September 27, 2018 / 6:18 PM / 25 days ago

Colombia president hopes to pass agenda without deal-making in Congress

BOGOTA, Sept 27 (Reuters) - Colombian President Ivan Duque’s campaign promise to eschew traditional deal-making with the legislature may make it hard for him to pass business-friendly tax proposals, modifications to a peace deal with Marxist rebels and other measures that are unpopular with some centrist and leftist legislators.

Duque took office early last month with a thin legislative majority, and will struggle even before proposed laws reach the floor. His government lacks majorities in several of the committees where lawmakers initially discuss bills.

Yet he has pledged to stop special interest groups from trading support for politicians for government favors or funding. Colombians call the practice “marmalade” because money and influence are spread around.

Opposition politicians have scoffed at the promise, saying Duque will be obliged to make deals to get his laws through.

Graft has become a major issue in Colombia following a raft of scandals involving everything from vote-buying to embezzlement from a school lunch program.

Nearly 12 million voters backed anti-corruption measures in a referendum last month, and at least 10 current or retired lawmakers were investigated or tried in a scandal involving kickbacks by Brazilian construction company Odebrecht.

But Duque’s promises to avoid backroom dealings could limit his ability to pass measures needed to salvage the country’s investment grade credit rating and keep his promise to tighten restrictions on former FARC rebels.

His coalition has a slender Senate majority of 54 out of 106 seats. In the lower house his backers hold just 83 of 170 seats, which is less than half.

“He has a weak majority and the challenge is big because Duque is trying to do politics without handing out jobs or contracts to lawmakers,” political analyst Marcela Prieto said. “Changing that political culture will not be easy. It will cost him a lot to pass his legislative proposals.”

Duque’s weak backing has analysts and ratings agencies worried that he will have trouble passing an expansion of the tax base and cuts to duties for companies. Colombia has an investment grade rating and a stable outlook from Fitch and S&P.

“Political fragmentation or confrontation may complicate the task of passing those reforms,” Samar Maziad, vice-president of Moody’s said. “That’s part of the negative outlook we have on the rating.”

The government has forecast that Colombia’s $300 billion economy will grow 2.7 percent this year. It has a 3.1 percent deficit target for 2018, and a quarter of local Treasury bonds are held by foreign investors.

Beyond his Democratic Center party, Duque has the Conservatives, the U Party and four others in his stable. Some members of U Party, which led a governing coalition under ex-President Juan Manuel Santos, have said they will not back the administration.

Centrist parties likes the Liberals and Radical Change have declined to join the coalition, making their votes wild cards.

Duque has also pledged to push through a justice system modernization and modify the 2016 peace deal that allowed FARC rebels to demobilize and form a political party. Ex-guerrillas accused of war crimes should be tried before they take up political posts, Duque has said, but changing the deal would require two-thirds majorities.

Lawmakers from independent parties could tilt the balance in Duque’s favor. They may be more likely to back the tax and justice system reforms and anti-corruption measures that proved popular in the recent referendum, including a three-term limit for lawmakers.

“When we’re not supporting him, he’ll have problems,” said Senator German Varon of the Radical Change party.

Opposition Senator Jorge Robledo, from the left-wing Democratic Pole, says independents may back the government if offers of patronage are on the table.

“With clientelism they’ll arrange majorities,” Robledo said. “That isn’t to say that the president won’t have hurdles, problems, that could cause him a crisis.” (Reporting by Luis Jaime Acosta, additional reporting by Helen Murphy and Nelson Bocanegra Writing by Julia Symmes Cobb, editing by Helen Murphy, Dan Flynn and David Gregorio)

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