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Greece May Be Cut by S&P

Venezuela Ally Sanchez Ceren Seeks Presidency in Runoff

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March 9 (Bloomberg) -- El Salvadorans voted for a new president in a runoff election today as the nation confronts renewed gang violence and economic growth that trails most of Central America.

Vice President Salvador Sanchez Ceren, a 69-year-old former rebel commander with the Farabundo Marti National Liberation Front, is favored to win the runoff after narrowly missing a first-round victory on Feb. 2. He leads Norman Quijano of the Arena party by a 55 percent to 45 percent margin, according to a Feb. 5-9 CID-Gallup survey of 1,400 voters.

Polls closed at 5 p.m. local (7 p.m. EST) and results are expected today.

Sanchez Ceren is seeking to extend the FMLN’s rule after the party won the presidency for the first time under Mauricio Funes, who isn’t eligible for re-election. While investors have expressed concern about Sanchez Ceren deepening ties with Venezuela’s socialist government, voters are less polarized as social programs initiated by the former rebel group remain popular, said Christine Wade, a political science professor at Washington College in Chestertown, Maryland.

“Sanchez Ceren has done well riding on the coat tails of Funes’s popularity,” Wade, co-author of the book “The Salvadoran Revolution,” said in a phone interview. “The specter of having an FMLN president isn’t what it once was.”

Bond Yields

The yield on El Salvador’s dollar bonds rose the most in emerging markets after Sanchez Ceren led the first-round vote with 49 percent support. The notes have returned 0.5 percent since then, lagging behind the 2.5 percent return for Central American and Caribbean debt, according to JPMorgan Chase & Co. indexes.

The winner of today’s election takes power June 1 with a public debt estimated to reach 65 percent of gross domestic product by 2015, according to a Jan. 29 report by Barclays Plc. The International Monetary Fund projects El Salvador’s economy will grow 1.6 percent this year, compared to the 3.2 percent average for Central America.

The next president will also have to confront a failing 2012 truce with street gangs that have made the country of 6.1 million one of the most violent in the world, according to the United Nations. Funes said last week that his government plans to deploy an additional 5,000 troops to augment 6,500 already on the streets to counter crime.

Quijano, the former mayor of San Salvador, has vowed to scrap the government-backed truce, in which gangs agreed to reduce killings in exchange for better prison conditions for their jailed leaders. Sanchez Ceren has avoided comment, saying in a Jan. 12 presidential debate that he would “promote prevention and education” in the fight against crime, without addressing the truce directly.

To contact the reporter on this story: Eric Sabo in Panama City at esabo1@bloomberg.net

To contact the editors responsible for this story: Philip Sanders at psanders@bloomberg.net; Bill Faries at wfaries@bloomberg.net; Robert Jameson at rjameson@bloomberg.net Pierre Paulden