As anticipated by FSG, Colombians went to the polls on March 11th and elected a fragmented congress. None of the political parties will have a majority in either the Senate or the House of Representatives. A divided Congress will make it difficult for the next administration to enact needed economic reforms, unless the new President is able to build a majority by going above party lines. This was the strategy followed by the current President, Juan Manuel Santos, to pass key economic legislation such as the tax reform of December 2016.
Congressional elections were also a good thermometer to assess the chances of different presidential candidates ahead of the first round of presidential elections on May 27, and the expected second round on June 17. Here are four main takeaways from the congressional elections:
- The Centro Democrático (CD) party came out stronger than expected from the polling data. The strong performance of Iván Duque in the internal primaries held the same day of congressional elections, 4 million votes, now makes him a strong contender for the presidential elections.
- Gustavo Petro, the left-leaning candidate, showed his political muscle by winning almost 2.9 million votes in the Colombia Humana Though he is a strong contender, none of the other candidates are willing to build a coalition with him. So even if he makes it to the second round of the presidential elections, his chances to win are weak.
- Despite the unpopularity of both President Santos and his party, the Partido de la U, their 1.8 million votes make them the possible kingmaker in the second round of the presidential.
- Sergio Fajardo, the most centrist candidate, could bounce back if his campaign begins to work with the other centrist parties, the Partido de la U and the Partido Liberal. Fajardo is the candidate of an alliance between the Partido Verte and Polo Democrático, which received just over 2 million total votes. An alliance with the Partido Liberal, which obtained 1.9 million, and the Partido de la U with its 1.8 million votes, would put a centrist coalition around Fajardo as the leading contender.
Congressional elections increase probability of a center-right coalition winning the Presidential election
The CD and its new standard bearer, Iván Duque, were the big winners of Sunday elections. The CD became the party with most senators (19) and representatives (32). Duque surpassed expectations, obtaining 4,038,101 votes in the primaries. Duque’s savvy political move of selecting Marta Lucía Ramírez as his running mate, who finished second with 1.5 million votes, basically guarantees enough votes to make it into the second round of the presidential elections in June.
What happens in the second round depends, in part, on how well Duque is able to expand his support amongst other center right parties. The other main parties in the center-right are the Partido Conservador and Cambio Radical. Cambio Radical is led by Germán Vargas Lleras, a former vice president under Santos. Vargas Lleras is currently running for the presidency, but if he does not make it to the second round, he would very likely endorse Duque, providing him with some extra boost in June.
The second uncertainty is who would Duque confront in that runoff. If Duque faced the left-leaning populist Petro, Duque would be in a good position to win, as the moderate electorate would lean right. If he faced the centrist Fajardo, the runoff election would be much more competitive.
Multinationals should not discard Fajardo from the presidential race yet
The presidential race has been effectively narrowed down to five candidates: Iván Duque, Gustavo Petro, Sergio Fajardo, Germán Vargas Lleras, and Humberto De La Calle. These candidates will all have to court other parties, in order to build a coalition capable of winning the first and second rounds of the presidential elections. The party of the current president, the Partido de la U, won enough votes to play a significant role in the determination of the next president.
The right-leaning Duque and the left leaning Petro, the most polarizing figures in Colombia’s political landscape, are unlikely to reach an agreement with major parties like the Partido de la U because their campaigns are built on an assault to the Santos presidency.
The Partido de la U do not currently have a presidential candidate. But several coalitions seem possible. The key issue for any broad centrist coalition is continuing support for the peace accord. A coalition could be formed in the coming weeks. For example, Fajardo could choose De la Calle, the key negotiator of the peace accords, as his running mate. This could be enough to gain the support of the Partido de la U. Even if a broad centrist coalition doesn’t form before the first round, if Fajardo made it into the second round against either Duque or Petro, the support of the Partido de la U is a safe bet.
What to expect after the elections?
Based on FSG’s scenario analysis, the most likely outcome of these elections is a continuation of business-friendly policymaking. The key question mark is on the implementation of the peace-accord; will Colombia’s next president try to revise the agreement? If so, what could be the social and economic consequences?
Our Colombia Election Scenarios piece examines these issues, providing clients with concrete economic forecasts and actions to take in each scenario.
FSG will continue to track developments in the run up to presidential elections in May and June. For more in-depth briefings FSG clients can contact their client services director. Not a client? Please contact us to learn more or purchase a single copy of the reports listed above.