If there is one thing that the transition from a conservative government to a left-wing one is about, it is the strength and presence of the State. On several fronts: directly providing services, better regulating markets, confronting large conglomerates, generally directing the economy. Gustavo Petro has sought to draw that line for Colombia in the two long years he has been in office, but he had lowered the tone with the legislative recess and his call for a national political agreement to reconcile his new reforms. However, in the most recent days he has taken it up again. In less than a week he has given fights that show him as a defender of public hospitals, as a promoter of a State that defines all the rates of the electric market, as a defender of irrigating small businesses and families with money.
The renewed discourse is clear. On Sunday, Petro dedicated a speech to setting out his position on high energy rates, an issue that has come up again and again as president. “Colombia is the only country in Latin America where the cost of energy is not regulated by the State. Listen: the only country in Latin America. Companies can set the price of energy according to the market, which allows them to speculate,” he said in front of the cameras, pointing out the need for the State to intervene. He explained that the goal is not only to help families and companies, but to attack what he sees as an oligopoly. “Five companies control 70% of energy generation in our country. It is a business run by a few, who have the power to alter prices in their favor. In addition, some of these companies have shared owners. They are the same people in charge of the same companies.”
Untying this knot is not easy. The price of energy for the majority of final consumers, such as families or small businesses, is defined by a formula determined by the State, not what large consumers pay, which they can negotiate, nor what the different companies in the sector charge each other, ranging from electricity generators to the marketers who sell it to users. The body that determines how the amount paid by households is calculated is a semi-autonomous body called the Energy and Gas Regulatory Commission (CREG). Petro has sought to assume these functions to modify the rate, but the Council of State rejected the attempt, finding that it could not override a law. In any case, the current formula is based on the costs of each marketer for energy, such as what they paid when buying it or what it cost to transmit it. And since these costs are defined by supply and demand, in the end the State does not determine the entire value. Petro thinks that it should do so, although he has not clarified how to achieve this.
Something similar occurs with his proposal that the State partially define which sectors banks can lend money to. He developed the proposal especially in his intervention at the economic reactivation forum held two weeks ago in Manizales, in which he explained what a forced investment is. “It is taking a percentage from public savings in banks to allocate it as cheap credit, with a small financial cost to production activities, as has been done for decades with agriculture.” Without a more detailed written proposal, the amounts, sectors or mechanisms involved are still not clear.
Despite this lack of definition, the idea has been the subject of criticism from bankers and businessmen. According to the report, The Empty Chairthe government and the bankers are cooking up a proposal to replace it with a voluntary program by the financiers to channel up to 50 trillion pesos (12.5 billion dollars) to certain companies and sectors. But even if this counterproposal succeeds in getting the money to small and medium-sized companies or to what the government has called the popular economy, it does not reflect Petro’s idea, which is precisely that the State should decide, even if it is in small amounts. “Now they will say that it is not good for the State to get involved in the allocation of the public’s savings resources, because it is better for the banks to do it, a neoliberal thesis,” he said in his speech in Manizales, anticipating criticism of the concept of forced investments and, above all, of State intervention.
A third action by the president to reaffirm his defense of the public sector is aimed less at expanding the State’s reach in the economy and more at reiterating that position, to remind that he is wearing that shirt. It is about the clash with the mayor of Bogotá, Carlos Fernando Galán, over the future of the buildings of what was the San Juan de Dios hospital, for decades the main hospital in the city and abandoned since the beginning of the century. The conflict is as complex as it is strange, as it has led the two politicians elected with the most votes in the country to confront each other over an apparently local and technical matter, with facets of urban planning and cultural heritage. In short, the buildings belong to the Bogotá District and are administered by the central-eastern health subnetwork of Bogotá, a district entity that was intervened in May by the Health Superintendency, which depends on the Executive. In 2020, the subnetwork hired the Spanish company Copasa to create a new hospital there and preserve some buildings built at the beginning of the 20th century, but the president has indicated that he should protect them all, including more recent ones. The inspector who currently manages the subnetwork, appointed by the Superintendency, annulled the contract last week, and the president argued that this does not protect the assets contained in a building constructed in the mid-twentieth century.
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But not only that. Petro has also said that this is a decision to protect public health services, since Copasa would not only do the work, but would also equip and operate the hospital for five years. This Monday, the president took advantage of a medical publication to reinforce his point. “According to a study by the prestigious scientific journal The Lancetthe privatization of public hospitals, a model that was followed in Bogotá copying Madrid, has made the quality of patient care fall all over the world. That is what they wanted to do with San Juan de Dios,” he said on his popular X account. In this case, unlike forced investments or electricity rates, the Government has already made a decision. Its impact is more local, but symbolic: as mayor of Bogotá, one of the obsessions of the current president was to revive the century-old hospital; as president, the health system has been one of his great fixations. Due to his failed health reform, he broke his first and broad legislative coalition with centrist and liberal sectors, he made a cabinet crisis to remove his most visible moderate ministers, he sacrificed his legislative initiative for a year. For months it was the main public debate in a country that faces drug trafficking, insecurity, deforestation or deep inequality.
The size of the government’s commitment to the public sector will be largely defined by the new text of the reform, which the government plans to present this week. The Minister of the Interior, Juan Fernando Cristo, a representative of that breed of moderate ministers, has sought to pave the way for the process of that and other projects with meetings with all the parties that would bring the idea of a national political agreement to the legislative front. Several of those parties rejected the reform in its previous version, in which the State expanded its functions in the administration of resources and the assurance of health care for Colombians, and the majorities in Congress depend on them. With the proposal, it will be clear to what extent Petro will be able to balance the flag of the public sector with that of political agreements.
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