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Ivan Duque (left) from the Democratic Center is leading the latest polls, but would have to govern with a congressional minority. Here with former president Alvaro Uribe. (Photo: IvanDuque.com)
Wednesday, March 28, 2018
Perspectives

Colombia Reforms: Unclear Mandate


Lack of clear congressional majorities make significant economic reforms almost impossible.

BY SERGIO GUZMÁN

The inconclusive results of the March 11 congressional elections have produced few clear indicators as to the outcome of the presidential race.

• No candidate is likely to secure an outright victory in the first round of the presidential contest on May 27, with a second round likely.

• The election is likely to be a close contest between opponents and supporters of the implementation of the peace agreement.

• Gustavo Petro of the far-left Decency List remains highly unlikely to secure victory.

• Regardless of their party affiliation, the next president will likely face significant legislative obstructionism, given the divided legislature, and will find it difficult to pursue their political and economic agenda.   

CONGRESS

The results of the congressional elections signal that right-wing parties have a slight advantage. Democratic Center (CD), Radical Change (CR) and the Conservative Party hold a slender majority in the House of Representatives (lower house), with 86 of 171 seats. However, the same coalition was unable to secure a majority in the Senate (upper house), winning 50 of 107 seats. To be able to pass legislation successfully through both houses of Congress, conservative parties will have to take into account the interests of centrist parties such as the National Unity (U) party and the Christian Independent Movement of Absolute Renewal (MIRA) party.

To pass legislation, parties will require strict discipline, a feature hitherto largely absent in the legislature. A key bottleneck for laws will be the reconciliation process – a legislative requirement for both houses of Congress to pass a bill without differences – during which slight changes and amendments can be introduced.

Additionally, the 2018-22 Congress will have the most left-wing representation since the 1990 Congress. As left-wing parties such as the Green Party, the Democratic Alternative Pole, the Decency List and the Common Alternative Revolutionary Force (FARC) will have a minority of seats in Congress, they will be unable to pass any laws or bills of any significance. However, they will likely provide strong opposition to the government, denouncing allegations of corruption, obstructing a possible restructuring of the peace agreement with the FARC, debating the concentration of land ownership, and questioning the economic results of Colombia’s free trade agreements. This will pose a significant obstacle to policymaking for the next president.

This lack of clear majorities signals that securing the passage of significant economic reforms will be almost impossible. These include substantive changes to the fiscal rule (a law that governs the government’s indebtedness capacity and ensures long-term fiscal sustainability), the autonomy of the central bank, tax redistribution and the allocation of fiscal spending.

PRESIDENTIAL RACE

The presidential race is dividing along two broad lines: the status quo coalition and the opposition alternative. The main contenders in the status quo coalition are Sergio Fajardo of the Green party and Humberto de la Calle of the Liberal party, both of whom support the implementation of the peace agreement with the FARC and have a broad anti-corruption platform. However, there are significant policy differences among other players in the coalition on social policy, the economy, international relations and trade. 

Conversely, the opposition alternative is made up of candidates who oppose the peace agreement and its implementation. It is led by Iván Duque of the CD and Germán Vargas Lleras of the CR. Most of its members support foreign investment, free markets and conservative social policies, and strongly oppose the Venezuelan model.

Petro and his Decency List do not fit in either category. Petro’s vehement anti-establishment platform has isolated him from candidates who support the implementation of the peace agreement and largely come from traditional political parties. In his speeches, Petro frequently derides the oligarchy, calls for aggressive economic restructuring and proposes that the country reduces its economic dependence on oil, gas and mining, which currently comprise more than half of Colombia’s exports and contribute significantly to government revenues. Likewise, his tacit support for former Venezuelan president Hugo Chavez (1999-2013) and his 21st-century Socialism model concerns those who favor free market economic solutions.

RUN-OFF LIKELY

Candidates are likely to need between 7.5 million and 8 million votes to win in the first round on May 27 with more than 50 percent of the vote, based on an estimated turnout of between 15 million and 16 million voters. Currently, no major candidate has alliances that would enable them to secure sufficient votes to win outright in the first round. Internal divisions and the results of the congressional elections have made it impossible to form such alliances.

A second round is therefore our most likely scenario, with the top two finishers from the first round vying for the presidency on June 17. Although two right-wing candidates could make it to the second round, it is more likely that the run-off will be contested between candidates from the status quo coalition and the opposition alternative.

In this event, the race would be a close one. The performance of the ruling U party, led by President Juan Manuel Santos, will be key to determining the outcome. According to a survey published on January 17 by consultancy YanHaas, Santos has an approval rating of just 14 percent, with 42 percent of those polled believing the country is going in the wrong direction. However, Santos would be likely to put his weight and that of the critical U party behind a candidate who would protect his legacy – the peace agreement with the FARC. This would give candidates in the status quo coalition a slight advantage going into the run-off election.

NO PETRO PRESIDENCY

Even in the unlikely event that Petro secures passage to the second round, he would not emerge victorious. According to a poll by Yanhaas in March, 35 percent of respondents would never vote for Petro – the highest negative score of any candidate currently in contention. The extremely poor image of neighboring Venezuela and its President Nicolás Maduro among Colombians make a Petro presidency a “nightmare scenario” for many voters. Several political groups have played on popular fears that Colombia would become “the next Venezuela” under Petro, an assertion that has already taken root among the mostly conservative population. A Petro presidency is therefore extremely unlikely.

TRIGGERS TO WATCH

With two months still to go, we have identified several potential developments that could alter the election outcome:

1) An unprecedented increase in turnout could see victory for the opposition coalition in the first round. However, precedent from previous elections suggests that the total number of ballots cast in the first round of presidential elections is usually around 8 percent lower than at congressional elections.

2) A deterioration in social and political conditions in Venezuela, where a presidential election will also take place on 20 May, could reinforce anti-Petro sentiment. A coup, increased social unrest, or a government crackdown on the opposition before or during the elections would be likely to reinforce voter fears that Colombia could head in the same direction.  

3) The emergence of a judicial scandal involving official corruption, voter fraud or tampering. There have already been allegations against conservative senator-elect Aida Merlano regarding alleged vote-buying in Barranquilla. Additionally, the attorney-general has accused Democratic Alternative Pole Senator Jesús Alberto Castilla of ties to the National Liberation Army (ELN) guerrilla group. These would be likely to affect levels of voter support for implicated parties, possibly to the benefit of their opponents.

4) Developments in ongoing peace negotiations with the ELN. The Santos administration on March 14 restarted negotiations with the ELN. Although it is unlikely the negotiations will succeed, announcements detailing progress would be likely to improve the prospects of the status quo coalition. Conversely, a lack of progress in negotiations and/or an attack by rogue ELN factions against infrastructure or state security forces would be likely to strengthen the opposition, which opposes negotiation with the guerrilla group.

5) A diplomatic incident during or after a planned visit by US President Donald Trump to Colombia on April 14. Although Trump’s visit is likely to be tightly planned, his proclivity to go off-script could result in an unlikely but possible endorsement of a candidate or cause. His hardline positions on trade, immigration and the drug war are likely to strike a chord among the Colombian left, who may question the country’s close commercial, military and diplomatic ties to the US.

Sergio Guzmán is the principal Colombia, Bolivia and Suriname analyst for Control Risks.  He provides business, security and political risk analysis for the Andean Region and has particular experience in the Colombian Conflict, International Conflict Resolution and Development. He wrote this analysis for Latinvex.

 

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