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Colombia's Santos hit by reform fiasco, rebel attacks
BOGOTA (Reuters) - Two years after Colombia's President Juan Manuel Santos took office, a bloody resurgence of left-wing guerrilla attacks and a botched judicial reform have cut into his once-commanding approval ratings, threatening plans for extensive economic reforms.
Santos's support in Congress has softened and he may have a weaker hand as he tries to push through key reforms like overhauls of the pension and tax systems.
Born into one of Colombia's most powerful families, the U.S.- and British-educated economist and former newspaper editor took office in August 2010 after a landslide election win.
By late that year, Santos had a remarkable 76 percent approval rating after troops killed Mono Jojoy, military leader of the Revolutionary Armed Forces of Colombia (FARC) guerrilla group.
Yet the latest Gallup poll showed him dropping to a low of 48 percent in June, while another by Centro Nacional de Consultoria at the weekend saw him down five points from the previous month to 66 percent.
Opponents say Santos has allowed the FARC, Latin America's oldest rebel group and financed by drug trafficking, to rebuild and step up its attacks on infrastructure and urban centers.
Former President Alvaro Uribe, who chose Santos to be his defense minister and was a close ally who backed his run for president, is now his fiercest critic.
In the first four months of the year, FARC attacks increased 66 percent compared with the same period of 2011.
"He's just not tough enough on security," said Pedro Rincon, 51, who sells fruit juice on a Bogota street. "He's abandoned the fight against the FARC to court business interests."
FIASCO IN CONGRESS
The fiasco over a reform plan meant to modernize Colombia's chaotic legal system has added to Santos' troubles.
During last-minute tinkering on the bill in June, lawmakers slipped in provisions that could have led to the dismissal of scores of cases against politicians accused of ties to right-wing paramilitary groups.
Facing a public outcry, Congress shelved the reform.
A visibly annoyed Santos, 60, made a late-night national address slamming those involved in manipulating the final text and promised to take full responsibility for any fallout.
His justice minister quit the following night and, in a highly unusual public reaction, Santos was booed by young Colombians at a technology fair days later.
How hard Santos is hit in Congress will not be clear until lawmakers return from vacation on July 20. His ruling coalition commands more than a two-thirds majority in the 166-member chamber but the debacle may push some into opposition.
At least five Santos supporters will move to the opposition, while others are considering their positions, according to Angel Cabrera, a member of the ruling coalition.
"The failure of the justice bill has generated cracks," said Gallup's Jorge Londono.
Santos recently admitted the "hostile attitude" in Congress may delay presentation of the pension and tax reforms, both aimed at bringing in extra resources.
Uribe takes daily snipes at Santos on his Twitter account, slamming him in particular for considering peace talks if the FARC ends "terrorist" actions.
"I fear that in terms of the economy and social policy, the government has harvested the good crop it inherited, but it is using up even the seeds and we are now returning to a mediocre pace," Uribe said in a speech last week.
Uribe pulled out of the ruling Partido de la U to become the de facto opposition leader. Then Oscar Ivan Zuluaga, a former finance minister under Uribe, declared himself a candidate for president in 2014. He is being backed by Uribe, who served two terms but is barred under the constitution from running again.
Santos swept to office promising to build on economic and security advances that began under Uribe as U.S.-funded troops weakened the FARC and drug trafficking gangs, making Colombia safer and fostering a boom in foreign investment.
Santos is credited with some of the heaviest blows against the FARC - both as defense minister and since he became president - but there is a growing perception of deterioration.
"The FARC is breathing oxygen again," said columnist Ernesto Macias. "That affects the economy and Colombia's social makeup because investors start to protect their cash."
For now, investors have shrugged off Santos' political travails. The $330 billion economy may slow from last year's 5.9 percent growth, but still record a decent 4.8 percent.
Strong foreign investment, expected to reach about $15 billion this year, has led the peso currency to gain 8.6 percent so far this year.
But further damage to Santos' popular image could erode investor sentiment. Credit rating agencies Standard & Poor's and Fitch have said tax reform is one of the keys to further upgrades after Colombia was raised to investment grade last year.
"Political stability has been one of the main incentives to invest," said Daniel Velandia, an economist at brokerage Correval, adding that investors would be "far more cautious" if Santos' popularity decline continues.
Santos, who has not said whether he will seek a second term, is trying to avoid direct confrontation with Uribe.
"Should I respond to 40 Twitters a day?" he asked the daily El Tiempo, which his grandfather founded a century ago. "More than damaging the government, he's damaging the nation."
Still, Santos is seeking to win back support from the bottom up. In May, he pledged to give away 100,000 new homes to Colombia's poorest, a populist move that could play well with the millions who live on less than $1 a day.
"It's only a matter of time before Santos' approval goes up again," said Orlando Chavarro, 50, as he sold meat pastries, known as empanadas, in Bogota. "He's a decent man."
(Additional reporting by Luis Jaime Acosta, Nelson Bocanegra and Katherine McKeon; Editing by Andrew Cawthorne, Kieran Murray and Bill Trott)
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