Image Source: World Politics Review.
2024 was marked by geopolitical tensions, economic volatility, and social unrest. While some events unfolded as expected, others took surprising turns, reminding us that we navigate a complex and ever-changing world.
In the Middle East, the Assad regime, which clung to power for more than 50 years, fell in less than 10 days in the face of an onslaught by rebel forces. Conflict stalemates in Ukraine and Palestine persisted, offering little hope for a speedy resolution. Meanwhile, fraudulent elections in Venezuela on July 28 consolidated Maduro’s authoritarian regime in the run-up to his presidential inauguration on January 10. In Europe, the governments of France and Germany have faced growing domestic opposition against a backdrop of anti-immigration and a sense of economic malaise. Donald Trump’s electoral victory in the United States, whose scenarios we have analyzed, threatens to shake the global political landscape with his proposals on migration, tariffs, and the abandonment of multilateralism.
In economic terms, the world is still grappling with post-pandemic inflation against a backdrop of enormous global uncertainty. Investors have sought refuge in assets such as gold or Bitcoin, which crossed the USD 100,000 barrier, marking a milestone in the world of cryptocurrencies. Perhaps, anticipating U.S. tariff moves, Mercosur and the European Union finally reached a trade agreement that has potential. At the same time, the BRICS have continued to expand their global influence and promise to add more members, challenging the traditional order dominated by the West and the dollar — an issue that Trump plans to punish heavily. India’s emergence as an economic powerhouse has been a focus of our analysis, and next year, we plan to delve deeper into Russia’s geopolitical ambitions in Colombia.
Colombia, like many other nations, faces its own set of challenges. At Colombia Risk Analysis, we have been assertive that the future of democracy in our country is not at risk, despite tensions between the different branches of power. The Petro administration has had such a hard time executing its vision that it has gone from ambition to stagnation. The remainder of its term will be difficult to navigate, with much uncertainty on the part of the private sector. Risks have affected many sectors, but perhaps none more so than the extractive and energy sectors, which will need to adjust their narratives to appease the government and the environmental demands of future generations. Even so, risks in the country are not uniform and vary from region to region.
What can we expect for Colombia in 2025?
- The Petro government prepares for its sunset – 2025 will be the last opportunity for the Petro government to accomplish legislative achievements before facing the voters in 2026. However, changes in the congressional leadership, for the fourth and final legislature, will present major obstacles to the Executive Branch. The president asked his cabinet to decide whether they will stay for the final stretch or resign to prepare their own candidacies. In 2025, all kinds of presidential candidacies will sprout: those that are serious, those that are more ministerial candidacies, and those that start as presidential candidacies and end up as campaigns for congress or some local office in 2027. Likewise, the judicial cases against the president’s inner circle, including his son, several ministers, and a number of presidential advisors, will move forward.
- Total peace is distant – Despite the Petro government’s efforts to deemphasize armed conflict and achieve its desire for a negotiated “total peace”, violence persists, and armed groups have consolidated their power. Simultaneous negotiations with several fragmented national and local armed groups have proven slow and ineffective. No peace gestures from the groups or tangible progress beyond ceasefires are visible. Meanwhile, illicit crops continue to increase, and the capacity of the armed groups grows. The state’s security strategy has shown limitations. The emergence of new armed actors and technologies such as drones further complicates the outlook in strategic locations such as the Micay canyon in Cauca, Arauca, Chocó, or Urabá. The feeling of insecurity in the cities will increase the unease towards the government’s security policies.
- The economy is on hold – Political uncertainty, declining oil production, and external shocks threaten foreign investment and aggravate the fiscal deficit. To reactivate the economy, the government must take urgent measures such as reducing public spending, encouraging private investment, and diversifying the economy. This will be more difficult after the failure in congress of both the 2025 General Budget and the financing law. In addition, factors such as the governance of the Central Bank, the geopolitical situation, the reduction of international investments, and the risks of a renegotiation of free trade agreements cloud the forecasts.
- Ambitious environmental goals lack funding – The 2024 United Nations Biodiversity Conference of the Parties (COP16) in Cali succeeded in promoting the Petro government’s environmental image at the international level, but like the 2024 COP29 in Baku, the lack of financing for the agreements will be the weak point. With Decrees 1275 and 044, the Petro government has cemented its intention to prioritize the environment and indigenous communities over the economy and the extraction of natural resources, particularly those found in sensitive ecosystems. However, without investment in these sectors, it will be difficult to promote economic growth. Meanwhile, the water crisis, evidenced by water rationing in Bogotá, reflects the urgency for a more robust water policy considering the country’s vulnerability to climate change. It is expected that 2025 will be an even more challenging year in environmental terms, even more so as the National Unit for Disaster Risk Management (UNGRD, per its acronym in Spanish) has shown itself to be unprepared to face these challenges.
- Petro faces a geopolitical back-and-forth – In foreign policy, the main concerns for the president will be U.S. President Donald Trump and Venezuelan President Nicolás Maduro. A tense relationship with Trump is anticipated considering that Sen. Marco Rubio (R-FL), Trump’s Secretary of State nominee, knows the region well and does not have a good opinion of Petro or the region’s leftist governments. In addition, the likely departure of Luis Gilberto Murillo from the Foreign Ministry will mark a change of style and substance in the management of Colombia’s international relations. Although Petro would prefer a closer relationship with the EU and among Latin American countries, none can offer the short-term economic benefits of joining China’s Belt and Road initiative or the BRICS. However, Colombia risks looking like an unreliable ally if it switches sides in 2025 and then again depending on the presidential election in 2026.
- Energy self-sufficiency is in question – For the first time in its recent history, Colombia has faced potential gas shortages, electricity rationing, and temporary fuel rationing. Although energy policy has been a priority in the government’s discourse, it has failed to appoint experienced and capable experts to the Energy and Gas Regulatory Commission (CREG, per its acronym in Spanish), present a public services reform, or promote new clean energy projects. Although potentially huge, offshore gas discoveries have been dismissed by the Petro government due to their environmental impact. In addition, its plan to rely on Venezuela for supply is complicated by a tightening of sanctions against Maduro and a lack of technical capacity to bring in gas supplies. Colombia’s energy self-sufficiency is in jeopardy by 2025.
2025 is posed to be a very volatile year politically as the candidacies for the 2026 election begin to unwind.
Already at Colombia Risk Analysis we are receiving questions about it from investors and corporate leaders about who the best chances may have to win in 2026. These questions are premature, but natural with an extended campaign period and a lot of anxiety over a successor to Gustavo Petro. We suspect that these questions will become more intense as the elections draw near.
Nevertheless, we continue to believe that Colombia’s institutions are strong and will prevent any democratic backsliding or authoritarian tendencies that may emerge from Petro who has become increasingly frustrated and exasperated with the political blockages, legal obstructions or financial constraints.
Sergio Guzmán is the Director of Colombia Risk Analysis, a political risk consulting firm based in Bogotá. Follow him on Twitter @SergioGuzmanE and @ColombiaRisk.
