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Colombia vote result could dent leftist's presidency bid, pleasing market
Gustavo Petro, presidential candidate, speaks during a press conference after knowing the results of the legislative elections in Bogota, Colombia, March 11, 2018. PHOTO BY REUTERS/Felipe Caicedo
12/03/2018
BOGOTA (Reuters) - The results of presidential primaries in Colombia may ease market concerns after left-wing candidate Gustavo Petro attracted about 40 percent fewer votes than right-wing coalition candidate Ivan Duque.
Petro's promise of a "social economy" that would raise taxes and shift away from oil, Colombia's top export, toward agriculture has worried investors in the Andean nation as opinion polls showed the former member of the disbanded M-19 guerrilla group and ex-mayor of Bogota running ahead of Duque.
Parties will likely now look to form alliances before the May 27 election to replace President Juan Manuel Santos. If no candidate gets more than 50 percent of the vote, a second round will be held in June.
Sunday's primaries were considered a better test of voter support than often inaccurate opinion polls, although some voters will have participated strategically and may not back either winner in the presidential vote.
More than 6 million votes were cast in the three-way right-wing primary and 3.5 million in the two-way left-wing contest.
While all candidates advocate clamping down on corruption and investment in education and health, the two top pollers differ in their views on a peace deal with Marxist FARC rebels.
Duque, 41, supported by former president Alvaro Uribe and his Democratic Center party, backs foreign investment and an aggressive security strategy meant to combat Colombia's remaining rebel group, which regularly kidnaps and bombs oil pipelines.
He has been vocal in his opposition to the 2016 FARC accord, which could stymie implementation if he wins.
57-year-old Petro's Colombia Humana party pledges to improve conditions for the poor, ban open pit mining and use clean energy.
Voters also elected a new congress. While no party came close to winning control of either legislature, the Democratic Center party came out on top in the Senate, with 19 seats and second in the lower house, with 32 seats.
Petro's Decencia coalition won just 4 Senate seats, and only 2 seats in the lower house.
"There's now sure to be at the presidential level a shake out of candidates over the coming weeks as we approach the first round – Petro can't yet be completely discounted but he looks further from his goal today compared with Friday," said Rupert Stebbings, managing director of equities at Grupo Bancolombia.
The peso strengthened to 0.70 percent against the dollar to 2,848.80 and the yield on local Treasury bonds rose 6.25 percent from Friday's close of 6.27 percent.
"The fact that the center right has won - that doesn't represent a political change for the markets," said Juan David Ballen, head of economic studies at Casa de Bolsa brokerage.
The FARC, now the Revolutionary Alternative Common Force party, were guaranteed five seats in both houses as part of the peace deal and failed to win any others.
Also running for president are Sergio Fajardo, a former mayor of Medellin, and ex-vice president German Vargas Lleras.
They both favor improvements to infrastructure and tax cuts for businesses, though Fajardo is considered left-leaning.
Duque and Vargas Lleras, from the Radical Change party, have strong party machines behind them and can count on backing in Congress if they win.
Other candidates include Liberal party elder statesman Humberto de la Calle, who lead government negotiators at FARC talks, and former defense minister and U.S. ambassador Juan Carlos Pinzon.
(Reporting by Julia Symmes Cobb, additional reporting by Luis Jaime Acosta and Nelson Bocanegra; writing by Helen Murphy; editing by Simon Cameron-Moore and Grant McCool)
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