Colombia’s extractive sectors remain a cornerstone of the country’s economy and a vital source of government revenue. Simultaneously, energy transition commitments, including those stemming from COP 26, will demand complex policy decisions to find an equilibrium going forward between revenue generation, emissions reduction, and the cultivation of new, sustainable economic activities.
Amidst this backdrop, Colombia’s 2022 elections are likely to usher in a new balance of power between the political left and right not seen in the country’s history. Prominently on the minds of many market participants is what will happen if a left leaning candidate is elected president.
How capable would the front runner be at moving his or her agenda forward with an opposition-controlled Congress? Would he or she resort to presidential powers and decrees? Overall, what will the impact of these elections be on political stability and contractual sanctity?
How will the next government stimulate economic growth, reverse deficit spending, and rein in Colombia’s heavy debt in a post-pandemic world? And what will prevent political stalemate from occurring at a time when the country needs to continue recovering and growing economically? Views on extractive sectors and energy transition priorities, plus the path forward vary widely between the remaining 22 presidential candidates still in the race.
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