Analysis-Colombia's first leftist president targets inequality, leaves
investors on edge
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[June 20, 2022]
By Julia Symmes Cobb and Oliver Griffin
BOGOTA (Reuters) - The election of
Colombia's first leftist president, Gustavo Petro, is indicative of
widespread yearning for a more equal and inclusive society, analysts and
business leaders said, but the former guerrilla will need to act fast to
reassure investors.
Petro, a 62-year-old former mayor of the capital Bogota and current
senator, won some 50.4% of votes on Sunday, handily beating construction
magnate Rodolfo Hernandez.
The election of a former guerrilla marks a radical change for a country
still scarred by decades of conflict and highlights the depth of
frustration with the right-leaning political establishment accused of
overseeing a wide gap between rich and poor.
Petro has pledged to fight inequality with free university education,
pension reforms and high taxes on unproductive land in the Andean
country, where nearly half the population lives in poverty.
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His proposals - especially a ban on new oil projects for environmental
reasons - have startled some investors, though he has promised to
respect current contracts.This campaign was Petro's third presidential
bid and his victory adds the Andean nation to a list of Latin American
countries that have elected leftists in recent years.
Petro will take office at a time when Colombia is struggling with low
credit ratings, a large trade deficit and national debt which is
predicted to end the year at 56.5% of GDP.
Oil accounts for nearly half of exports and close to 10% of national
income.
"Colombia was governed for so many years by the economic and political
elite," said Gimena Sanchez-Garzoli, Andes Director for the think tank
Washington Office on Latin America. "In many ways this election is
basically the voice of most of the population in the country, especially
the rural poor, women, Afro-Colombians, the indigenous."
"People didn't want a change at any cost, they wanted a change that
would actually be with actual proposals which include making the peace
accord a priority," said Sanchez-Garzoli referring to the 2016 peace
deal with the Revolutionary Armed Forces of Colombia (FARC), which
brought an end to that group's role in the nearly 60-year-old internal
conflict.
Petro has pledged to fully implement the FARC accord - which detractors
accuse current President Ivan Duque of failing to adequately support -
and to seek talks with the still-active ELN rebels.
"Petro's election may have just saved the peace process," said Oliver
Kaplan, associate professor at the University of Denver's Josef Korbel
School of International Studies.
On Sunday night, as he celebrated his win, Petro told
his supporters: "Peace is someone like me being able to be president."
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![](../images/062022PIX/news_f15.jpg)
Colombia's Gustavo Petro of the Historic Pact coalition shows his
ballot before casting his vote at a polling station during the
second round of the presidential election in Bogota, Colombia June
19, 2022. REUTERS/Luisa Gonzalez/File Photo
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BUSINESS JITTERS
Petro regularly praises the mostly young protesters who have taken
to the streets over the last three years to decry inequality and
police violence, in demonstrations where more than 40 people were
killed.
The president-elect, who was arrested by the military in 1985 while
carrying weapons for the M-19 rebels, has said he was tortured
during his 16-month detention. His victory has high-ranking armed
forces officials bracing for change.
"There's a segment of the population that is totally opposed to him
because of his M-19 past," Kaplan said. "Maintaining security and
protection of civilians will depend on good civil-military
relations, and it's uncharted waters in that regard."
But Petro's proposals will face challenges, not least because of a
deeply divided congress where a dozen parties hold seats.
"Petro is going to have a very strong opposition from day one, we're
going to have a congress that all of a sudden is disjointed from the
executive branch," said Colombia Risk Analysis founder Sergio
Guzman.
"I think this means people's priorities have moved beyond the
conflict," Guzman said. "This marks a really stark departure from
where we've been as a country."
Business leaders and the market were awaiting ministerial
appointments, especially for key positions like finance minister,
and have predicted volatility in the peso and in bonds when trading
opens on Tuesday after a holiday weekend.
"It will be very important that total confidence between everyone is
restored, that there is confidence for businesses, citizens, that
there is confidence for investors, that there is confidence with the
rule of law," Bruce Mac Master, president of the Colombian Business
Association (ANDI), said in a statement following Petro's victory.
"In us he can expect a constructive partner," he said.
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Petro was emphatic that business and development had important roles
to play under his government. He has pledged to strengthen
agriculture, tourism and manufacturing.
"We are going to develop capitalism in Colombia," told supporters on
Sunday. Development is needed to overcome the "feudalism" and
"pre-modernity" from which Colombia still suffers, he said.
(Reporting by Julia Symmes Cobb and Oliver Griffin, additional
reporting by Nelson Bocanegra, Luis Jaime Acosta and Carlos Vargas;
Writing by Julia Symmes Cobb; editing by Stephen Eisenhammer)
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