Business Versus Business? Grupos and Organized Business in Colombia

Latin American Politics and Society, Spring 2005 by Rettberg, Angelika

Indeed, in Colombia and elsewhere, grupos stand among the most consistent beneficiaries of some of the reforms' central programs, especially privatization (Baer 1996; Baer and Maloney 1997; Rettberg 2001b). In line with Schamis (1999, 2002), this article suggests that states undergoing liberalization programs did not just cut off import substitution industrialization-related rents, thereby weakening organized business, but allowed new proliberalization coalitions to be formed, for example, with grupos. As a result, "the influence of winners and their capacity for collective action have set off that of the losers" (Schamis 1999, 238). Thus, business-state consultation after the implementation of market reforms has been not eliminated but transformed, effectively limiting organized business's range of action.

Attention to the grupo phenomenon and its effect on organized business suggests that there are important distinctions to be made among different types of business-state relationships, as well as among the effects of market reform on this relationship in Latin America. In addition, it may help explain variation in the particular policy agendas supported by Latin American business communities, the effectiveness and cohesiveness of business in bringing issues to the agenda, and the particular outcomes of policy debates.

COLOMBIAN BUSINESS AND THE SAMPER GOVERNMENT

In what may have been the shortest honeymoon in power for a Colombian president, only two days after his election on June 20, 1994, Ernesto Samper faced the most serious accusations of drug corruption ever levied against a Colombian leader. Several audio tapes hinted that high officials in his campaign had been deeply involved with the Call drug cartel. An estimated $6 million was later shown to have poured into the Samper campaign (Committee on Foreign Relations 1996, 5). Amid great controversy over the possibility that the very heart of the Colombian government had fallen prey to such extreme levels of corruption, the country entered a period of profound political strain.1

That the country was also on the brink of a major economic crisis compounded the Colombian predicament. After having risen 6 percent in 1994 and 5.2 percent in 1995, economic growth slowed to only 0.6 percent in 1998 (see figure 1). "We lost two years" was to become one of the most commonly used phrases at the time (Caballero 1990). The downturn was reflected in growing unemployment (DANE 1999) and an increasing fiscal deficit (Cardenas 1998, 52). All in all, the signs cast doubt on the long-praised stability and resilience of the Colombian economy.

During the first year of the Samper administration, business response to both the political and economic predicaments followed a historical pattern of consultation and low confrontation in Colombian business-government relations (Hartlyn 198$, 1988; Wilde 1978). Gradually, however, business political activity increased, spurred by increasing evidence against Samper and his campaign. Most significant, business activism was bolstered by the perception that the political crisis caused by accumulating evidence of corruption would deepen the economic recession.