By most measures, President Juan Manuel Santos has had a triumphant first five months in office. On his watch, Colombia has made some tangible progress on its two most politically salient challenges, unemployment and crime. Both the official urban and overall unemployment rates have fallen about one percentage point each, from over 12 percent and 11 percent a year ago, respectively. In Medellin, Colombia’s second largest city and arguably its most vulnerable to large-scale mafia warfare, murder rates have fallen significantly.
On the international front, Santos has also repaired relations with Colombia’s neighbors after years of tensions that hurt trade and threatened to lead to war. The left-leaning leaders of both Venezuela and Ecuador are now collaborating with Santos to restore trade flows and attack regional drug trafficking networks. Unsurprisingly, Colombia’s president is finishing the year with approval ratings that, hovering between 70 and 90%, often exceed those of his wildly popular predecessor, Alvaro Uribe. Both Santos and Colombia have much to celebrate this holiday season.
On the other hand, the past few weeks have also offered sobering reminders of the country’s longstanding challenges. When he took office in August, Santos inherited an enormously successful but deeply flawed and fragile security policy. Maintaining the relative peace and safety Colombians have enjoyed over the past eight years required significant changes to Uribe’s guerrilla-focused approach, including adapting to leaner and more amorphous drug-trafficking groups and focusing on the social roots of the country’s decades-long conflict. Santos has aimed to do just that, arresting hundreds of members of neoparamilitary drug gangs and proposing an ambitious land reform program aimed partly at compensating Colombia’s 3-5 million internally displaced persons.
The Santos government’s second inherited challenge is the fiscal deficit. At over 4% of GDP, Colombia’s deficit has become a hindrance to long-term investment and growth. Uribe, a single-issue president focused on defeating leftist guerrillas, paid little attention to this problem, partly because gains in security led to short-term booms in foreign investment and tourism that obscured the gloomy fiscal picture. Under Santos, Colombia’s economic policymakers have been fixated on reducing the deficit and hoping that the major credit-rating agencies will upgrade the country’s bonds to an investment-grade rating.
Third, Santos also inherited a deeply corrupt government. Traditional graft and misallocation of public funds are rampant at the municipal and departmental levels. Moreover, Santos’s own supporting coalition is full of politicians with shady links to business leaders and drug lords. Scandals centered on human rights abuses and collaboration with drug gangs have touched nearly every branch of Colombia’s military and security apparatus. Investigations into abuses by top Uribe officials have also led to some highly public and highly distracting confrontations between judicial officials, government critics, former Uribe aides and even the former president himself. On Twitter, in interviews and behind the scenes, he has lashed out at his political opponents and even helped his former subordinates take refuge from the law both at home and abroad. This has pit Santos, Uribe’s chosen successor, in the uncomfortable role of having to defend Colombia’s institutions from his predecessor’s slander.
The end of 2010 also brought an immense unexpected challenge. Unprecedented levels of rain have flooded large swaths of the country, affecting at least 2 million people, most of them poor and many of them victims of the armed conflict. Entire towns have disappeared, mostly in flat plains near the country’s Atlantic coast, and the rain has absolutely devastated basic infrastructure in some heavily populated areas. The total damage has been estimated at US$5.3b, about 2 percent of Colombia’s GDP.
All of these four key challenges compound one another. The catastrophic effects of this recent rainy season, which disproportionately hurt impoverished people in badly run municipalities, have revealed corruption and inaction by local governments, deep problems in Colombia’s infrastructure and vast gaps between rich and poor. Indeed, the judiciary is now investigating local officials whose negligence or wrongdoing may have contributed to the flooding catastrophe.
The flooding has also set back Santos’s ambitious social and victim compensation agendas. Thousands of flood victims will need assistance to resettle and reorganize their lives. Santos’s goals to compensate victims of armed conflict and reduce inequality were already at odds with his plans for fiscal austerity. With the added cost of flood-related reconstruction, the government will have to make some tough choices about its priorities. Barclay’s Capital, an investment bank, noted that the Chilean government shouldered only a third of the costs related to that country’s recent earthquake under more comfortable fiscal conditions than Colombia. In other words, Santos is unlikely to cover more than a tiny fraction of the damage.
The president has earmarked US$533 million, about 0.2% of GDP, for flood-related reconstruction in the 2011budget. NGOs, private donors and foreign governments, including Ecuador’s, have also pitched in. This is only a first step toward dealing with the full cost of the flooding and, given the depth of corruption in many local governments, it is hardly guaranteed that all of these funds will reach the intended beneficiaries.
Over the next twelve months, the Colombian government will therefore have to balance between several competing but fundamentally important priorities: flood reconstruction, victim compensation, social justice and fiscal austerity. In the meantime, it will have to eradicate corruption to make sure its agenda is executed quickly, effectively and fairly. In the meantime, of course, Santos will likely take care not to alienate Uribe and his top officials too quickly, in order to avoid a costly and distracting political row. In other words, Colombia’s new leader does not have much to look forward to.
Colombians traditionally celebrate the New Year by symbolically leaving the problems of the past year behind, in some cases burning a personification of it in a bonfire. By this time next year, Santos may want to do just that.