she’s had sort of a long career, right? She’s a little bit older than Duque, she’s been in the public eye for quite a while, and another thing that happened, sort of recently that if her very close followers of the country would have noticed, she threatened to file a lawsuit against Insight Crime.

Finance Colombia: She did bother, she filed not just a civil lawsuit, she filed criminal charges against Insight Crime in June, but Jeremy McDermott instead of going quietly, went public with the charges, which were widely condemned by journalists and human rights organizations, and I would imagine the many foreign governments that fund Insight Crime as well to be completely honest.

Cameron Wilson: And she’s backed down since then, right?

Finance Colombia: She’s retracted, but the thing that’s amazing is that even though she filed charges, her husband admitted the facts of McDermott’s story, which was interesting. That seemed to be a dumb move politically, because, it’s not that he published anything false. That’s not even a judgment call, her husband confirmed that they did the deal with this Memo Fantasma, you know this paramilitary narcotrafficker guy, and the interesting thing is that…Now, the Insight Crime reporting never accused the vice president or her husband of doing anything illegal or even unethical, they bought a lot from some guy, and you know, if you buy a house, you don’t necessarily know much about the people who sell you the house, right? It’s kind of surprising that they handled that so badly politically, but I think that what came to light is the kind of pressure and bullying that can take place when people are used operating in impunity, and don’t expect that scrutiny, right?

Cameron Wilson: Yes.

Finance Colombia: I notice that you guys listed as a potential candidate Pacho (Francisco) Santos, you think he might actually run?

Cameron Wilson: I think before the trouble that he found himself in last fall, I think you would have said that for sure, he would have run. To be clear he found himself in hot water when a recorded conversation from a restaurant in DC was made public by a Colombian newspaper, and he said some unflattering things about the US State Department, which might compromise his role as the main go-between Colombia’s government and the US, and so, to clarify, before that, which was last fall you would have said “yeah, he’ll for sure run” and he’s had an ambition to that for a while, and he’s been involved in Colombian politics for a while, and he lives in the right circles, you know, it’s quite a small group of people.

Finance Colombia: Yes.

Cameron Wilson: At the top of Colombian politics to begin with, and then, you know, amongst the different segments: Right, Center-left, Center, Center-right, you know the circles are even smaller and part of it is that there’s so few families and that the men go to the same high school in Bogota. So, you know, so he sort of checks all the boxes, and he for sure has still an amount of ambition, and I think that to a lot of observers, the question would be: “well what does Uribe want?” Basically who does Uribe think are the most attractive candidates for his party the next go round…the party has a history of pushing forward a few candidates, and sort of seeing which one happens to capture the imagination of the electorate that year, and for sure Pacho Santos would be in that conversation, if you will, but it’s a little bit hard to say that he, for sure, isn’t the guy.

Finance Colombia: You know, another possibility that you guys floated that really intrigued me was at Mauricio Cardenas, the former Finance Minister, who is very well respected and even liked, but he hasn’t—and maybe that this is by design, or by his personality—but he’s never really come across as a politician and that’s not to say he’s not a political operator, but he, as far as I know, he’s never held political office, he’s more of a technocrat, isn’t he?

Cameron Wilson: He’s an economist basically. There is one argument, or one school of thought that a technocrat might be able to steer clear let’s say of some of this, like tug-of-war politically back and forth, and some of that might be why a candidate like (Sergio) Fajardo is like “oh, I’m just a professor” you know, “I’m not cut from that same sort of cloth,” and so there’s an argument that perhaps would be able to navigate that dynamic a little bit better, and since he hasn’t really played that game to this point, he hasn’t spent his career criticizing the opposition that if the party, if the sort of conservative side of Colombian politics wanted to nominate a candidate, one that wasn’t so hard line one that might capture the middle of the electorate, he may be a worthwhile person for them to put forward.

Finance Colombia: I think that the hard part for him, not being a politician, is you can run into the same dangers of inexperience: Look at Daniel Quintero, here in Medellín, the mayor who seems like a nice enough guy but he’s already gotten himself in some hot water, making some politically inept moves.

Cameron Wilson: There’s some truth to that in the hard choices that they might advocate, you know, and I think that debate you’re talking about, there is a little bit playing out right now within mainstream economics. There’s a lot of what would be formerly like radically left economic ideas that are being connected in the policy right now, universal basic income, you know, debt levels that scare people, maybe less than they would have been in  the past, but certainly it’s like unknown territory and it’s kind of frightening  for some people who have a hard time looking past what they were taught if they were going to University of Chicago 30 years ago. And yes, that tug of war is going on within economic trade now. I mean, is it irresponsible for governments to keep subsidizing wages, implementing layoffs, even if it runs up the national debt? Some economists would say “just do it, press the button and go for it,” you know, “what are we so scared of, the only thing worse would be not doing anything.”

Finance Colombia: Everybody loves (John Maynard) Keynes and nobody loves (Herbert) Hoover in a recession, right? 

Cameron Wilson: Right, yes, so that debate of whether economists are always bringing bad news or not is sort of like what’s playing out right now in the news every day.

Finance Colombia: Good point, good point, so, where go from here? We’re a little bit past, I think halfway in Duque’s term or in the middle of a covid-19 coronavirus pandemic that’s hitting Colombia hard, other countries worse, but it still is significant here. The economy is contracting because of this and the economic contraction exacerbated by the collapse and demand for petroleum, well below Columbia’s lift cost, that’s to say the price to get out the ground into the refinery or into the pipelines is higher than the actual cost of petroleum right now, and we don’t see that bouncing back anytime in the short term, and that’s an important source of revenue for the Colombian government, so it leaves the president with fewer levers to pull.

Do you see him in the second half of his term distancing himself from his political patron Alvaro Uribe or will he cement a legacy as a faithful acolyte and beneficiary of his patron?

Cameron Wilson: Yes, well, the fundamental question is to sort of steer the country through this crisis, it is going to require him leaving behind some of the main policies of the Centro Democrático and a big part of that is the sort of commitment to fiscal responsibility, that I sort of alluded to just now, in the way the economists might be fighting with each other about what to do, so if he’s to adhere to this, you know, sort of more orthodox fiscal management, that is a tenure of his party and his finance minister adheres to, and that’ll be him, you know, being loyal to Uribe, to Uribismo, but also letting the country flounder a little bit longer, and people might think it is ideal, and if he is to continue to lift public spending and extend subsidies that have been given to people, extend the subsidies that have been given to businesses, that’ll be him moving towards the center and shepherding the country, towards what most observers would say is a more responsible way, and our expectation is that he’s probably not going to do that. So far in his presidency he’s been largely loyal to Uribismo. Part of that has been close ties to the business community, closer than some people might feel good about, and you can see that in how he opened the economy for two days for everybody go shopping in the middle of this pandemic, and part of that commitment has also been in this idea to sort of drag your feet, slow down the progress of the peace accord, so he’s been loyal to this point and therefore we don’t have a lot of reason to expect he’s going to move towards the middle.

Finance Colombia: Interesting, and I think that that might be the biggest danger to his legacy, is the post peace accord implementation, and whether you like it or not, whether you agree with it or not if you look at the increase in danger for social leaders for indigenous Colombians and people that are not even necessarily political actors or not even necessarily natural political opponents. I think it would be hard to argue anything other than negligence on the part of the government to protect non-combatants and even if you’re: Let’s suppose you’re anti-FARC, or which, I think a lot of people except for the FARC are anti-FARC, let’s suppose you’re anti-peace accords but then you have members of the FARC who say “Ok, we’re going to leave the FARC or we’re going to not be combatants anymore, we’re going to stop,”  and the government says “okay, we’re going to put you in this place and get you reintegrated in society, but then they go and get massacred, that doesn’t really—even if you don’t like the peace accords, if you don’t like the FARC, the last thing you want is people to go back and rearm themselves, so I think it’s kind of beyond comprehension other than just incompetence, or are there some kind of designs behind purposefully letting these people get slaughtered? I mean it would seem that the only reason behind not protecting people is to drive them back into arms.

Is it just negligence or is there a political motivation behind the foot dragging, not necessarily to implement faithfully every little bit of the peace accords because that might even be too much to expect politically, but in the negligence, or the apparent negligence and the lack of production in the increase in danger to even non-political non-combatants, indigenous leaders, social rights, people who are advocating non-political things?

Cameron Wilson: I think it is both of these things, I think with regards to the FARC, there’s no willingness to follow through on the provisions to provide them with the successful reintegration, and so it that looks like in the short-term is to build resettlement camps that have, schools and reasonable health care, and it took them a long time to get running water in a couple places and also put the camps in places that are safe, that aren’t close to still violent groups of people, and to provide them with protection, so there’s clear negligence to not follow through on all those promises.

With regards to the violence, the insecurity that’s confronting people, that’s affecting people who are not part of the FARC but who are in rural areas, who are agitating for clean water, roads, schools, electricity, basically an extended, expanded state presence. Part of the problem there is, I think, a bit of negligence, a little bit of, well, I think this is going to start to benefit participants in some kind of ways, but also another part of it too is this is the sort of long and hard and boring and challenging work that it’s going to take 10 to 15 years even in the best-case, because these areas are so remote that to expand the state presence requires a tremendous amount of patience, and if there’s one thing Colombia is lacking, even between a lot of the larger cities is good transportation, it’s sort of a weak spot of the country if you like.

Finance Colombia: True.

Cameron Wilson: That’s sort of like the long and hard and dirty work that’s going to take a long time no matter what but they’re not helping, they’re not sort of pushing that as aggressively as they could be, and in the meantime, while the state presence is sort of lacking in these areas, you’re talking about how social leaders, broadly speaking, people agitating for improvement in their security and economic conditions in all these areas, they’re sort of out in the wind so to speak without any help from government or without any protection and 100% it’s negligence.

There’s nothing else than negligence, that’s sort of leaving them so vulnerable, and in some cases more vulnerable during the lockdown because if they were targets before but maybe they were evading their attackers or evading pressure, this lockdown made it frighteningly easy to know where people were, and that’s just to say that they’re putting up with all kinds of threats and pressure and violence that they shouldn’t have to and I think that the government has no good reason to allow that to continue or not to make more efforts to prevent it.

Finance Colombia: Insightful. One last question, you were a professional PGA golfer. Is there any good golf in Colombia?

Cameron Wilson: I didn’t expect to get asked that! Yes, there is. One of the sort of unfortunate parts of golf in Latin America is that it happens to be confined to the very highest strata of society, and golf is sort of an affluent game all over the place but there’s public golf all over the U.S., it’s accessible, maybe not accessible enough but it’s accessible and in Colombia there are just private golf courses, and so as nice as they might be, and I’ve been to a few of them in Bogota, Medellin, and as beautiful as they might be, one of the things that I wish was different about golf in Latin America is that it was accessible to everyone. But you know, maybe that will change someday, I’m not hopeful about it but maybe it’ll change.

There are some beautiful clubs, and I think the consensus would be that the best one in Bogota would be called Los Lagartos, which has two golf courses in the middle of the city, and then another popular spot is called Country Club de Bogota, and that’s a cool place with a couple of nice golf courses and some cool amenities as well: bowling alleys, squash courts, clay tennis courts, a soccer field. That’s kind of an interesting spot with lot of other fun activities, but yeah, I wasn’t expecting to get asked that, so thanks for digging up my past!

Finance Colombia: No, I’m a tennis person myself, I’m not a golf person, but being born and raised in the same hometown of Jack Nicklaus, he’s just a giant and actually his firm designed the Karibana Golf Course up in Cartagena. I’m not really a golf player so I haven’t played the course, but I’ve been to Conrad Karibana by Hilton Resort and it’s a really lovely facility. I was there right before the pandemic started and I hope to go back reasonably soon, as soon as it’s safe to maybe play some tennis, but I was really impressed with their facilities, I don’t know if you played that course but it looked really nice.

Cameron Wilson: In my prior life, when I was playing golf professionally I wound up going to Colombia four times and I played an event at TPC Karibana, when it was brand new, in the spring of 2015, I think it was maybe like March of 2015, and it was beautiful, it’s an amazing spot and hopefully it’s a place where Colombians can go to enjoy some of their time, well they already go to Cartagena all the time, but hopefully it sort of adds one more thing to the city that will attract people and also it’s a really easy place to get to for Americans, it’s a couple hours from Florida, and you know, if anybody has hesitations or some concerns about going to Latin America and going to Colombia, which they shouldn’t by and large, but that’s a really great introduction to what can be so great about spending some time in the region.


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