Andean Group - 8 March 2005
Uribe names intermediary in congress
President Alvaro Uribe has chosen Juan Manuel Santos of the Partido Liberal to coordinate support for the president in congress. Uribe's decision, confirmed on 3 March, is aimed to ensure that the president has a solid support base in the legislature ahead of the general election in 2006 and beyond, but it has major implications for the make-up of Colombia's party-political system.
Santos a surprise choice?
Uribe has been saying he wants someone to act as a congressional coordinator since December last year after his tax reforms failed to pass through congress. The president, who once belonged to the PL but split to run for president as an independent, has lacked a reliable support base in congress throughout his term, and he has increasingly had to rely on political horse-trading to get his reforms passed. The success of his re-election legislation drained Uribe of his political capital, condemning the much-needed tax reforms to failure.
Santos is not an obvious choice for the role, however. Not only was he a firm supporter of the PL leader, former president César Gaviria, in his attempts to unify the party against the government, but he was also a fierce opponent of the government's re-election bill. However, since the turn of the year he has changed his tune; now that the re-election bill has been passed he believes it would be absurd for the constitutional court to block the measure on technical grounds (the court is set to examine the legislation shortly and there is no guarantee it will ratify the measures). He also came out strongly on the government's side in the recent diplomatic row with Venezuela over the kidnapping of Rodrigo Granda.
Santos proved when he was treasury minister under former president Andrés Pastrana that he was adept at handling congress, and Uribe believes he can unite a pro-government bloc both ahead of the next election and afterwards. What this means for the PL is unclear; Santos has been eager to stress that his appointment will not weaken the party, but it is impossible to rule out a major split in a party which has long been a dominant force in Colombian politics.
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ECONOMIC OVERVIEW: COLOMBIA
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The government announced on 2 March that it will abandon its capital
controls. They were brought in on 15 December, to try to stop the dollar
falling against the peso. The finance minister, Alberto Carrasquilla,
admitted that the controls had not worked. Carrasquilla said that the
controls would end within the next six months. The peso has appreciated
by 2% against the dollar since the controls began. The currency is up
by 15% against the dollar over the past 12 months. Carrasquilla said that
the strength of the peso was cramping the growth of exports. There is
little overt sign of this, partly because the strength of oil prices has
masked problems elsewhere. Oil accounts for about a quarter of Colombia's
exports: in the first 11 months of 2004 exports came to US$14.9bn, up
25% on the same period of 2003. The peso is currently hovering at just
over 2,300 against the dollar. A year ago the rate was nudging 2,800.
The central bank spent more than US$3bn on trying to brake the rise in
the value of the peso in 2004. The bank also cut interest rates, down
to 6.5%, in 2004. Even so, the exchange rate is now back to where it was
in May 2002. |