Ocampo is leaving. Big challenges ahead for Bonilla

COLOMBIA - In Brief 26 Apr 2023 by Andres Escobar

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President Petro reshuffled his cabinet and sacked 7 ministers (finance, agriculture, interior, health, science, IT & telecoms, transport). The most salient decision was to sack the Finance Minister (a total surprise to everybody, including Ocampo himself), who was acting as a living corset to the frequent outbursts of fiscal, monetary or exchange rate imprudence of the President. Ocampo repeated incessantly the mantra that the fiscal rule is sacred and would be fulfilled no matter what the president promised in his political outbursts. Ocampo was considered the gatekeeper of Colombian economic institutions and of technical policy design. Him leaving is not good news. Mr. Ocampo opposed: 1) a pension reform that affected the TES markets, 2) an eventual tax on capital outflows; 3) rejected the idea of buying land with bonds; 4) criticized healthcare reform and recently published an oficial memo quantifying its impact, something that allegedly infuriated Petro. Ocampo supported numerous hikes in CB interest rates. We thought that the record of lasting only 10 months and 2 days in the cabinet as Finance Minister set by Roberto Junguito at the beginning of the first Uribe administration was impossible to beat. It turns out that Ocampo beat Junguito with a stint of only 8 months and 19 days at the helm; it should be mentioned that, while Junguito left because he wanted to, Ocampo was sacked in spite of his intentions to stay until the end of next year. In a final public statement, Ocampo repeated yet again that fiscal prudence was paramount and that he had conveyed this message to his successor, Ricardo Bonilla. Mr. Bonilla, our pick to eventually replace Ocampo for a while ...