What Colombia’s election means for its economy — Quartz

Colombians head to the polls on Sunday June 19 in a run-off presidential election that will mark a new direction for the country, whoever wins.

The race between Gustavo Petro, the left-leaning former mayor of Bogotá and a former guerrilla, and Rodolfo Hernández, a TikTok-savvy construction magnate, is the closest in recent memory, with polls pointing to a virtual tie. Both candidates represent a radical break with the political establishment that has ruled Colombia for decades.

Although Colombia’s economy has rebounded from the pandemic, it remains crippled by a huge informal sector…60% of workers are off the books and some of the highest levels of inequality in the region. Almost half of Colombians see the economy deteriorate, with the share rising to almost 60% among the poorest. Petro and Hernández promise radical changes.

It’s part of a larger movement in the region far from the political center and to the extremes. Here is an overview of the economic agenda of the two candidates:

🛢️ Oil

Petro wants to stop new oil development, Colombia’s number one export product, and phasing out fossil fuels. Hernández, too, wants to switch to clean energy, but wants to keep the oil industry going.

🚢 Trade

Both candidates lean towards protectionist policies. They said they want to review trade agreements and raise tariffs.

🧾 Taxes

Petro wants to increase tax revenue by 5%, in part, by removal of business exemptions (link in Spanish). Hernandez, meanwhile, wants to slash reduce value added tax by almost half and tackle corruption to limit public spending.

🥅 Social Safety Net

Both candidates want to give older Colombians (Spanish) who are not eligible for the pension system a monthly allowance.

Petro proposes to the government to provide a job to the unemployed Colombians who cannot find any. Hernández, meanwhile, wants to boost employment (Spanish) cutting red tape and supporting small businesses and startups.

Polling stations close at 4 p.m. local time on Sunday, with election results expected later that evening. Whoever wins will have to correct divisions between the electorate and Congress to implement change.

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