Behind the scenes in Bogotá

Colombia is set for a leftward shift, what does this mean for markets?

Last week, Colombia’s leftist presidential frontrunner Gustavo Petro (“Petro”) won an emphatic victory in the primary elections, securing the nomination of the left-wing Historic Pact coalition. Even if, as opinion polls suggest, Petro wins the presidency, it is almost certain that he will not command a congressional majority. Given inevitable negotiations with opposition parties to push through legislative reforms, a centrist move is on the cards necessitating horse-trading with a milieu of congressional factions.

A former ministerial private secretary explained, “The Historic Pact primaries were very significant. Petro received more than four and a half million votes – almost the same number of votes he received during the first round of the previous presidential election. It reflects the fact that he, and his policies, continue to enjoy support across Colombia. The challenge is that he will now need to double the votes he has received so far to emerge victorious from the first round.”

“Petro […] continues to enjoy support across Colombia. The challenge is that he will now need to double the votes he has received so far to emerge victorious from the first round.”

Former ministerial private secretary

The primaries have shone the light on several political figures, who vote count in the primaries took pundits by surprise. Among them, Francia Márquez, an Afro-Colombian environmental and human rights activist, who placed second on the Historic Pact results list. “It is difficult to say at this stage whether her votes will translate into support for Petro or for Sergio Fajardo – the nominee representing Colombia’s centre-left alliance,” added the former ministerial private secretary. Either way, it is yet another sign that non-traditional candidates are gaining increasing electoral traction in the country.

The second most voted for alliance during the primaries was Team for Colombia which received some 1.8 million votes. Federico Gutiérrez (better known as “Fico”) fared better than expected. The former ministerial private secretary explained, “Fico is the one to watch. He is likely to sweep up the anti-Petro votes from alliances that did less well during the primaries. He can also count on the support of conservative Oscar Iván Zuluaga who recently resigned from his presidential campaign. I am almost certain that the Democratic Center will end supporting Fico.”

Fico, a former mayor of Medellín, is a seasoned political operator in Colombia. Given his broad appeal – and the fact that he is less tainted by the infighting of the traditional larger parties – among conservative-leaning voters he could pose a major challenge to Petro. Despite his independent run, he will however benefit from the well-oiled campaign machinery of the Conservative Party, the Democratic Center and the Party of the U who will support his candidacy.

Indeed, should Petro win the presidency, Fico is likely to emerge as congressional kingmaker. A former high-level official in the Ministry of the Interior explained, “Fico is a person who, unlike current president Iván Duque, is willing to sit down and talk with people from other parties. He is much less of an ideological purist. He is respected for his clarity of thought and in his pragmatic approach to policy. I think congressional negotiations could bear fruit in a way that has been difficult during the Duque presidency.” His negotiating skills will be particularly important during discussions with congressional heavyweights César Gaviria and Vargas Lleras.

“Fico is a person who, unlike current president Iván Duque, is willing to sit down and talk with people from other parties.”

Former official, Ministry of the Interior

In terms of policy orientation, the economy and relations with Washington stand out. Fico’s association with conservative elements in the current administration means it will be harder to distance himself from the government’s economic policies – perceived, rightly, or wrongly, to have exacerbated sky-high levels of inequality. On the other hand, “… if the anti-Petro cohort can present an attractive and credible plan to deal with soaring inflation (exacerbated by the war in Ukraine), the electorate is likely to respond positively especially given concerns over Petro’s tax and spend platform,” added the ministry official.

The Duque administration’s focus on subsidising gas prices – in part a sincere effort to help those struggling to top up tanks, in part politically motivated to dull the potential for potentially paralysing street protests – has created an economic distortion that will seriously undermine the fiscal capacity of the next government. “A Petro administration in response, will have to take extraordinary measures to fulfil campaign promises,” explained the former ministry official.

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