Overview
On August 7, Colombia’s President-elect Abelardo de la Espriella will be inaugurated with a mandate to tackle crime and reverse the policies of his leftist predecessor. His long-shot campaign, in which he challenged Colombia’s political establishment as an outsider, benefited from a wave of popular support fueled by fears of rising violence from armed groups. He now seeks to reverse the course set by outgoing President Gustavo Petro, Colombia’s first-ever left-wing president, through business-friendly tax adjustments and a “Great Deregulation Revolution.” De la Espriella’s priorities will include fiscal reform, national and regional security, geopolitical alignment with the Trump administration, expanding Colombia’s hydrocarbon sector and seeking commercial exchange with Venezuela.
De la Espriella’s electoral victory makes Colombia the latest country to join the broader right-wing shift across Latin America. De la Espriella received US President Donald Trump’s endorsement and takes inspiration from other regional right-wing leaders including El Salvador’s Nayib Bukele and Argentina’s Javier Milei. While markets have reacted positively to his win, major legislative barriers remain for his policy agenda. Risks for investors revolve around Colombia’s delicate fiscal status, energy insecurity, rising rebel violence and transnational criminal activity.
What is on De la Espriella’s Agenda?
The topic of security has been front and center since the beginning of the campaign last year, when Senator Miguel Uribe Turbay was assassinated at a campaign rally, allegedly at the hands of a local criminal network on behalf of a dissident FARC faction. Armed violence has risen sharply in Colombia in recent years following outgoing President Gustavo Petro’s unsuccessful attempts to negotiate with rebel groups under the Total Peace policy. Since 2022, armed factions have recruited thousands more members and vastly expanded territorial control. De la Espriella, frequently campaigning from behind bulletproof glass, has promised an “iron fist” approach to annihilate armed groups through military action, including bombing campaigns. He has also proposed reviving the practice of aerial fumigation of coca plantations and intends to construct 10 maximum-security megaprisons.
De la Espriella is widely expected to join the Shield of the Americas regional alliance led by the US, aligning Colombia’s foreign policy with the Trump administration. He plans to strengthen diplomatic ties with Israel and open an embassy in Jerusalem while cutting ties with Havana, reversing the Petro administration’s foreign policy. On the other hand, De la Espriella sees potential in the gradual economic recovery of its neighbor Venezuela under the US-aligned government of Delcy Rodríguez. Following the June 24 earthquakes in Venezuela, De la Espriella claimed that Colombia should lead its neighbor’s recovery efforts, drawing condemnation from Rodríguez. De la Espriella wants to increase Colombian commodities exports to Venezuela, while Washington’s foreign policy priorities will likely shape Bogotá’s bilateral relationship with Caracas.
De la Espriella also seeks to revive Colombia’s domestic energy sector by rolling back Petro’s environmental policies such as a ban on fracking and the suspension of new oil and gas exploration licenses. Colombia has more than 2 billion barrels of proven oil reserves. Brazilian state-owned energy company Petrobras recently confirmed new deepwater natural gas discoveries off Colombia’s coast through a joint venture with Ecopetrol, Colombia’s majority state-owned oil company. De la Espriella supports fracking and aims to nearly double oil production with the goal of reaching 1.3 million barrels per day. He is also looking to expand critical and rare earth mineral extraction while prosecuting illegal mining.
Another key pillar of the incoming government’s agenda is reversing Petro’s fiscal policy. De la Espriella wants to attract private investment through corporate tax reforms while increasing government revenue through energy sector growth and cutting back on public spending to address tax-revenue shortfalls. The International Monetary Fund (IMF) suspended Colombia’s $8.1 billion Flexible Credit Line after a qualification assessment revealed fiscal concerns, and Colombian authorities canceled the facility in September 2025. De la Espriella further aims to reduce the size of Colombia’s government by 40% and intends to declare the Caribbean city of Barranquilla as an alternative capital to Bogotá, exemplifying his anti-establishment image. His inauguration will also be held in the southwestern city of Cali, breaking the long-held tradition of presidential inaugurations in Bogotá.
Roadblocks for the New Administration
Overall, De la Espriella seeks to radically overhaul the previous administration’s policies. This may not be easily accomplished due to legislative constraints. One obstacle is the unexpected alliance in Colombia’s Congress between the left-wing Historic Pact and the conservative Democratic Center to block De la Espriella’s pick for the Senate Presidency, Senator Alfredo Deluque. In July, lawmakers from the Historic Pact strategically backed the Democratic Center’s candidate, Honorio Henríquez, to defeat Deluque. While the two blocs remain ideologically opposed, the move demonstrates their willingness to tactically cooperate to block De la Espriella’s agenda.
Balancing Colombia’s budget will also be easier said than done. The country’s healthcare and pension systems have high costs, and the growing fiscal deficit reached 6.4% of GDP in 2025. Recouping energy revenues will not happen overnight, and the intensifying “Super El Niño” climate event is expected to bring heat and drought to Colombia over the next year, lowering water levels and threatening to reduce hydroelectric energy generation. This could increase demand for LNG, with costly imports raising gas prices and inflation. To reduce the deficit, De la Espriella favors austerity measures, but this policy is deeply unpopular among Colombians. Previously proposed austerity measures under former President Iván Duque contributed to the “Paro Nacional” strikes and mass protests in 2019.
Some of De la Espriella’s policy proposals may also face legal challenges. His proposal to construct CECOT-style megaprisons in remote jungle locations may provoke backlash, as allegations of mass incarceration without due process in El Salvador have attracted international condemnation. To overcome these roadblocks, De la Espriella could attempt to govern by emergency decree. However, this approach failed under the Petro administration, whose attempt to push through tax reforms using emergency powers was blocked by the Constitutional Court.
Risks on the Road Ahead
Despite the potential roadblocks to his agenda, De la Espriella’s victory was quickly priced in by markets. The Colombian stock market index COLCAP has rallied, five-year sovereign credit default swaps corrected downward, and the Colombian peso reached a multi-year high. Colombia will move forward with multi-billion-dollar energy projects to expand domestic gas supply, reinforce grid stability, and expand pipeline infrastructure and green hydrogen production. Proposals to tackle illicit economies and improve public safety have also contributed to overall market optimism.
However, a multifaceted approach will be necessary to combat rising crime, which has been a major catalyst behind the recent right-wing shift across Latin America. Colombia is the world's largest supplier of cocaine, with the production and trafficking of cocaine generating $16.5 billion for Colombian criminal organizations in 2024 (around 4.4% of GDP), according to estimates, making it the country’s largest export overall when compared side-by-side with legal exports. The criminal landscape in Colombia has evolved dramatically from traditional, highly centralized cartels and ideological guerrilla groups to modern transnational networks that incorporate hybrid elements.
Today’s criminal groups are sophisticated and often decentralized, spanning multiple sectors including drug smuggling, cybercrime, human and arms trafficking, border control and illegal gold mining. They combine territorial expansion with cross-border operations and integration of financial flows into legitimate economic sectors. In many cases, especially for the highly decentralized ELN guerrilla group, members cannot be easily identified and have widely infiltrated public and private sectors. While Colombia is not subject to comprehensive US sanctions, targeted sanctions do apply to some high-ranking officials, including outgoing President Petro. Colombia’s largest drug-trafficking gang, the transnational Clan del Golfo, is listed as a Foreign Terrorist Organization (FTO), and broader designations under the Foreign Narcotics Kingpin Designation Act create exposure risks to the extent that criminal groups’ activities overlap with legitimate economic sectors.
Sanctions also pose a barrier to De la Espriella’s goal of economic exchange with neighboring Venezuela. Upside risk for commercial activity across the Venezuelan-Colombian border will depend on the degree to which the US allows transactions with Venezuelan state or commercial entities that are currently subject to sanctions. The border is a particularly high-risk area due to the concentration of illicit economic activity, territorial control by armed groups, and cross-border smuggling. While improved relations between Venezuela and Colombia have the potential to open possibilities for legal commerce across the border, such activity may be hampered by the aggressive anti-guerrilla military campaign proposed by De la Espriella.
While current market optimism is more reflective of upside risks, it has not necessarily priced in the difficult fiscal realities that Colombia will continue to face in the long term. The incoming Finance Minister Miguel Gómez travelled to Washington in July to meet with multilateral financial institutions as part of an effort to refinance Colombia’s public debt. Gómez reported that Colombia’s fiscal deficit stands between 7% and 8% of GDP, higher than the levels previously reported by the Petro government. Credit risks, along with ongoing security and energy uncertainty, remain for investors in Colombia despite the new change in leadership.
