Can Petro Move Colombia Away From Oil?
If his presidency goes according to plan, the country could become the world’s biggest crude exporter to halt new exploration.
Welcome back to Foreign Policy’s Latin America Brief.
Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: Colombian President-elect Gustavo Petro’s plans to move past oil could make his country a climate leader, vaccine-makers in Argentina and Brazil weigh a WTO deal on COVID-19 intellectual property rights, and anti-government protests shake Ecuador.
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A Bold Green Goal
Gustavo Petro, who was elected as Colombia’s first leftist president last Sunday, has been praised by Latin American environmentalists for aspiring to reduce the country’s dependence on raw materials extraction—and oil in particular. Petro is at the vanguard of this issue in both the region and the world: If he carries out his pledge to ban new contracts for oil exploration in Colombia, the country would be the world’s biggest crude exporter—in terms of crude oil’s share of its total exports—to take this step.
Currently, that laurel lies with Denmark, where crude oil accounted for less than 1 percent of its exports in 2020, compared with 23 percent in Colombia.
Petro has said he would honor existing exploration and production contracts so that oil revenues can be gradually replaced by growth in other sectors, such as agriculture, manufactured goods, tourism, and clean energy. The Colombian Association of Petroleum and Gas estimated in May that cutting new oil contracts could cost the government around $4.5 billion in tax revenue by 2026.
Petro argues that his plans are simply responsible management of the inevitable. At the current rate of extraction under incumbent President Iván Duque, the Colombian energy ministry says, the country’s known oil reserves are due to run out in around seven years, though state oil company Ecopetrol had been planning to try to expand them through fracking.
So far, Petro has not offered many specific details about how he plans to build up alternative public and private revenue streams in the country. “A lot of things will only be known when the necessary conversations with all of the different actors involved take place,” his economic advisor Luis Fernando Medina tweeted Tuesday.
Petro’s options for replacing oil revenues face many potential roadblocks, Sergio Guzmán of Colombia Risk Analysis told Foreign Policy in an interview. Removing fuel subsidies could hamper the incoming president’s pledge to support poor families. And expanding the construction of hydroelectric dams, a potential source of green power, could run into opposition from environmental activists. Overall, “I think that members of [Colombia’s] Congress are going to push back against Petro’s very ambitious plans,” Guzmán said.
The grim global economic outlook of high inflation and low growth makes Petro’s proposals even more challenging. Still, in backing him, many Colombians signaled they believe the transition away from fossil fuels—however difficult it may be—cannot wait.
That’s also the position taken by the International Energy Agency, which said in 2021 that all new fossil fuel exploration projects must stop immediately if the world is to have a chance of reaching net-zero emissions by 2050 and staving off global warming of over 1.5 degrees Celsius above preindustrial levels. Only a tiny handful of countries have so far heeded the call.
Discussing Colombia on last week’s episode of Ones and Tooze, historian and FP columnist Adam Tooze praised Petro’s plans as “just sensible,” adding that “there’s very good reason to think that Colombia suffers from so-called Dutch disease,” in which dependence on oil exports drives up the value of a country’s currency and makes other branches of the economy less competitive. Multiple scholars have argued the same about Colombia; if executed well, shifting away from oil could be a remedy.
“Is this a gamble? Yes. Is it an experiment? Yes. But they understand themselves as being at the cutting edge of global development,” Tooze said. “It may be a risky experiment, but it’s one in which really the entire world, insofar as it’s interested in progressive solutions to the energy transition, should have a very serious stake. We need this to succeed.”
Friday, June 24: The presidents of Argentina and Brazil participate in the BRICS virtual dialogue on global development.
Wednesday, June 29, to Thursday, June 30: The U.N. Human Rights Council discusses human rights in Venezuela.
Monday, July 4: Chile’s finalized draft constitution is presented to the public.
What We’re Following
Bolsonaro among the BRICS. The annual summit of the BRICS countries—Brazil, Russia, India, China, and South Africa—is being held virtually this year, from June 23 to 24. In a public address for a BRICS pre-summit event on investment on Wednesday, Brazilian President Jair Bolsonaro avoided directly criticizing both Russia’s invasion of Ukraine and Western sanctions on Moscow, instead vaguely saying that Brazil was worried about the “international context” and its impact on trade and supply chains.
Russian President Vladimir Putin, on the other hand, criticized Western sanctions on his country and said Russia aimed to strengthen economic relations with BRICS countries to survive them. This process is already underway: Chinese and Indian purchases of Russian oil and Brazilian purchases of Russian fertilizer have risen since the start of the war in February.
Brazilian diplomats are wary, however, of a Chinese pre-summit proposal to consider expanding the BRICS grouping to include countries such as Saudi Arabia, the United Arab Emirates, Argentina, and Indonesia, Jamil Chade reported for news site UOL. Chade wrote that Brazilian diplomats would prefer BRICS to serve a primarily economic function rather than act “as an opposition bloc to Western powers.” India is similarly hesitant, he reported.
Upheaval in Ecuador. Ongoing protests by Indigenous activists against the Ecuadoran government’s economic policies escalated sharply last week when Indigenous leader Leonidas Iza was arrested on June 14 on unspecified charges. He was released a day later and called for the “radicalization” of protests, which have since spread to multiple cities and have included road barricades, injuries among both protesters and police, and at least one protester death.
Protesters are calling for a reduction in fuel prices, price controls on agricultural products, and the removal of decrees that aim to speed oil and mining contracts on Indigenous lands. Ecuador’s Indigenous groups have pushed for these demands throughout President Guillermo Lasso’s tenure, but inflation has heightened tensions. Meanwhile, the president’s weakness in the National Assembly means he has few legislative accomplishments to show for or allies to rely on in a moment of tension.
Lasso declared a state of emergency in the six provinces most affected by the protests and deployed police forces across the country. But the situation continued to escalate, and by late Wednesday night, leaders of 23 of the country’s provinces called for a cessation of violence, direct talks between the government and protesters, and “humanitarian corridors” to be set up in order for residents to restock on food. By Thursday afternoon, no such talks had begun.
A new design star. Colombian Vice President-elect Francia Márquez, who will become the first Black person to serve in that role, stood out on the campaign trail for many reasons, including her underrepresented background. Another was her vibrant dresses and suits. The brain behind them is 23-year-old designer Esteban Sinisterra Paz, who had previously sold a few articles of clothing to Márquez before she got back in touch during election season, asking him to supply her with a campaign wardrobe.
Márquez and Sinisterra Paz identified with each other’s personal stories, the designer told art historian Isabel Cristina Ramírez in an interview. Both hail from working-class families on Colombia’s Pacific coast—Sinisterra Paz’s family was forced to flee the department of Nariño due to violence—and both celebrate their Afro-Colombian identities through their clothing. For Márquez’s campaign outfits, Sinisterra Paz often combined Ghanaian-style kente cloth with wide skirts common in the country’s rural areas.
Márquez frequently said she was running for office to defend people seen as “nobodies” in Colombia, and her bold clothing displayed her conviction that Black, working-class, and rural Colombians are exactly the opposite. Márquez’s style is catching on, said Sinisterra Paz. “Now that she wears these outfits of navy blue with purple, orange with red, textured, with ruffles, I see that more women are taking risks” with their own styles, he told El País.
Question of the Week
One of Petro’s closest-watched appointments in Washington will be that of foreign minister, as Colombia has been among the largest recipient of U.S. aid in Latin America in recent years. How much did U.S. aid to Colombia—which includes economic and security assistance—total in fiscal year 2021?
That’s according to calculations made by the Washington Office on Latin America’s Adam Isacson based on U.S. government documents. He found that around just over half of the money went to economic and institutional support, while the rest went to military and police assistance.
In Focus: Loosening the Vaccine IP Bottleneck
Last Friday, World Trade Organization (WTO) member countries finalized a long-awaited and highly contentious deal on intellectual property rights during the COVID-19 pandemic.
In October 2020, South Africa and India proposed that the WTO temporarily suspend patents and other protections on COVID-related technologies such as vaccines, tests, and medicines. But the new deal agrees to something far narrower. For COVID-19 vaccines, it restates developing countries’ right to override patents under already existing WTO rules for emergencies. It also adds that a country can export the vaccines it produces without patentholder permission, which under the preexisting emergency rules would mostly have been restricted to domestic use.
Nonprofits and civil society groups such as Doctors Without Borders slammed the deal, saying it does not adequately address the large-scale global need for medical technologies.
Watching the talks unfold with special interest was a network of labs across the global south that has agreed to share research and manufacturing information on mRNA vaccines as part of a project backed by the World Health Organization (WHO). It includes the Oswaldo Cruz Foundation’s Immunobiological Technology Institute, better known as Bio-Manguinhos, in Brazil and Sinergium Biotech in Argentina. The South African member of the project, Afrigen, created an mRNA COVID-19 vaccine earlier this year based on publicly available data about Moderna’s shot and is now teaching many of the other labs to do the same.
Based on those trainings, Sinergium Biotech has now created small amounts of the vaccine that Afrigen reverse-engineered, Fernando Lobos, Sinergium’s business development director, said at a virtual event last month. The vaccine would still need to undergo human trials before being mass-produced.
Moderna has said it will not enforce the patent on its COVID-19 vaccine for some low- and middle-income countries, but its word is not a legal guarantee. So while the new WTO vaccine deal is limited in scope, it could provide increased protections for efforts to reproduce the “Moderna-like” Afrigen vaccine, Bio-Manguinhos vice-director for technological development Sotiris Missailidis told Foreign Policy. Bio-Manguinhos is not being trained on that particular shot, Missailidis said, but Sinergium Biotech is, so “if Moderna has a patent in Argentina, this would be very important for them.”
The WHO’s mRNA training network was inspired to overcome the barriers that developing countries experienced in producing their own vaccines during the pandemic. Bio-Manguinhos is running clinical trials of its own separately designed self-amplifying RNA shot for COVID-19, which it will teach to the other labs if it proves successful. The vaccine’s developers intend for the shot to be modified for diseases beyond COVID-19.
Patents are only one part of the barrier to mass production, Missailidis said. Even if patents are waived so that more factories can legally replicate vaccines, “it’s not that easy or trivial for you to do this alone,” as opposed to “in a true collaboration in which they are interested in transferring all of the technology.”
Catherine Osborn is the writer of Foreign Policy’s weekly Latin America Brief. She is a print and radio journalist based in Rio de Janeiro. Twitter: @cculbertosborn
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