Neither candidate in the presidential runoff in June wants to talk about hard choices. Everything will be fixed with a large dose of fiscal populism or, alternatively, by a successful businessman’s magic touch.
This is an unusual outcome for Colombia. Neither Petro nor Hernández is supported by the traditional parties that have ruled the country for over two centuries. Both are running on platforms that emphasize change, capturing the enormous discontent that brought people into the streets first in 2019 and then a year ago, in one of Colombia’s most violent protests on record. There are some similarities with the recent presidential election in Chile, which was also a clash of populisms. If the outcome there serves as a guide, the winner will be the candidate able to capture more moderate votes.
The overwhelming support for anti-system candidates is partly the result of the pandemic: The poverty rate rose to 39.3% in 2021, compared to 35.7% in 2019, and the decrease in inequality of the last decade was reversed. Some estimates indicate that students lost an entire year of schooling. In April, inflation climbed to 9.2% and the unemployment rate was above 11%. Ordinary Colombians are dissatisfied, and support for the government stands at just 27%.
But there is a more fundamental cause of unrest. Politics in Colombia is seen as fundamentally corrupt, with a state that has been captured by predators, as Hernández constantly says, or for the benefit of the elites, as Petro claims. Either way, both want to change the system.
Petro has been campaigning to reverse some of the pro-market reforms of the past. He wants to squeeze private pension funds by redirecting contributions to a public fund. The government would use the extra cash to pay for new social benefits, such as a universal basic income and a job program for the unemployed. He also wants to increase revenues by one-third, through a progressive tax reform that would target income, dividends, and wealth. Luis Fernando Medina, one Petro’s main economic advisers, has said that this agenda is not social democratic but socialist. It is not about reconciling the state and the market, but about empowering the state and redefining its role. One example is the health sector, now run by private insurers and providers. Petro wants direct government provision of some health services.
The budget numbers simply do not add up, and markets are naturally worried: Colombia’s ten-year sovereign bonds are selling at 72 cents on the dollar. Petro’s fiscal populism could cost the country dearly in terms of investment, especially in today’s volatile global economy. To calm waters, Petro has announced that he will appoint a respected economist in the finance ministry, following the recent example of President Gabriel Boric in Chile. But the fiscal outlook is very complex: domestic gasoline prices have not increased since last year’s strikes, a decision that will consume 2% of GDP in subsidies this year.
Hernández is a different type of populist. He communicates through short, vague statements. In a post-election interview, he reiterated that his principles are “not stealing, not lying, not betraying, zero impunity […]. We need to remove all those thieves that are getting into the Senate, the Chamber of Representatives, into very important positions in the executive power […] that is the supreme objective and the mandate that Colombians have given me.” He wants to make members of Congress pay for their own vehicles, to transform the presidential palace into a museum, and to cut the number of presidential advisers, embassies, and so on. His trademark is to use ordinary (and often vulgar) language. The fact that he is a successful self-made real-estate developer generates empathy in a country with very low social mobility. The ingeniero, as he likes to be called, is a world apart from the lawyers who have traditionally run Colombia.
His message is simple and effective: Getting rid of corruption will provide the resources to solve ordinary Colombians’ problems. The state is ineffective, and he will make it work.
Hernández is the easy-fixes populist. He does not support prohibiting oil exploration (although he opposes fracking) and says he would lower taxes for businesses and raise tariffs in order to decrease food imports and develop the rural economy. He wants to transform the 19% value-added tax into a 10% consumption tax that “would revive the productive sector.”
That’s about as much detail Hernández has provided on what he would do as president. He has not mentioned a single legislative proposal and says that he will not seek the support of political parties.
So, Colombians must choose between a candidate who proposes radical reforms that emphasize redistribution and new roles for the state, and a candidate who embodies a business-like management style, but has no specific plan.
Despite their very different styles and ideologies, this is not a traditional left-versus-right race. Both candidates say they will implement the peace agreement that ended the decades-long civil war with the FARC guerillas – a divisive issue in the 2018 election. They also say they will negotiate with another guerrilla group, the ELN, and restore relations with Venezuela. Hernández defends the recent establishment of abortion rights and the ban on herbicide use to eradicate illicit crops, distancing himself from the current government’s positions.
The electoral divisions are of a different nature. Petro dominates in the poorer Pacific and Caribbean coasts, as well as in the capital, Bogotá, where he was mayor. He also holds a large majority in Nariño and Putumayo, Colombia’s largest coca-producing regions, probably owing to his longstanding criticism of the war on drugs. Hernández overwhelmingly wins in the more traditional interior of the country, as well as in the main oil-producing regions.
Neither candidate wants to talk about hard choices. In their view of the world, there is no need to reduce the critically high fiscal imbalances, reform pension benefits, or liberalize labor markets. None of that is in the cards. Everything will be fixed with a large dose of fiscal populism or, alternatively, by a successful businessman’s magic touch.