Gustavo Petro, a former urban guerrilla who was once imprisoned for his political beliefs, won Colombia’s presidential election on Sunday and is expected to usher in the most left-leaning government in the country’s history.
Petro got 50.5 percent of the vote versus 47.3 percent for his only rival, 77-year-old populist businessman Rodolfo Hernández, according to preliminary official results. His tally of 11.3 million votes was the highest in Colombian electoral history. Hernández accepted the defeat within hours in a short video message.
The result represents a sea change for the South American nation, which has been ruled by moderate and conservative politicians, mostly drawn from the established elite, for decades.
A member of the M-19 guerrilla group in the 1980s, Petro, arrested for possessing illegal weapons and tortured in custody, has since served as a senator, congressman and mayor of Bogotá. But he had failed in two previous bids for the top post in order to crack Colombia’s tight-knit political system.
His victory means that Latin America’s third-most populous nation of 50 million people and fourth-largest economy will have its first black female vice president, Francia Márquez, an environmental and social activist who grew up in rural poverty in the violence-plagued South-West.
“This means a new model of government that is unlike anything Colombia has seen before,” said Daniela Cuellar, senior consultant at Bogotá-based business management firm FTI Consulting.
“In Colombia, like many countries in Latin America with a history of inequality, unemployment and violence – all exacerbated by the Covid pandemic – people are looking for other forms of government and Petro’s victory is that.”
The result had Petro’s supporters taking to the streets to celebrate, from the steamy Caribbean and Atlantic coasts to the Andes mountains and remote towns of the Amazon basin.
In the town of Villavicencio, once a hotbed of Marxist guerrilla violence, his supporters braved a torrential downpour to ride through the streets on honking motorbikes. In the highlands of Pasto, near the border with Ecuador, hundreds gathered in the city center and hugged for joy.
The business world will be less pleased. Petro’s radical call for an overhaul of Colombia’s economic model has unsettled investors.
The currency, peso and local assets are likely to suffer, although Monday is a public holiday in Colombia and the full impact may not be felt immediately.
“We will see volatility in Colombian assets in the near term,” said Ani de la Quintana, deputy director of Control Risks in Bogotá. “The peso and markets will clearly react negatively. The peso closed at 3,912 against the dollar on Friday. Who knows how far it will devalue now?”
“We could also see significant capital flight out of Colombia, as happened in Peru during last year’s elections. In the medium term, the rating agencies Moody’s and Fitch could further downgrade Colombia.”
Petro’s policy proposals include a ban on oil exploration, open pit mining and fracking in a nation that relies on fossil fuels for about half of its export earnings. He says the country should instead focus on manufacturing and agriculture.
The 62-year-old has promised sweeping land reform, a wealth tax on the country’s top 4,000 fortunes and the repeal of laws from two decades ago that liberalized the labor market.
Its tax reform plans aim to raise at least $10 billion a year, primarily by imposing taxes on corporate dividends, offshore assets and large estates. The move “would affect 4,000 to 5,000 people in Colombia, but it would bring about social justice, boost production and give us the cash flow we need,” he said in a recent interview with the Financial Times.
He has pledged to use the proceeds to fund universal free higher education and a minimum wage for 1.3 million people, and to cut the government deficit, which reached 7.1 percent of gross domestic product at the end of 2021.
“We hope to have a constructive dialogue with the new government,” said Bruce Mac Master, president of the National Business Association of Colombia. “Petro is an economist. He understands economic relationships. What is important now is that he appoints a really good cabinet.”
Despite his victory, Petro will struggle to implement his more radical proposals. His coalition, the Historic Pact, has just 15 percent of the seats in both chambers of Congress.
“The next few weeks will be crucial to see what kind of alliances he can form,” Cuellar said.
Petro will take over as president on August 7 when right-wing incumbent Iván Duque resigns.
Duque’s government is deeply unpopular despite strong economic growth, and Sunday’s result marked a setback for Colombian conservatism, which had rallied behind the unorthodox Hernández to keep the left in check.