In recent years, the left has won several presidential elections in Latin America, a phenomenon that has been nicknamed the “Pink Wave”. However, it has barely begun and this trend is already showing signs of wear and tear – proof of this is the difficulty these governments face in approving the reforms they are proposing.
The most recent case occurred in Chile, where the Chamber of Deputies last week rejected a proposed tax reform presented by the government of Gabriel Boric.
The leftist president planned to raise 3.6% of GDP over four years through income tax restructuring, reducing tax breaks, applying a new mining royalty and tax fixes, with the aim of funding his environmental and social agenda.
Two days later, Boric announced the change of five ministers, repeating a cabinet restructuring that had already taken place in September, after the population rejected a proposal for a new constitution for Chile in a referendum.
Considered “excessively progressive” by the British magazine The Economist, the text had been prepared by a constituent commission with a leftist majority elected before the current president – however, Boric supported the reform. A new constituent process was subsequently initiated.
In Colombia, the Gustavo Petro government managed to approve a tax reform in November that increased taxes for those who earn more, but its proposals for health, labor and social security reforms are the target of massive protests from the population and even generate internal divergences.
At the end of February, the then Minister of Education, Alejandro Gaviria, was sacked after criticizing health care reformwhich aims to strengthen primary care and bring medical care to the so-called “abandoned territories”.
A letter signed by Gaviria and two other ministers (who remain in the government), which was leaked to the press, had pointed out problems in the health reform proposal, constitutional issues and its impact on public finances, among others.
The most extreme case of the failure of the left in the region to attempt broad reforms was that of former Peruvian President Pedro Castillo.
In December, he attempted a coup d’état, announcing the dissolution of Congress, the establishment of an “emergency government” and the call for elections for a new Legislative branch, with constituent powers, which should approve a new Magna Carta within the next month. maximum nine months. Castillo was removed and arrested on the same day.
In 2020, the Argentine Senate approved a judicial reform proposed by President Alberto Fernández that would create dozens of new federal courts, with the main objective of diluting the power of judges based on Avenida Comodoro Py, in Buenos Aires, responsible for cases of corruption.
In the capital alone, there would be 23 new federal courts. However, the project did not advance in the Chamber and lost its parliamentary status.
In addition to tax reform in Colombia, a rare recent victory for the left in this area was a reform promoted by President Andrés Manuel López Obrador that will compromise the functioning of Mexico’s electoral body, by reducing your budget and modifying your assignments. Approved by the Mexican Legislature, the measure is being challenged in the Supreme Court.
reasons
This difficulty for the Latin American left to implement its reform agenda has three main explanations.
The first is the erosion of these governments: under Boric and Fernández, Chile and Argentina face high inflation (extreme, in the case of Argentina) and economic slowdown, and Petro is criticized for his peace negotiations with the guerrillas and his son is being investigated due to a complaint that he would have received money from a drug dealer for his father’s election campaign.
The second explanation is the very content of the reform proposals, considered in many cases radical: analysts consider that these projects are being presented in a hurry (Boric has just completed a year in government, and Petro took office in August) and without taking into account divergent points of view, especially from the productive sector.
“It is a sign first and foremost of the stubbornness of the government, that it is not willing to really sit down and talk; in the Finance Commission, for a long period there was virtually no flexibility,” said conservative deputy from the Independent Democratic Union (UDI), Juan Antonio Coloma, shortly after the rejection of tax reform in Chile.
Christian Aste, president of the Tax Commission of the National Chamber of Commerce of Chile (CNC), said in an interview that a tax reform in the country would require “consensus from all sectors”.
“In our opinion, the country needs stability, especially if we want to encourage investment, which is why the rules cannot be changed every time a new government takes office,” he criticized.
In an interview with El País, Colombian economist Jorge Restrepo cited the third factor that has been preventing the left from approving its agendas: the lack of sufficient support in Parliament. “We realized that this government [Petro] has less power than previously thought. The reforms will be much less radical and fewer of them will be approved”, he projected.
In an article in the Colombian newspaper El Espectador, columnists Mauricio Cárdenas and Allison Benson Hernández warned that excessive proposals for reforms generate instability and can drive away investment.
“The avalanche of reforms has generated uncertainties that could paralyze investments in the country [Colômbia] just when they are most needed. The uncertainty has been reflected in several ways and one of them is the devaluation of the peso, much higher than the [das moedas] from other Latin American countries, including those with left-wing governments,” they wrote.
“In the context of uncertainty that the reforms have generated, the only thing that seems certain is that they generate huge fiscal risks, at a time when, in addition, the government has blocked important sectors that generate tax revenues, such as mining and energy”, highlighted Cárdenas and Hernández.
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