MCarvalhoEcon 12 March 2018 Economic desknote www.GlobalMarkets.bnpparibas.com Colombia: Centre-right puts up its Duques The centre-right congressional election victory reduces risk ahead of the presidential vote.Having won the centre-right presidential primary, Ivn Duque looks like the favourite.A potential left-wing president would lack solid support in Congress.The next Colombian legislature will retain the right-of-centre parties current dominance (see Chart 1 for the key Senate results). The result of Sundays congressional election suggests reduced political risks arising from Mays presidential vote, although a left-wing interventionist candidate does appear to be gaining traction (for more on polls and policy proposals, see our Colombia: Election Tracker, dated 5 March). The big news came from the two presidential primaries also held on Sunday. On the right, Ivn Duque amassed 4 million votes more than any candidate got in the first round of the 2014 presidential election (see Chart 2) and with almost twice as many people voting as in the left-of- centre primary. Mr Duque also won the support of second-placed Marta Ramirez (about 1.5 million votes) and looks to be the favourite ahead of the first round on 27 May. On the left, Gustavo Petro far exceeded pundits expectations. He was able to attract 2.8 votes in his coalitions primary, which, if repeated in the first round of the presidential vote, would be a record high for any left-wing candidate in Colombias electoral history. Mr Petros campaign has gained momentum and could yet gather more in forthcoming opinion polls. Congress composition Mr Duques Centro Democrtico became the Senates largest party and stayed second in the House of Representatives. While short of projections, its results point to a well-organised campaign, thanks to links with the popular former president, lvaro Uribe, and a solid core base. The standout of the legislative election was Cambio Radical, which supports Germn Vargas Lleras. The party became the second force in the Senate, almost doubling its seats. This could revive Mr Llerass fortunes, after a downward turn in opinion polls. Left-of-centre parties gained seats, especially in the Senate, but remain in a narrow minority. The centrist Greens made the biggest gain of five seats, while Mr Petros Decency List was able to grab four seats. However, even if including the five seats guaranteed for the far-left FARC party as part of the peace agreement, the left has less than a 20% of share of the seats. Two heavyweights of local politics, the ruling National Unity and the centre-right Conservatives, suffered significant losses in Sundays vote, but still hold about 15% of seats each in Congress, thanks to strong regional powerbases. Presidential candidates will be vying for their support. National Unity tends to gravitate towards Mr Vargas Lleras and Humberto De la Calle, while the Conservatives look likely to split their support between Mr Duque and Mr Vargas Lleras. Author: Luiz Eduardo Peixoto Latam Economic Research Banco BNP Paribas Brasil SA Chart 1: Senate composition Chart 2: 2018 primaries vs 2014 first round (million votes) Source: Registraduria, BNP Paribas. Changes compare to the previous composition. Source: Registraduria, BNP Paribas. Number refer to the 2014 presidential vote. Right-of-centre forces dominant in Congress Duque one step closer to the second round Participation in Petros primary beat projections Left-of-centre parties have less than 20% of seats Two market-friendly forces to lead in Senate MCarvalhoEcon 12 March 2018 Economic desknote www.GlobalMarkets.bnpparibas.com The presidential race: what now? Having embarked on an upward trend, the challenge for Mr Duque is to go beyond the support of the one-fifth of voters who closely follow Mr Uribes political movement and to gain support from broader sections of society. Mr Duque, a young, charismatic figure, comes from a more moderate faction within Centro Democrtico. His success hinges on reducing resistance from centre-leaning voters while at the same time not alienating the weighty right-wing core constituency. Another market-friendly candidate, Mr Vargas Lleras, also stands a chance of making it to the second round. His party, Cambio Radical, won seats and has a strong regional presence. This could give him the advantage in terms of machinery. However, his numbers have been sliding in polls and he shares with Mr Petro the highest rejection rate among the main candidates. Sergio Fajardo, last years rising star, now seems more of a falling meteor. His numbers in polls have been hurt by Mr Petros rise, according to political pundits. He has appeared unable to consolidate support anywhere along the political spectrum: left-leaning voters seem to have been flocking to Mr Petros more radical agenda, while centrists worry about his alliance with the leftist Polo. He should remain a big p