Bogota, Colombia – Colombia has long been governed by a highly interwoven, conservative, symbiotic political and business class. But current polls show that, regardless of who wins the upcoming presidential elections, the political landscape is fundamentally changing. That change will alter the way in which political agreements are made. It will also alter the level of influence the business sector has. The oil and gas sector still represents 7% of Colombia’s GDP, and was approximately 20% of government revenue just a few years ago. As such, it will continue to play an important role under any new administration. While the government will have to decide how it wants the sector to evolve, sector players will have to advocate for their vision and role they will play in the economy going forward.

The first round of Colombia’s presidential elections is a little over two weeks away (May 27), and the list of candidates has been whittled down to six names; four still have a real chance of winning. The two candidates that take the most votes in this round will participate in a run-off on June 17. These elections may or may not be a referendum on the FARC peace deal, but the candidates’ position on the topic will certainly be a major factor in how Colombians vote.

The two other candidates are: Humberto de la Calle (Liberal Party), chief negotiator of the
FARC peace deal and Jorge Antonio Trujillo Todos Somos Colombia (a Christian movement)

If past presidential and legislative elections are any indicator, 18-19 million Colombians will hit the polling stations on Election Day. Support is distributed across five main candidates (including De la Calle, who currently has 2.5% of voter intention), such that it is highly unlikely that any of them will take the nine million or more votes needed to win in the first round. To make it to the June run-off, a candidate will need to secure at least four and a half million votes. Polls show a strong ideological division among Colombian voters for the first time: the two front runners represent the extreme political left and right. The two more moderate candidates, Vargas and Fajardo, “appear” to be lagging behind.

Right-wing Iván Duque ranks first in the polls and has the greatest chance of winning in a run-off. Meanwhile, Colombia’s business community continues to publicly project confidence that the leftist “threat” is no longer in play, despite the continued growth in support for Petro. But nothing is written in stone. None of the candidates has secured a commanding position. Polls continue to be volatile. Upcoming debates, coalitions, and other major issues, like implementation of the FARC deal and the recent arrest of Zeuxis Hernández (aka Jesús Santrich), who was poised to take a Senate seat under the peace accord agreement, could all contribute to a surprise electoral outcome. Here’s a quick synopsis of where we stand:

  • Duque is a near shoo-in for the run-off, having secured nearly four million votes in the March 11 Centro Democrático primary. He is the candidate to beat. The addition of his running mate, Marta Lucia Rámirez, will probably help him secure a large majority of the six million party supporters’ vote. Opposition to the peace process and/or the fear of Colombia turning into another Venezuela unify supporters. Security and political pay-back with Uribe still in the mix could be major issues under a Duque administration.
  • Petro emerged from the March 11 Progresista primaries with nearly 2.8 million votes. Despite widely held views that he could not secure votes beyond his loyalist base, polls indicate that his populist left-winged postures and incendiary rhetoric continue to broaden that base. His intellect and speaking capacity, along with his ability to connect with voters and mobilize the masses, cannot be underestimated. He continues to consolidate backing in decisive regions like Bogotá and the Caribbean Coast. As such, he is a true contender for the June run-off. Economic and overall political stability represent the biggest risks under a Petro administration.
  • Neither Fajardo nor Vargas can be counted out. Both have potential sleeper voter bases that may still factor prominently come Election Day. For Fajardo, much will depend on his ability to get the youth vote out (more than 20% of potential voters are under 24 years of age). He has the overwhelming support of university students, spanning all socio-economic classes. It is still unclear whether he can motivate them to vote on May 27. He also has the most potential to secure support from the anti-extremists (left and right). Vargas, on the other hand, has worked relentlessly to build a massive electoral machine that polls may not be capturing. He is almost certain to do better than his poll numbers suggest. But that machinery should not be overestimated, either. This election will likely show that, unlike in the past, Colombia’s famed political machinery alone cannot pick the president.

Beyond the Election: Fractured Power

Whoever wins the presidential elections will find it difficult to build the supermajorities that have been characteristic of Colombia’s government for the last 16 years. Congress will now include leftist factions that compose an unprecedented 17% of the total. That change alone creates a wrinkle. Divergent views over how to double down on or address issues that could (ultimately) dismantle the peace process will cement this new political reality.

Vargas Lleras could have the best chance of approximating a simple majority coalition. He has the most experience working with the Congress, and the strongest political prowess. Those qualities could allow him to secure the support of center and right forces in Congress (including La U and some Liberals). The price? Major power concessions and trade-offs. Duque has a slightly lower chance of securing a simple majority. He will be limited to finding support among the forces on the right of the spectrum and a portion of the La U congressmen. The cost of such alliances will be higher, though. Petro’s polarizing roots will make viable political coalitions nearly impossible.

The likely result: a weaker national government and stronger department and municipal players — a dynamic that began to re-emerge under President Santos. Regional elections in 2019 could deepen the political left’s penetration. Any illusions that Duque could impose Uribe-like influence at the national and local levels are misplaced given, among other things, this new political landscape. Formal economic growth and the government’s heavy debt burden could both be impacted, as evidenced by Moody’s negative outlook issued in February.

Preparing for the Road Ahead

The energy sector will have its best chances under Vargas Lleras, Duque is a distant second in that context. But neither player is likely to wield enough clout to single-handedly stimulate the type of exploratory activity needed to prevent Colombia’s reserves from continuing their downward trajectory. Only a massive find, which has eluded the country over the past couple of decades, could do that.

Recent oil spills and terrorist attacks against oil infrastructure have done little to help the sector’s cause. They have been used as the poster child to intensify public sentiment against hydrocarbons activity, and pushed most presidential candidates to call for the same popular consultations that have significantly disrupted sector activities in recent years (not aided by the current way they are required to be undertaken). On the extreme side, Petro has made it clear that he would drastically reduce the country’s dependence on oil, which, at a minimum, suggests the elimination of central government support for the industry.

The responsibility for sector participants committed to staying in Colombia is clear:

  • Identify and engage with new key stakeholders, many of whom will be completely new to the game, and build an understanding of the new political landscape.
  • Success will increasingly be won at the local level, and less at the national level. This means doubling down on local stakeholder engagement and programs that can help make local communities a true ally, not a perpetual threat.

 IPD continues to re-engineer its Key Stakeholder Mapping tools to help clients better understand the new and evolving dynamics of Colombia’s national and local political landscape.