Colombia’s Runoff: De La Espriella and Cepeda Set Markets in Motion
Colombia’s Presidential Runoff and Market Reactions
By Nelson Bocanegra, Julia Symmes Cobb and Luis Jaime Acosta
The Candidates and First Round Results
BOGOTA, June 1 (Reuters) - Right-wing Colombian lawyer Abelardo De La Espriella and leftist senator Ivan Cepeda will head to a June presidential runoff after Sunday's tight vote, in a contest so far dominated by voter concerns over security and the economy, to which each candidate has offered populist solutions.
The two men were close in vote tallies in the first round of the contest, with De La Espriella, who has never held elected office, notching nearly 44% support and Cepeda, a long-time senator and activist, just under 41%. The 670,000 vote difference suggests a tough second round for Cepeda, particularly after the third-place finisher endorsed De La Espriella.
De La Espriella’s Platform and Market Impact
De La Espriella's personal style and policy proposals - including tough rhetoric against illegal armed groups and the promise to build 10 megaprisons - have drawn comparisons to El Salvador's Nayib Bukele.
“I am ready to fight the final battle. I am ready for a second round in which this miraculous homeland and its supporters will prevail," he said Sunday evening from a stage set up on a large boat on the Magdalena River in Barranquilla, where he maintains a residence.
Immediate Market Response
Markets reacted positively to De La Espriella's performance, with the Colombian peso rising 3.5% to 3,559 to the U.S. dollar on Monday, its largest daily rise in four years.
The country's stock market gained 5.5%, while shares of state-run oil company Ecopetrol rose 10% in trading in New York. International bonds for 2042 rose 3 cents.
"This is going to end up being positive for the market. One could expect some appreciation in public debt, an exchange rate that might appreciate, and of course, there could also be some value in the stock market," said David Cubides, chief economist at Banco de Occidente.
De La Espriella’s Background and Policy Proposals
The 47-year-old De La Espriella, his wife and four young children also have homes in Miami and Italy.
He has warned that Cepeda would ensure the continuation of President Gustavo Petro’s economic policies, including a ban on new oil projects, much criticized by establishment politicians and investors. The lawyer has pledged poverty reduction through better education, healthcare and housing for the poorest.
Economic Outlook and Challenges
A De La Espriella presidency would lead to more pro-business policymaking, tighter fiscal policy and improved relations with the U.S., Capital Economics said in a note. However, the scale of Colombia’s fiscal problems and the highly fragmented congress - where only five lawmakers belong directly to De La Espriella's movement - will make it difficult to enact the scale of austerity needed to stop public debt-to-GDP from rising, the firm wrote.
Capital Economics added that it retains a "degree of skepticism" about stabilization under De La Espriella.
De La Espriella says he is free from political baggage and has financed his own campaign, without receiving donations from parties or large companies. Reuters could not independently verify that claim.
Leftist Faces Uphill Battle
LEFTIST FACES UPHILL BATTLE
Cepeda’s Position and Support
Cepeda, a 63-year-old lawmaker and son of a murdered communist leader, led some opinion polls ahead of the first round, but surveys have suggested he will face a much tougher contest now that right-leaning voters no longer have multiple options.
Paloma Valencia, a senator backed by former President Alvaro Uribe, had until recently been the leading right-wing candidate in the race, but she notched under 7% of votes. She has thrown her support behind De La Espriella, as has Uribe. Centrist candidates notched single-digit support.
Allegations and Political Tensions
Both Cepeda and Petro said on Sunday night there were possible irregularities in the vote, but in comments to journalists on Monday morning Cepeda backed down from the allegations, saying a review of tallies so far showed no notable problems with the count.
The two candidates inveighed against one another in their comments on Sunday night, with De La Espriella referring to Cepeda as Petro's puppet, while Cepeda called his rival a "mafia fascist" and critiqued his history as a lawyer. De La Espriella has legally represented controversial figures, including former Venezuelan minister Alex Saab, who is currently facing U.S. charges for money laundering.
Cepeda’s Proposals and the Road Ahead
Cepeda, who participated in talks that produced a 2016 peace deal between the government and former FARC guerrillas, has promised to pursue peace with other armed groups to end the country's six-decade internal conflict, an effort that has led to little progress under Petro. He also plans to deepen reforms meant to reduce inequality and poverty, including by raising taxes on high earners, gifting 1 million hectares (2.47 million acres) to conflict victims and expanding income support for the elderly, poor families and young people.
"We will step up all our efforts starting tonight to gather and unite the forces needed to defeat Abelardo De La Espriella with a clear electoral verification," Cepeda told supporters.
Voter Turnout and Next Steps
Low turnout at Sunday's vote may give the candidates room to maneuver if they can convince more supporters to vote in the runoff on June 21. Some 58% of 41 million eligible voters cast ballots, figures from the registry office showed.
(Reporting by Nelson Bocanegra, Julia Symmes Cobb, Luis Jaime Acosta and Rodrigo Campos; Editing by Lincoln Feast and David Gaffen)
