Engine Bogs Down When Cold - Timing

[zorin]

When the engine temperature has not reached 85 degrees yet, it bogs down around 2000 rpm and the Economy gauge moves up to the middle. It's as if the breaks are applied or the engine is choking. The problem seems to go away when the engine reaches the operating tempurature. The fuel filter is new. last month when I checked the distributor cap and rotor, they looked as shown in attahced pictures. the cap shows sign of arching. I cleaned them and put them back. The engine seems to run fine at operating temperature.

How can I fix the arching issue? Vacuum advance? Is vacuum advance hose supposed to be connected in this engine?
Are the cap and rotor still in working condition or should I replace them?
Would this be the cause of engine bogging down when cold or should I look into some other cause?