(Bloomberg) -- Colombian President Gustavo Petro suffered his first major setback in congress after the government withdrew a proposed bill to overhaul the political system.
Petro’s Historic Pact movement had called on the government to recall the bill sent to congress last year. In its original version, the bill would have made political campaigns entirely state-funded and introduced a system whereby voters would have to back a party rather than an individual in elections in which 50% of candidates were women.
Today’s decision represents the first defeat of a major bill since Petro took office last August, according to Andres Mejia a political consultant who teaches at the business school of Bogota’s Los Andes University.
“This shows that the coalition does not operate as a bloc that could easily allow the government to push through the coming reforms,” Mejia said.
Investors are trying to gauge Petro’s strength in congress to see how likely it is that he’ll be able to pass a series of bills intended to overhaul the nation’s conservative economic model. Petro’s pension bill, in particular, is seen as negative for Colombian assets, since it would cut the flow of money to private pension funds who are among the biggest players in the local market.
In the political reform, lawmakers cut many of Petro’s original initiatives and added others, such as allowing members of congress to become ministers.
Interior Minister Alfonso Prada told lawmakers that the administration will present another initiative to transform the political system.
Some of Petro’s allies in the ruling coalition have dissented from plans such as granting the government a bigger role in the health system, or the holding talks with cocaine trafficking and guerrilla groups in the pursuit of so-called Total Peace.
The Conservative Party on Wednesday said it will not support a government labor reform, which was intended to increase overtime pay and other workers’ rights.
“This will force the government to give up a lot in the reforms it has sent to Congress. It is a coalition that is increasingly fragmenting,” said Sergio Guzman, director of Colombia Risk Analysis.
(Adds withdraw of bill from first paragraph)
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