When Colombia goes to the polls on 17 June in the runoff in its presidential election, voters will choose between staunch conservative Iván Duque and guerrilla fighter turned centre-left politician Gustavo Petro. What will their decision mean to foreign businesses in the South American country?
On 17 June Colombian voters will return to the polls to elect their next president in a second-round runoff election. The frontrunner is Iván Duque, a staunch conservative mentored by the influential ex-president Álvaro Uribe. Facing Duque on the ballot paper is Gustavo Petro, a former guerrilla fighter and ex-mayor of Bogotá who is standing on a centre-left platform. With only a matter of days to go until the vote, Duque consistently leads the polls by around 10 per cent and appears to be the most likely victor of Sunday’s race. Despite this, the election result is far from a foregone conclusion. Polling in Colombia is notoriously unreliable, as demonstrated by the surprise victory of “No” voters in the country’s 2016 peace agreement referendum, so Petro’s candidacy deserves serious examination. For organisations with interests in Colombia, the election result will have significant consequences for the short-, medium- and long-term investment and operational environment.
Like many other Latin American countries, Colombia’s political system is modelled on that of the United States, featuring a bicameral legislature and a powerful presidency with a 4-year term.
Following a momentous two years in the country’s national life, during which time the government of Juan Manuel Santos signed a peace agreement with the FARC guerrilla movement at the second attempt, Colombians returned to the polls in March 2018 to elect both houses of congress ahead of May and June’s presidential votes. While no party or alliance achieved an overall majority in the legislative elections, the conservative parties formed the largest bloc in both houses, securing slightly more than 40 per cent of seats in both chambers and offering the first indication of the national mood ahead of the presidential election.
After four months of campaigning, the first round of the presidential election was held on Sunday, 27 May. As none of the seven candidates secured the 50 per cent majority needed to win the election outright, it moved to a second round run-off between the two leading candidates. Iván Duque, of the conservative Democratic Centre party (Centro Democrático), secured 41.3 per cent of the vote and proceeds to the runoff as the frontrunner. Duque’s opponent in the second round, Gustavo Petro of the centre-left Progressive Movement (Movimiento Progresistas), won 31 per cent. The second round runoff will be held this Sunday (17 June), with the victor being sworn in on Tuesday, 7 August.
Frontrunner Iván Duque is a 41-year-old first-term senator and former assistant to ex-president Álvaro Uribe. Prior to entering national politics, Duque worked at the Inter-American Development Bank (IDB) and the United Nations, and can therefore credibly claim not to be part of the country’s political establishment. As the handpicked candidate of the Uribe-led Democratic Centre party, Duque benefits from his mentor’s popularity and will secure large parts of the “No” vote from the 2016 peace accord referendum. While Duque himself can be somewhat described as a political outsider, members of his party – among them former president Uribe – are currently under investigation for corruption.
Duque’s main criticism of the agreement is that the punishments for former guerrillas are overly lenient
Despite having opposed the 2016 peace deal, Duque is more likely to amend the agreement’s most controversial parts than dismantle it completely, a move which would bring condemnation from key allies in the international community. Duque’s main criticism of the agreement is that the punishments for former guerrillas are overly lenient and that, in the accord’s current form, rebels found guilty of crimes against humanity could avoid justice by assuming one of the FARC’s five reserved congressional seats. To counter these perceived flaws in the peace deal, Duque has suggested limiting the agreement’s provisions on the FARC’s political rights and forcing former guerrillas to pay reparations to their victims.
On the policy front, Duque runs on a pro-business platform, promising to lower corporate taxes from 34 per cent to either 27 or 28 per cent and, unlike Petro, support further extractive projects. Duque also takes a hard line on security and is likely to follow his mentor Uribe’s militaristic approach to combating drug trafficking. While critics have focused on potential budget shortfalls arising from Duque’s proposed lowering of corporate tax, he has pledged to reduce government spending to maintain a balanced budget.
While Petro’s image is that of a revolutionary, anti-establishment figure, his policy platform is less extreme than his reputation might suggest
Facing Duque in Sunday’s race is Gustavo Petro, a former guerrilla fighter for the M-19 rebel group and ex-mayor of Bogotá, a position from which he was removed in 2013 over the mismanagement of garbage collection services. Petro, who has also held seats in both houses of congress, ran on a centre-left platform and is a supporter of the FARC peace accord. Petro has sought to portray himself as an anti-establishment figure, and his background and past work to reveal the close ties between corrupt politicians and drug traffickers have allowed him to differentiate himself from the rest of the political class.
While Petro’s image is that of a revolutionary, anti-establishment figure, his policy platform is less extreme than his reputation might suggest. The central issues in Petro’s campaign have been the fight against endemic corruption, climate change, and a rebalancing of Colombia’s economy away from extractive industries and towards a model based on agriculture and knowledge. Petro’s proposals for the energy industry would have significant consequences for the sector, however, with the candidate seeking to ban fracking and open-pit mining and transform petroleum company Ecopetrol into the region’s largest solar power producer.
While Petro had previously expressed admiration for the late Venezuelan leader Hugo Chávez, he recently distanced himself from the policies of Venezuela’s current administration and criticised the direction that ‘21st Century Socialism’ has taken. Nevertheless, Petro’s platform contains various proposals favoured by the traditional Latin American left, most notably land reform. Rather than advocate nationalisation, Petro’s proposed land reform would tax unused agricultural land, thereby seeking to incentivise either expanded production or resale to the state with subsequent redistribution to small-holders.
Few issues are as critical to Colombia’s business outlook as the country’s security situation. Whichever candidate triumphs on 17 June, two main issues will have to be tackled: the first is the future of national reconciliation with the FARC accord and a possible agreement with the ELN, the other major remaining guerrilla force; the second is the situation on the border with Venezuela, including the influx of a significant number of refugees.
While neither of the candidates favours the dismantling of the existing FARC accord, a more restrictive implementation by a Duque government, including the prosecution of former FARC fighters that are protected under the current agreement, could encourage those fighters to join the ELN. In the scenario of a strengthened ELN and a government unwilling to negotiate peace, public security would likely deteriorate, harming the business climate.
With the situation in Venezuela unlikely to improve significantly in the short term, migrant flows to Colombia are set to continue for the foreseeable future. Neither Duque nor Petro offers a convincing solution for the integration of Venezuelans into the country, and in any case, an effective control of migration would require significant investment in the security apparatus, something which Petro refuses on political and Duque on budgetary grounds.