Colombia's Petro picks market-friendly Ocampo as finance minister

Colombia's leftist President-elect Gustavo Petro on Thursday named Jose Antonio Ocampo as his finance minister, a market-friendly choice who will have the challenge of maintaining the strong performance of Latin America's fourth-largest economy and passing ambitious fiscal reforms in Congress.

Colombia's leftist President-elect Gustavo Petro on Thursday named Jose Antonio Ocampo as his finance minister, a market-friendly choice who will have the challenge of maintaining the strong performance of Latin America's fourth-largest economy and passing ambitious fiscal reforms in Congress. Ocampo, 69, who has a Phd in economics from Yale University, is one of Colombia's most celebrated economists who previously served as agriculture minister, minister of finance and director of the national planning department. He has also held positions in the United Nations.

He has recently worked as a professor at Columbia University in the United States. "This will play well in the market, he's a technical guy, an economist that everyone recognizes and has always been progressive, that seems good to me," said Sergio Olarte, Scotiabank's chief economist for Colombia.

During the election campaign Petro pledged an ambitious tax reform worth some 50 trillion pesos ($12.1 billion) to finance social projects and put public finances in order. He also proposed a pension reform to expand coverage to greater numbers of elderly poor people, which has caused uncertainty among business and investing communities.

"Jose Antonio Ocampo will be our finance minister (to) build a productive economy and an economy for life," Petro said in a message on Twitter alongside a picture of the two men standing side by side. Colombia's currency fell 0.75% to 4,148 pesos to the dollar in early trading, in line with global trends due to growing risk aversion amid fears of a recession in the United States.

In contrast, the MSCI COLCAP index rose 1.68% to 1,369.45 points. The election of Petro, a former M-19 guerrilla, marks a radical change for a country still scarred by decades of conflict. Nearly half of Colombia's roughly 50 million people live in poverty and many voters are frustrated with the right-leaning political establishment.

The President-elect has promised to tackle deep inequality with pension redistributions, free university education and other social programs. Last week Petro named long-time politician and peace envoy Alvaro Leyva as his minister of foreign affairs.