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Colombia’s first leftist president targets inequality and leaves investors nervous

SUPPORTERS of left-wing Colombian presidential candidate Gustavo Petro of the Historic Pact coalition hold the national flag in Bogota, Colombia, May 22. —REUTERS

BOGOTA — The election of Colombia’s first leftist president, Gustavo Petro, is indicative of a widespread desire for a more equal and inclusive society, analysts and business leaders said, but the former guerrilla will have to act quickly to reassure investors.

Mr Petro, a 62-year-old former mayor of the capital Bogota and current senator, won some 50.4% of the vote on Sunday, handily beating construction magnate Rodolfo Hernandez.

The election of a former guerrilla fighter marks a sea change for a country still scarred by decades of conflict and highlights the depth of frustration with the right-wing political establishment accused of policing a wide divide between rich and poor.

Mr Petro has pledged to tackle inequality with free university education, pension reforms and high taxes on unproductive land in the Andean country, where nearly half the population lives in poverty.

His proposals – including a ban on new oil projects for environmental reasons – surprised some investors, although he promised to honor existing contracts. The campaign was Mr Petro’s third presidential bid and his victory adds the Andean nation to a list of Latin American countries that have elected leftists in recent years.

Mr. Petro will take office at a time when Colombia is struggling with low credit ratings, a large trade deficit and a national debt that is expected to end the year at 56.5% of gross domestic product (GDP). Oil accounts for nearly half of exports and nearly 10% of national income.

“Colombia was ruled for so many years by the economic and political elite,” said Gimena Sanchez-Garzoli, Andes director for the Washington Office on Latin America think tank. “In many ways, this election is basically the voice of most people in the country, especially the rural poor, women, Afro-Colombians, indigenous people.”

“People didn’t want change at any cost, they wanted change that would actually be with real proposals that include making the peace deal a priority,” Sanchez-Garzoli said referring to the peace deal. 2016 peace with the Revolutionary Armed Forces of Colombia. (FARC), which ended the group’s role in the nearly 60-year-old internal conflict.

Mr Petro has pledged to fully implement the FARC deal – which critics accuse current President Ivan Duque of not having backed enough – and to seek talks with the still active ELN rebels.

“Petro’s election may have just saved the peace process,” said Oliver Kaplan, associate professor at the University of Denver’s Josef Korbel School of International Studies.

On Sunday evening, as he celebrated his victory, Mr Petro told his supporters: “Peace is that someone like me can be president.

Mr Petro regularly praises the mostly young protesters who have taken to the streets over the past three years to speak out against inequality and police brutality, in protests where more than 40 people have been killed.

The president-elect, who was arrested by the military in 1985 while carrying arms for M-19 rebels, said he was tortured during his 16 months in detention. His victory prompts senior leaders in the armed forces to prepare for change.

“There is a segment of the population that is totally opposed to him because of his U-19 background,” Kaplan said. “Maintaining the security and protection of civilians will depend on good civil-military relations, and this is uncharted territory in this regard.”

But Mr. Petro’s proposals will face challenges, not least because of a deeply divided congress where a dozen parties hold seats.

“Petro is going to have a very strong opposition from day one, we’re going to have a congress that all of a sudden is disjoint from the executive branch,” said Sergio Guzman, founder of Colombia Risk Analysis.

“I think that means people’s priorities have moved beyond the conflict,” Guzman said. “It marks a sea change from where we were as a country.”

Business leaders and the market were awaiting ministerial appointments, particularly for key posts like the finance minister, and predicted volatility in the peso and bonds when markets opened Tuesday after a bank holiday weekend.

“It will be very important that total trust between everyone is restored, that there is trust for businesses, citizens, that there is trust for investors, that there is trust with the rule of law” , said Bruce Mac Master, president of the Colombian Business. (ANDI), said in a statement following Mr. Petro’s victory.

“In us he can expect a constructive partner,” he said.

Mr Petro insisted that business and development had important roles to play under his government. He pledged to strengthen agriculture, tourism and manufacturing.

“We are going to develop capitalism in Colombia,” supporters said on Sunday. Development is necessary to overcome the “feudalism” and “pre-modernity” that Colombia still suffers from, he said. — Reuters