Ex-rebel Gustavo Petro faces uphill task to meet Colombian voters’ expectations
Gustavo Petro sees his victory in Colombia’s presidential election as the culmination of a life-long struggle for social justice that began as a student activist and clandestine guerrilla rebel.
Investors, meanwhile, are asking whether the leftwing senator’s pledges to raise taxes, impose import trade tariffs and shift the economy from oil and mining towards tourism and agro-industry spell the end of the country’s appeal as a place to do business.
“What’s coming is true change, real change,” Petro, 62, promised supporters in a victory speech after he secured a narrow victory on Sunday with 50.4 per cent of the vote. “We will not betray this electorate, which has cried out to the country . . . for Colombia to change from today.”
Underlining the scale of the political transformation, the president-elect was flanked by Francia Márquez, a 40-year-old environmental activist who will become Colombia’s first black vice-president.
The election was historic in other respects. Colombia, a country that endured a five-decade war between leftist guerrillas and the military, chose as the next commander of its armed forces a man who was tortured and imprisoned by the army because of his activities as a clandestine member of the M-19 guerrilla group, which disbanded in 1990.
Petro was careful to balance his pledges of radical reform in the speech with promises to unite a country divided by a bitter election battle. His opponent in the second round was Rodolfo Hernández, a 77-year-old populist outsider who made his fortune building low-income housing and fought an eccentric campaign conducted mainly on social media.
Ultimately, Hernández’s proneness to gaffes and ill-tempered outbursts appeared to have cost him victory. He secured 47.3 per cent of the vote, with the remaining ballots cast as blanks.
By choosing candidates from outside the political mainstream, Colombian voters voiced their frustration at deep inequality, inadequate public services, rising inflation and persistent corruption — a trend seen in other recent Latin American elections from Honduras to Chile.
But delivering on the hopes of millions of Colombians who have long felt ignored by the country’s political elites and denied a chance to improve their lives will be a major challenge.
Although Colombia’s economy is forecast to be Latin America’s fastest-growing this year, the government is short of money after lifting spending to combat the effects of the Covid-19 pandemic. Public debt levels are a relatively high 64 per cent of gross domestic product, and businesses are reluctant to invest until they understand how radical the next government will be.
Colombia is the US’s most important ally in South America. It has been a key partner in the war on drugs and in Washington’s campaign to force regime change in socialist-ruled Venezuela, although Petro opposes both policies. While Antony Blinken, US secretary of state, was quick to congratulate him, officials in Washington have privately expressed unease at the prospect of a Petro presidency.
Ricardo Ávila, senior analyst at El Tiempo newspaper, said Petro’s “first priority would be to calm the markets”, his second to seek dialogue with those who did not vote for him, his third to mend fences with the armed forces and his fourth to manage expectations.
“All of this is urgent if he doesn’t want to inherit a house on fire, after throwing so many Molotov cocktails at it [during the election campaign],” he told the Financial Times.
Petro, who takes office on August 7, has promised to raise taxes on richer Colombians and levy unproductive large rural estates to increase revenues by 5 percentage points of GDP. He also wants to impose import tariffs to protect domestic producers, renegotiate a trade agreement with the US and offer government jobs to millions of unemployed.
Most of these measures require approval from a fragmented Congress, where Petro’s coalition holds just 15 per cent of the seats. There are other smaller leftwing groups that might support him but Congress is still dominated by traditional conservative and centrist forces that might make his life difficult.
His call for interest rates not to be raised further — they have shot up from 1.75 per cent to 6 per cent in nine months — is likely to be ignored by the independent central bank, while the constitutional court provides a further check on his power.
Petro is proud of his achievements in reducing poverty and building low-income housing while mayor of Bogotá from 2012 to 2015. But detractors remember a conflictive leader who churned through dozens of cabinet appointments and was briefly forced from office after a bungled attempt to bring city refuse collection in-house from outside contractors.
“We think markets and economic agents will continue to take a wait-and-see attitude pending more concrete steps,” said Ben Ramsey, head of Latin America economic research at JPMorgan. “Most prominently would be Petro’s decision for his economic cabinet.”
Seeking to calm market nerves — the Colombian peso has fallen 4 per cent this year against the dollar on political uncertainty — Petro last week unveiled a shortlist of moderate candidates for the key post of finance minister. These included respected former centre-left presidential candidate Alejandro Gaviria, as well as former finance ministers José Antonio Ocampo and Rudolf Hommes.
Petro’s task now will be to fulfil voters’ high expectations, bring peace to Colombia’s violence-prone countryside and steer its economy on to a greener and fairer path without hurting growth.
Gabriel Boric, his ideological soulmate who became the president of Chile in March, faced similar challenges but has seen his ratings plummet amid a sharp economic slowdown and rising crime.
Ani De la Quintana, associate director at the Control Risks consultancy, said that “if Petro does not send the right signals quickly, his honeymoon could be very short — just like Gabriel Boric’s”.
Additional reporting by Gideon Long in Bogotá