Petro facing an economic dilemma: radical change or necessary stability?

The government of Gustavo Petro finds itself at a crucial moment, marking the midpoint of its four-year term in an economic context that, while showing some signs of recovery, remains shrouded in uncertainty and tension. Amid a incisive speech and a rhetoric of change, the president has challenged the old economic consensus that has prevailed in Colombia, generating a climate of friction with the institutional apparatus that manages the country's economy. Jorge Iván González, former director of the National Planning Department, has stated that Petro's words can nullify months of technical work, reflecting the complexity of governance during this period. Despite the difficulties, moderate hopes are emerging. Economists like Munir Jalil highlight that the country could end the year with GDP growth around 2%, which could be seen as a sign of recovery in the face of adversity. However, the question of whether the government has done enough to stimulate this growth remains unanswered. Jalil suggests that there is a duality in Petro's administration, where criticism of the traditional economic model contrasts with the need to maintain certain structures to ensure fiscal stability. The government has faced significant challenges, including the debt accumulated from the health crisis and pressure to address the social and economic needs of the population. With a projected expenditure of $9 billion next year just for debt servicing, the fiscal situation is becoming unsustainable. González warns of a "madly unbalanced asymmetry" between the budget allocated for investment and that allocated to cover debt commitments, raising serious doubts about the viability of the current economic policy. One of the most controversial points has been the management of hydrocarbons, a traditional pillar of the Colombian economy, which has been subjected to a course change under the premise of "energy transition." The decision to halt oil exploration contracts has raised concerns among investors and generated criticism about how this could affect investment in the sector. The perception of distrust in the business environment has intensified, particularly among sectors that have traditionally played a crucial role in the national economy. Petro's discourse has generated a short circuit between his administration and the private sector, which feels threatened by an approach it considers excessively statist. This distrust has extended beyond the energy sector, affecting the government's relationship with key industries that depend on private investment to thrive. The inability to establish a constructive dialogue has led to paralysis on several economic fronts, which in turn has contributed to a notable decline in private investment. The 24% drop in private investment in the second quarter of this year reflects a state of anxiety and distrust that permeates the economic environment. This cannot be solely attributed to the Petro administration, but is also a residual effect of a broader economic cycle affecting the entire region. The lack of major infrastructure projects and uncertainty in economic policy have fueled this situation, suggesting that a change in strategy is needed to revitalize the economy. In parallel, the poverty rate has shown a slight improvement, which Petro has presented as a significant achievement. However, experts warn that, despite the decrease in poverty indicators, victory cannot be declared. The reality of three out of ten Colombians living in precarious conditions remains alarming and reflects the complexity of the structural challenges the country faces. Additionally, criticism of subsidy management and ineptitude in targeting public aid underline the pending work the government must address. Tax reforms, although initially received with consensus, have begun to be challenged even within the ruling party itself. This indicates a lack of clarity in the economic growth strategy and how to address the country's fiscal needs without compromising development. Petro's constant incendiary statements, along with his confrontations with the private sector, have distracted attention from critical needs such as the implementation of the Universal Income System, which promises a better distribution of wealth. As the country moves toward the third year of his term, Petro's ability to build a bridge over the distrust that has settled between his administration and the private sector will be crucial. The economic reality demands a more inclusive approach that recognizes the role of the private sector in generating employment and social welfare. The challenge lies in finding a balance between necessary reforms and the need to maintain a favorable environment for investment, which is fundamental to ensuring long-term economic sustainability. In conclusion, the government of Gustavo Petro stands at a crossroads, where the challenge of transforming an obsolete economic model confronts the need to maintain stability and trust. The coming months will be decisive in determining whether progress can be made toward a model that not only respects the demands for change but also articulates the voices of all economic actors in the country. The history of his administration is being written in a context of tension and expectations, and only time will tell if a path toward a more promising future for Colombia can be found.