– By Sergio Torres – IPD Latin America Consultant, Bogota

To the surprise of many, including Colombians themselves, current polls indicate that Colombia’s next President could come from the political left. One-time guerrilla fighter and former Bogota Mayor, Gustavo Petro, is riding high in the polls. Mathematician Sergio Fajardo, former Mayor of Medellin, Colombia’s second-largest city, is close behind. Fajardo is a moderate, but Colombia’s most important left-winged party, Polo Democrático, forms the backbone of his Colombia Coalition.

Colombians have long held that the left could never take the Casa de Nariño Presidential house. But the 2018 elections could be a game changer. Corruption scandals, inequality, and impoverished masses, along with a widespread distrust of the status quo and the political establishment (among other factors) seem to have formed a wave of change.

Potential ramifications are many. Because the traditional parties have held Colombia in their grip for decades, it is unclear how the business playing field might be redrawn. A new generation of leaders with no connection to the political powers-that-be may find themselves at a loss.

March 11 Congressional Elections Test the Waters

On March 11 Colombians will elect a new Congress that will remain in place until 2022. It seems change is not relegated exclusively to the presidential polls.  A legislative shift also appears to be in the making. Today’s majority parties are bleeding internally, and alternative coalitions are triggering enthusiasm across the country. With an eye toward winning the presidency and securing governability, these movements are striving to increase their congressional presence (which today adds up to less than 7% of total seats).

They will probably be successful – but not enough to become a majority. Their results, however, will reveal the level of public support for their presidential candidates, and could act as a bellwether for the May 27 presidential elections.

Two parties will also hold presidential primaries on March 11. Petro’s Progresistas is one of them. The right-winged “No” coalition, championed by former President Alvaro Uribe, is the other. While Petro’s nomination appears to be a sure-thing, three pre-candidates who reject the FARC-government peace agreement will compete to represent the “No” coalition. The primary results will reveal those parties’ chances in the big race, beyond anything the polls have indicated.

The Presidential Elections Will Be a Peace Plebiscite 2.0

Colombia’s presidential race is obviously in an early stage. Candidates will compete until May to make it to the June runoff. The right still has much to define. Once the “No” coalition candidate is identified, his or her numbers will increase. Former Vice-President and right-winged Germán Vargas Lleras possess a well-built electoral machine that will gain him points. The Venezuelan exodus will also favor a heavy-handed figure.

In the runoff, the country’s strong division between those who support the peace agreement and those who oppose it will be the determining force. Fajardo and Petro support the treaty; Vargas Lleras and Uribe’s candidate will leverage the sentiment of the other half.

The presidential vote may come down to a referendum on the peace treaty.

No Time for Denial

The so-called “establishment” parties have rarely been a model of transparency in Colombia. But how the emerging forces might approach a weakened economy and a troubled energy industry remains something of a mystery.

The oil industry does not fare well in either Fajardo or Petro’s discourse. Fajardo holds that it is a “necessary evil”; Petro is openly against it. Their populist postures toward issues like the environment, local communities, and popular consultations, raise questions as to how important contract sanctity will be to them — or how their ambitious social programs could impact corporate taxes. Potentially strained relations with a hostile Congress could also affect the country’s level of political risk.

The business community is ill-prepared to confront the changes and challenges that a moderate leftist or openly populist administration could bring. Connections and relationships between the two forces are scarce or nonexistent. But regardless of who wins the presidency, it is clear the left will no longer be sidelined.


Elections in the Americas 2018

IPD Latin America will analyze presidential and legislative elections throughout the Americas in 2018.  

The region’s age-old political parties do not necessarily have a lock on any of the upcoming elections. Sociopolitical conditions and global trends could usher in a wave of non-establishment administrations — with varying results. The potential for disruption in the energy industry is great. Thorough market assessments will become all the more critical to successful decision-making. Energy producers and consumers alike must prepare for paradigms with unfamiliar risk and new opportunities.

Please contact David Voght at dvoght@ipdlatam.com for information on IPD’s Elections in the Americas 2018 multi-client risk analysis.