A Major Earthquake Challenges Colombia’s New Right-Wing President

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1:19All to keep you in control however buying happens next. We're built for payments. Built for growth. Built for agentic. PayPal Open, built for all business. Get started at paypalopen.com. Bloomberg Audio Studios. Podcasts, radio, news. The race to find survivors of a 7.4 magnitude earthquake continues across Western Columbia. Rescue workers called for silence as they picked through rubble, listening for signs of life. Hundreds of people are dead and thousands more are injured or missing. The problem is not just the physical damage. Bloomberg's Oscar Medina is based in Bogota. We don't really understand the magnitude of the impact because a lot of roads are blocked.

2:08There is no phone or internet signal. Oscar says rescue efforts have varied from one state to another, and they've been complicated by difficult terrain, limited power and internet infrastructure, years of poverty and civil conflict in the hardest-hit areas. Choco, the epicenter of the quake, is one of the poorest states in the country. Some people have to sleep outside their homes because their houses are destroyed. So that's a challenge for the government because they have to find ways to finance food, shelter, rescue, temporary housing. The task of overseeing all of that falls to Colombia's president, Abelardo de la Espriella, someone who hadn't held public office before.

2:55The earthquake happened just after he was inaugurated. I mean, Monday was the first business day of his presidency. Travis Waldron helps edit Bloomberg's coverage of Latin America from Brasilia. And at 7.30 in the morning, there's this massive earthquake that demands all of his attention. De La Espriella, a right-wing candidate who ran on an austerity platform, had promised to cut as much as 40 % of Colombia's budget. But this national tragedy threatens to upend his plans for the country. There's a real chance for substantial impact here. And, you know, we'll have to see in the coming days what it proves to be.

3:41I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, Colombia grapples with the fallout from a major disaster during its new president's first week on the job.

3:58When a massive earthquake struck Colombia on Monday, it hit one of the country's main economic engines, one of its lucrative coffee-growing regions. It's a multi-billion-dollar industry, which exports roughly a million 60-kilogram bags of coffee every month. Bloomberg's Oscar Medina says the earthquake caused significant damage and shut down the Buenaventura port. It started restoring some of its operations on Thursday. We spoke to the head of a coffee exporter organization that said that actually exports are largely halted. So we don't have estimates yet about the economic costs. But in 1999, there was a similar earthquake.

4:41that earthquake had an economic impact of 2.2 percentage points of GDP. So if we bring that to today's prices, that could be something more than$10 billion. And Oscar, if that wasn't complicated enough, Colombia has this new president who is now in charge of overseeing the rescue and recovery efforts. What's his background? Eduardo del Espriera was a trial lawyer and he was a businessman. Nobody thought he was going to make it to the presidency because he's an outsider in Colombian politics. He hasn't held any public office. I mean, he's a showman. He used to be like a political commentator, but he was controversial.

5:30One of the most interesting things of the campaign, he saw himself as the tiger. I mean, it's funny. El Tigre. I mean, like, with the tiger's claw, we're going to destroy the left. And when he won, and he beat the ally of former President Gustavo Petro, who was very strong at the moment, it was a complete surprise. And he pledged to break ties of traditional politics and political parties. During his inauguration address, he said, quote, the time for restoring order, authority and freedom has begun. What did he mean by that? Former President Petro had a policy of negotiating with armed groups.

6:18So you wouldn't see like large military operations against criminal groups or guerrilla organizations. and that was one of the biggest promises of President de la Espeja, that he was going to end those peace processes and would use the force of the state. And actually, on Monday, there were some news about some camps of an illegal group, the ELN, that's Colombia's oldest guerrilla. It was bombed by the army. So that's his top line on security. You mentioned Colombia's former president, Gustavo Petro. He was a left-wing president. How big a shift has this been from Petro to De La Espriera? De La Espriera's victory was very narrow.

7:11None of the candidates even got to 50%. The difference was just like less than one percentage point. So the country is very divided. He managed to create an alliance with traditional political parties to create a majority in both the Senate and the lower house. But while he has a majority in Congress today, it's not undisputed. Travis, I want to turn back to Colombia's economy. What kind of economic challenges did this new president inherit before this earthquake struck? Well, the economy itself, it depends heavily on what happens with the coffee industry in this area, I think. And then Colombia is already facing steep fiscal challenges and budgetary concerns.

7:57It's high interest rates, high inflation. When Petro left office, he estimated the fiscal deficit for the coming year at around 5%. The incoming finance minister says it's closer to 8%, which, you know, in nominal terms would put it among the highest in the region and I believe in the world. And of course, in a country like Colombia, as with anywhere, you know, you can say you're going to slash spending. But when it comes to social benefits, popular programs, it's more difficult to do in practice than it is as a campaign pledge. And the left remains pretty forceful. And on the day of the new leader's inauguration was already organizing protests and it's kind of ready to pounce on any mistake.

8:39You're getting at what's really kind of the central tension here, this new president's appetite for reform and then this tragedy happening so soon in his tenure. How much has it upended his ability to implement these reforms, his appetite for implementing these reforms? I think that's still to be determined. And so it's going to take some time to really understand the level of damage and what will be necessary to foster recovery here. They've also declared or announced intentions to declare an economic emergency, which would give him some leeway to issue decrees on taxes or spending without congressional approval related to the earthquake.

9:20But that sort of cuts against what his plans were, right? I mean, his plans were to come in and do a big fiscal package. And to the extent that he was going to bolster the state was on the front of the fight against armed rebel groups that have seized some new territories in more remote parts of Colombia. So it's obviously going to be a huge complication for his plan. You know, there could be a rally around the flag effect that helps him. But of course, any misstep, any perception that he's not handling the recovery well could put him off on the wrong foot really quickly. Oscar, what does that economic state of emergency that Travis mentioned allow the president to do?

10:02And what are the limitations on that? A declaration of economic emergency gives the president the right to pass legislation for 30 days. That's especially to pass taxes and raise revenue as fast as they can. So while the finance minister said they wouldn't raise taxes, the president could set increases to the VAT or corporate taxes or would have authority to take on multilateral lending. I mean, it's a very powerful tool. He could declare curfews in cities. It's going to be for 30 days. That could be extended up to 90 days. There has been the use of this sort of economic emergency in the past, in 1999 after an earthquake.

10:54So there is leeway to do it, but it would depend on the scope of how it's issued and what he tries to do under it. The Colombian Constitutional Court has the ability to review both the order itself and any decrees that he issues under it. We saw Gustavo Petro tried to declare an economic emergency late last year after Congress blocked a series of tax increases that he wanted to impose in a bid to get the fiscal situation a little bit under control. And the court ultimately blocked that decree, saying he didn't have the authority to do it.

11:32After the break, Bloomberg's Travis Waldron and Oscar Medina on what success might look like for Colombia's new president and how he fits into the right-wing wave sweeping across Latin America.

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13:28There was no love lost between Colombia's previous president, Gustavo Petro, and President Trump. But Trump embraced President de la Esprilla pretty fast. Hours after he was sworn in, the U.S. pledged a billion dollars to Colombia as part of a security package. And after the earthquake, the U.S. offered more money,$15.5 million in emergency aid. Then, on Wednesday... To offer my sympathy to the people of Colombia. Secretary of Defense Pete Hegseth said Colombia had authorized joint military operations with the U.S. And the Department of War with the State Department is mobilizing critical life-saving aid to support the Colombian government's robust response to this tragic event, just as we did in Venezuela a few weeks ago.

14:14Travis, how big a supporter does this new president have in President Trump? Obviously, Donald Trump was a supporter ahead of the election. He endorsed De La Espriella kind of as his part of his Don Roe doctrine, you know, and he has had successes there. There has been a series of victories for conservative presidents who are definitely more friendly to Washington in the last year or so. Chile, Peru, and now Colombia, all in the last eight or nine months. The relationship between Donald Trump and other leaders, there's always a bit of a give and take aspect to it. Not to be too cynical here, but I think going back and looking at the relationship between the U.S.

14:55and Colombia, it was regarded in the U.S. as a very close ally for a long time. Obviously, that changed when President Petro was the president. What does President Trump want, do you think, from Colombia going forward? I think the main front is going to be on security because Petro had a plan for total peace with the armed groups in which he was prioritizing negotiations instead of a more forceful hand towards the rebels and the drug gangs. The new president, obviously, is going much harder in that he's promised to build mega prisons. It's a much more Trump-aligned approach. And that will be the place where the U.S.

15:35and Colombia under President Trump are really aligned and really trying to move forward. Travis, you mentioned a number of right-wing leaders who have come to power in Latin America recently. What explains the shift that we've seen here over the last couple of years in that direction? There's a couple different theories to that. I mean, this has been a region that has swung back and forth ideologically several times over the last two decades. So there's definitely an anti-incumbency aspect to it that we've seen across the world. But also, I think the security issues have played a huge role and the left's sort of inability to get its message correct and its strategies correct on that front.

16:17You know, if you look at the polls across this region, security and organized crime rank at the top of the list almost across the board. It sometimes comes in different forms. Chile's was a big one with immigration in terms of security. Others in Colombia, Brazil is more on the organized crime security front. We're seeing it now in Brazil ahead of its October election. And it's a big question of whether that's going to swing it to the right as well, which would be, you know, the last of the major South American economies to make the same move. At the same time, whether because of tariff policies or other things, we've actually seen in polls that Trump is not extremely popular in many of these countries.

16:58And so these presidents are positioning themselves as friends to Washington. But at the same time, with some segments of voters, that has the potential to really backfire. So I think of Argentina, Peru, Ecuador, Chile, Bolivia, the list goes on and on. Where do you put Colombia and its new president in that pantheon? Well, he's definitely going to be part of that right-wing wave. De la Sprella was inspired by the fiscal authority plan of President Milley, the tough on crime policy of El Salvador's Nayib Bukele, And he said that he's going to cooperate in terms of security with Ecuador President Daniel Novoa as well.

17:47And actually, those presidents, Milay, Chile's caste, and Ecuador's Novoa, they were here in Colombia when the Lesbieta swore name. For the inauguration. Exactly. Yeah. Let me turn back lastly to Colombia and the circumstances its new president finds himself in. What do you think a successful response to this earthquake looks like? What does this new president have to do in the weeks ahead? Well, he was very radical about his plans of governing without Congress or like being able to hold talks to left-wing factions. So what I've heard and when I speak to people who analyze these things is that he needs to tone down his harsh stance on politics.

18:34So he has to negotiate to try to get closer to people. The day of the earthquake, he headed to the Choco province, and then he went to Pereira and Manizales, to a city that hit the hardest. So at the end, he needs to negotiate with some different sectors. And that's going to be one of his main challenges because of his personality and how he run the presidential campaign? Yeah, I think the probably the main thing for him is to demonstrate the kind of competence of his government, right? He's a first time politician. He's never held executive office. And now he's coming into a challenge that sort of is defined by the executive response, right?

19:21But I think the initial response is one thing. The longer term response is another. And as the, you know, the reconstruction takes place, especially in some of these cities that are poor have long felt neglected by the government, there's a real challenge to sort of prove that, hey, you're here right now. You're on the ground in this region right now. But are you going to be here in five or six months when the buildings are being rebuilt and maybe they're not going as fast as they want? And so I think that will be the big challenge for his government, especially at a time, again, when you're talking about cutting back the state, cutting spending.

19:56There's an argument to make on that front, and he has made it, that that will make things more efficient for the benefit of Colombians, but you have to prove it. And this is going to be the sort of situation that really puts a microscope on those efforts.

20:31listening. We'll be back tomorrow.

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