Colombia is bracing for the prospect of a radical change in economic and political direction after electing a former guerrilla to the presidency on a platform of transforming the country’s business-friendly model.
Gustavo Petro, 62, defeated construction magnate Rodolfo Hernandez in Sunday’s runoff vote, giving him a shot at enacting a program that includes plans to tax big landowners, halt the awarding of oil exploration licenses and revive ties with the socialist government of neighboring Venezuela.
“It’s historic,” said Silvana Amaya, an analyst at Control Risks consultancy in Bogota. “Colombia has traditionally voted very conservative. This marks a big change, a move to a very different economic model.”
Illustration: Mountain People
Petro took 50.4 percent to 47.3 percent for Hernandez, Colombia’s election authorities said. He assumes office on Aug. 7, along with his running mate, Francia Marquez, a 40-year-old environmental activist who is to become the nation’s first Afro-Colombian vice president.
“Real change is coming,” Petro said in a victory speech in Bogota. “This is another Colombia.”
Other major Latin American nations, including Brazil, Mexico, Argentina and Venezuela, have all elected leftist leaders at various times, but Colombia has until now only been governed by conservatives and liberals. Petro’s election is also likely to shake up relations with Washington in a country that has for decades been the region’s strongest US ally.
He is mistrusted by many investors, especially since his plan to gradually phase out oil and coal would deprive the nation of about half of its export revenue. On top of reforming the pension and healthcare systems, Petro also wants to protect local farmers and industry using import tariffs, and renegotiate trade agreements, a radical shift for a country that has liberalized commerce in recent decades.
However, it is unclear how much of his agenda he would be able to implement given that he and his allies lack a majority in Congress.
His coalition controls 27 percent of seats in Congress, while about 57 percent belong to market-friendly parties that endorsed a conservative candidate who lost in the first round and an additional 9 percent are from the Green Party, Banco BTG Pactual SA analysts Daniel Guardiola, Alonso Aramburu and Daniel Callamand said.
“Petro’s agenda seems ambitious as it seeks to reform the main pillars Colombia was built upon,” the analysts said in a research note. “Although some proposals are more radical than others, we believe there will be a degree of moderation, as a divided congress with a majority from ‘pro-market’ parties will provide checks and balances against radical proposals.”
Other institutions that will provide a backstop: The constitutional court may block some of his plans, while the central bank’s independence is enshrined in the constitution.
Petro reached out to centrists during the latter stage of the campaign, alleviating some market fears.
Investors will be watching for guidance on who is appointed to the finance ministry and the rest of his economic team, said Ana Vera, chief economist at Panama-based IN ON Capital.
“We expect more volatility in local markets and the weakening trend of the peso would continue,” she added.
Colombia now joins the ranks of nations worldwide that have voted in anti-establishment leaders. In Latin America, the demand for an alternative resonated as the COVID-19 pandemic caused a spike in poverty that has been compounded by inflation at multiyear highs. In Peru, a school teacher from a Marxist party became president, while Chile elected a former student protest leader.
Colombia, by contrast, has for decades been a bulwark of conservatism, so Petro’s win shows it is undergoing “a deep transformation in political values, in political expectations,” said Andres Mejia, a political consultant who teaches at the business school of Bogota’s Andes University.
With his platform, Petro harnessed a desire for renewal fueled by inflation that has accelerated to its fastest pace in more than two decades, and corruption scandals that have undercut support for the nation’s traditional ruling class under outgoing Colombian President Ivan Duque. He promised that Colombia would lead the fight on climate change.
Still, the most likely scenario for Petro is that he becomes a Duque 2.0, said James Bosworth, the founder of Hxagon, a political risk analysis company that covers emerging markets.
“He’s someone who comes to office with lots of promises and then fails to deliver,” Bosworth said, citing Petro’s lack of a congressional coalition, his leadership style “and the massive geopolitical winds of recession and high inflation that are playing against him.”
Investors preferred his opponent, Hernandez, with the peso soaring as the 77-year-old businessman became the favorite after the May 29 first round. However, his campaign was then damaged by gaffes and scandals, and was further undermined by his lack of a concrete program beyond a focus on tackling graft.
The IMF forecasts growth of more than 5 percent this year, the fastest pace among major economies in the Americas. Even so, nearly half of Colombians believe conditions are getting worse, a recent poll by Gallup showed.
Colombia is one of the closest allies of the US and has received about US$13 billion in US aid since 2000, the non-governmental organization Washington Office on Latin America said. US Secretary of State Antony Blinken issued a statement saying the US looked forward to working with the president-elect to further strengthen ties.
Still, Petro’s election is likely to destroy the bipartisan consensus under which Democrats and Republicans backed military cooperation and joint efforts to fight illicit drug trafficking, Colombia Risk Analysis director Sergio Guzman said.
“The Republicans are going to be very reticent about approving funding for Colombia,” he said.
Petro was a member of a guerrilla group in his late teens and 20s. After demobilizing as part of a peace process, he entered politics, first winning a seat in Congress then eventually becoming mayor of Bogota. He has a net worth of about US$59,000, according to his 2020 tax return, which he posted on Twitter.
His other proposals include offering jobs for anyone who wants one in the public sector, and reforming the health system to give the state more of a presence.
The result is “great uncertainty for the country and for the Colombian economy,” said Jorge Restrepo, director of CERAC, a Bogota-based political research group. “This is uncharted territory.”
As Taiwan is facing global crises from the COVID-19 pandemic to Russia’s invasion of Ukraine, it is again time to take stock. In terms of public health, Taiwan has made it through the COVID-19 challenge quite well. By combining masking, vaccinations and border controls, it has achieved a sufficiently protective herd immunity and is expected to end quarantine requirements for incoming travelers by the end of the summer. What about Ukraine? Here, Taiwan must assess four key players in its region. The first is Russia, which must be seen as a developing enemy. When the Soviet Union broke up in 1991, Ukraine declared
During an online keynote speech on June 12, Legislative Speaker You Si-kun (游錫堃) said that when he was premier, he already knew that the Yun Feng (雲峰, Cloud Peak) medium-range supersonic land-attack cruise missile developed in Taiwan could reach Beijing. If Beijing were to attack Taiwan, Taipei would respond by firing the missiles and China would regret its aggression, he said. You’s comments were met by immediate criticism from political commentator Lai Yueh-tchienn (賴岳謙), who said that the Cloud Peak relied on guidance from the US’ Global Positioning System (GPS) to find its target. If war broke out in the Taiwan Strait,
China’s third aircraft carrier, the Fujian, was launched on Friday. With a total displacement of more than 80,000 tonnes, the vessel is the largest of China’s three aircraft carriers. According to reports, the Fujian is about 300m long and 78m across at its widest point. It is conventionally powered, with a maximum speed of about 30 knots (55.6kph) and can carry 60 aircraft — including about 40 fighter jets, helicopters and airborne early warning and control aircraft. The deck of the carrier is equipped with an electromagnetic catapult system, which can speed up the take-off and landing of fighter jets. Once it
Two awards for contribution to the study of Sinology were announced on Monday. The first was for British art historian Jessica Rawson, named this year’s winner of the Tang Prize in Sinology. The Tang Prize was established in 2012 by Taiwanese entrepreneur Samuel Yin (尹衍樑). The second was for Slovenian Sinologist Jana Rosker, who won the Taiwan-France Cultural Award — established by the Ministry of Culture and the Institut de France’s Academy of Moral and Political Sciences — for her work introducing Taiwanese philosophy to Europe. Rosker said that Taiwan has integrated Western philosophy and Buddhism, Confucianism and Taoism into a
RSS