- The results of Colombia’s regional elections on Sunday showed again that democracy works in the country; negotiations will be key for the Government’s agenda
The results of Colombia’s October 29th regional elections reflected strong support for traditional parties’ candidates, representing not only a strong message for the government but also contrasting with elections four years ago when candidates for "alternative" political forces succeeded.
Our main take is that democracy in Colombia is robust. Yesterday’s vote reflects that people can evaluate mandates and change their political preference if necessary. It showed that checks and balances are still in place. It is also important to highlight that only one major city (Medellín) and one medium city (Bucaramanga) showed a clear shift to the right of the political spectrum. The rest of the political map shows a center-right dominance, which is also a favourable signal since Colombia is not opting for extreme political changes.
President Petro’s speech was impeccable; the President highlighted that democracy is strong in Colombia and that results should be respected. In this line, he congratulated the elected leaders and invited them to work to achieve good projects for the regions. That said, negotiations between the government and traditional political parties should continue, and traditional political parties could have better negotiating power toward modifying reform proposals currently under discussion in congress.
On the economic activity side, the results positively boost business sentiment, which is key to affirming the resilience of Colombia’s economic growth. Up to the Q2-23, investment spending is 20% below pre-presidential election levels, and the prospect of fresh and more orthodox mandates could help resume some private projects that were stopped due to the uncertainty generated after the presidential elections.
The electoral outcome was even better than expected; however, it could have a limited impact on domestic assets in the short run. Throughout 2023, Colombian assets incorporated political risk premiums, and yesterday’s election just confirmed what we repeatedly emphasized: institutions in Colombia are robust, and elections reflect the sentiment of the population. However, in the long run, a better assessment of institutions, checks and balances, and the outlook for a real investment recovery could support a better market environment.
Some key points from the vote:
- Bogota was the biggest surprise since Carlos Fernando Galan was elected with 49.02% (1.48 million votes), well above the second candidate, meaning there won’t be a runoff. In second place was Juan Daniel Oviedo, an independent candidate (20.12% and 608 thousand votes), and, as a surprising outcome, Gustavo Bolivar from the government’s party in third place with 18.7% and 565.7k votes, which is a very low number compared with the 2.3mn votes gained by Petro in the runoff of presidential elections.
- Bolivar said Sunday’s vote was a "Punishment vote" for the government since people felt disappointed with the performance of Petro’s government. In Bogota, metro/rail construction is a key topic of debate since President Petro wants a subway system. The current project is of an elevated rail system. In that regard, Petro has tried to impede the project, even saying that he will call for a plebiscite. However, today’s vote showed that Bogota doesn’t support government proposals.
- Other main cities also saw important support for candidates from traditional political forces. Bogota, Medellín, Barranquilla, and Cali represent more than 55% of Colombia’s GDP and more than 30% of the population.
- In Cali, Alejandro Eder (a businessman supported by traditional parties) won with 40.4% of the vote. In Medellín, Fico Gutierrez (presidential candidate in 2022) won with 73.4%, Barranquilla elected Alejandro Char (also presidential pre-candidate) with 73.23%. As mentioned before, this time, traditional parties gained relevance, which could increase negotiating power when it comes to discussing the government’s agenda reform.
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