Peru and Colombia: signs of a leftist turn?

The recent months have been extremely complicated in Colombia and Peru. In the former, protests in opposition to a proposed tax reform escalated, culminating in violent clashes between the police and protestors. During the clashes, more than fifty people died and thousands were injured. Several human rights organizations denounced police brutality and the UN High Commissioner on Human Rights spokesperson declared to be “deeply alarmed” by the events. Capitalizing on the protests and discontent, leftist leader Gustavo Petro is gaining ground with voters as he targets next year’s presidential election.

In Peru, the country seems unable to reach political stability since the corruption crisis hit its political elite in 2017. After losing the election in June to Pedro Castillo, the conservative party led by Keiko Fujimori has denounced fraud, failing however to provide evidence to support this claim. The victory of Castillo in Peru and the growing popularity of Petro in Colombia could be a signal of a broader leftist revival across Latin America.

Colombia: towards increased polarization

Colombia is currently facing the highest rate of COVID-19 cases since the beginning of the pandemic. The economy has been struggling, negatively affected by external and domestic factors associated to the global pandemic. In 2020, its GDP decreased by 6.8% while unemployment rocketed up – from 9.1% in 2018 to 15.4% in 2020. Despite the continuing emergency context, Iván Duque’s government proposed a tax reform in April that aimed at containing the national debt, which sharply increased after borrowing heavily during the first waves of the pandemic, and reassuring investors. Colombia’s stimulus represented 4.1% of its GDP in 2020, in line, however, with the regional average of 4.6%. Even though Colombia still enjoys a quite low national debt – 52.32% of its GDP in 2019 -, Duque’s government is concerned that the country could lose its investment grade status with relevant economic consequences.

The tax reform was intended to raise around five billion euros over the coming years. Protestors accused the plan of being a regressive tax reform that would negatively hit the poor and middle classes. In particular, the value-added tax (VAT) base increase was highly controversial as it was aimed at a number of basic consumer products – like eggs, coffee and milk – and on energy, gas, water, sewage and other public utilities of which rates would have risen from 16 to 19% percent. Colombians are nevertheless dramatically suffering from the negative effects of the crisis. The share of poor people increased from 35.7% of the population in 2019 to 42.5% in 2020, with 15% in extreme poverty.

The protests succeeded in making the government revoke the tax reform bill but the discontent has deeper roots. Protestors are calling for better public health and education systems, against the slow implementation of the peace agreement and against the historical inequality persisting in the country. Colombia is highly polarized as shown by the rejection of the peace referendum by only 1% of the vote in 2016 and the growing political dichotomy between leading parties. Since 2016, more than eleven hundred union leaders, peasants and Afro-Colombian leaders have been killed, revealing how the peace agreement is failing to reconcile the country.

In this context of political instability and economic crisis, the leftist opposition parties are gaining ground. According to a recent poll, Petro, a former M-19 guerrillero who also lost the election against Duque three years ago, would win if the elections were held tomorrow. The former mayor of Bogotá increased his support from 25.9% in August 2020 to 38.3% in April 2021, capitalizing on the wave of public discontent against Duque’s tax reform. There is, however, still a long time to overturn this forecast if, even though Duque will be prohibited from running in the upcoming election due to term limits, the conservative and right-wing parties find a credible candidate.

The implications of Petro’s current popularity reach beyond Colombia. Bogotá has been historically the closest ally of the US in South America, being a major recipient of US military aid as well as a large buyer of US military equipment. Since 1999, the US administrations have strengthened their security-based bilateral relationship with Colombian governments.

The “Plan Colombia”, of which Joe Biden was the point person under the Clinton administration, has been at the core of the US-Colombia relationship. While South America experienced the so-called “Left-Turn” (or “Pink Tide”) at the start of the 21st Century, Colombia was the keystone of US foreign policy in the region. Petro has been challenging this security and military based paradigm. During the last electoral campaign, he openly advocated to radically change the US-Colombia relationship to move away from military aid towards a multi-sided cooperation centered on (unexplored) fields such as climate change.

Peru: in search of stability

Peru’s latest election showed a highly polarized country. Castillo won against Fujimori by a very tiny margin – around 44,000 votes. The two candidates were at the opposite side of the political spectrum. Even though Fujimori demanded ballots to be recounted because of unproven claims of fraud, the US praised the election as “free, fair, accessible and peaceful”. The winner is a union leader who ran with a leftist and nationalist platform. Fujimori, daughter of former President Alberto Fujimori – who is in prison for crimes against humanity and corruption -, based her campaign on pro-market policies and the strong public response to insecurity.

The recently elected president has many challenges head. Since 2017, Peru has been paralyzed. Its political establishment has failed to build new credibility after corruption scandals brought down its most notable officials. In the meantime, the country has been greatly impacted by the COVID-19 pandemic with deep economic and social consequences. Peru’s infection rates are among the highest in the region, as are its death per capita rates. Its GDP decreased by 11.1% in 2020. These challenges come on top of existing historical issues of inequality and poverty, which have remained unsolved. Despite years of extraordinary growth, 45% of rural Peruvians remain poor.

Due to the high fragmentation of the Peruvian political system, to govern and promote his political agenda, Castillo will need to form coalitions within the Congress. Castillo’s party and its ally have only 32% of the seats, Fujimori’s party and her allies, instead, have 45% of the seats. It is not clear, however, how Castillo will frame his platform. During the electoral campaign, the he distanced himself from the extreme positions previously expressed by his party. How he will govern (and for how long) remains a question mark.

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What is happening in Peru and Colombia could signal how the current crisis, combined with historical and unresolved issues of inequality and poverty, might shape the region’s political landscape. Twenty years after the beginning of the “Pink Tide”, and in contrast with what happened, Colombia and Peru could open the door to a new leftist wave in the region.