Colombia’s Peace Dividend – Without the Peace 5

Colombia’s historic deal to end a five-decade conflict could create a new economic powerhouse in Latin America. Just don’t expect peace, writes Jack Nott-Bower.

IN COLOMBIA, the nation is counting down the days to March 23.

The deadline set by President Juan Manuel Santos for a peace deal with the Revolutionary Armed Forces of Colombia, or FARC, would mark the end of a conflict that since 1958 has claimed 220,000 lives – at least 176,000 of them non-combatant civilians.

The process has been continually stalled on both sides. FARC leader Timoleón Jiménez, alias Timochenko, has frequently complained of incomplete clauses and bureaucratic delays by the government.

The government has accused the FARC of blatantly violating ground rules. Leaked footage in February showed the FARC’s top negotiators conducting armed visits to rebel camps, prompting the government to suspend permits for such missions.

With such lack of progress by way of mutual trust, the final element for discussion will be the trickiest: rebel disarmament. Both sides will continue to scramble for concessions for as long as they dare, pushing out to a new deadline, most likely in the second half of this year. Even then, Santos has promised a public referendum on the final deal.

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If an agreement is finally reached, the dividend for Colombia’s economy could be immense. Among the key focal points in the negotiations – including political participation, controlling drug trafficking, victims’ rights and peace implementation – it’s land reform that’s the most significant economically.

The deal’s much-anticipated rural development scheme will open up rich farmlands and secure access to previously untapped natural resource bases, creating jobs and business opportunities. Santos projects the deal will add an annualized 1.5% to Colombia’s $683 billion economy, the fourth largest in Latin America.

After a slowing of growth in 2015 amid the global fall in commodity prices and rising US interest rates, a peace deal coupled with the President’s continued focus on investor-friendly tax initiatives and reduced trade barriers should cause international confidence to soar.

Juan Manuel Santos
Juan Manuel Santos
Colombia Timoleón Jiménez (Timochenko)
Timoleón Jiménez (Timochenko)










Coca Treasure

For many Colombians, however, peace will prove elusive. In the immediate aftermath of a deal, violence is destined to spike.

FARC commanders – leading one of the world’s wealthiest guerrilla armies, which long ago disowned its Marxist roots – will struggle to channel the reward of land restitution to its 8,000 fighters, many of them operating in isolated rural areas. The FARC still controls up to 70% of Colombia’s illicit coca production – a treasure chest waiting to be exploited by rival networks. There are also illegal extraction sites for gold and emeralds to be redistributed.

Some of the hundreds of dissident sub-factions will re-militarize in new criminal structures. Others will be swallowed by the FARC’s rival, the National Liberation Army (ELN).

Although the ELN has been in exploratory talks with the government since mid 2014, sporadic bombings on oil infrastructure and attacks on officials have strangled efforts to reach a formal process.

The People’s Liberation Army (EPL), Colombia’s long-demobilised third insurgent group, could also try to reel in FARC remnants in an effort to reinforce its capabilities.

Nodes of collusion with local political institutions will heat up the tension.
The spotlight will initially be on the embattled, mineral-rich states of Antioquia, Chocó and Bolívar.


Administrative divisions of Colombia

The Santos administration will be mindful of the lessons from 2006, when the state-led demobilization of the United Self-Defence Forces of Colombia (AUC), a violent right-wing narco-paramilitary group, gave rise to a new generation of competing drug-trafficking syndicates.

These groups – referred to by the government as BACRIM (an acronym drawn from the Spanish for ‘new criminal gangs’) – continue to top security concerns, having made startling territorial gains last year. Concern about a lack of shielding from the BACRIM in the event of a peace deal is part of the reason why the FARC’s elites are so reluctant to give up their weapons.

Among the most powerful of the BACRIM emanating from the AUC is Los Urabeños.
Its leader, Dario Antonio Usaga – alias Otoniel – remains Colombia’s most wanted criminal.

Otoniel secures safe passage by generating support from local communities and protection from law enforcement agencies, particularly in the Urabá subregion near the border with Panama. His dealings are visible through generous allocations of territory to marginalised neighbourhoods and selective alliances with the Northwestern 58th Front of the FARC.

Otoniel’s elusiveness has been a source of frustration, bordering desperation, for the government. Late last year, the armed forces started bombing Urabeños camps – an unprecedented move. Police Chief Rodolfo Palomino warned in January there would be further targeted attacks against the encampments.

The strategy could stir controversy. Any legal parameters for bombing narco-paramilitaries have yet to be channelled through the Constitutional Court. Given the risk of civilian casualties, aerial bombing had previously only been used against politically motivated guerrilla organisations like the FARC.


Pablo Escobar

Santos is feeling the pressure to dismantle the BACRIM networks not least because of their threat to commercial mineral extraction in strategic areas.

In October, an Urabeños unit caused the temporary shutdown of three mines in the northern Segovia gold belt owned by the Canadian multinational Gran Colombia Gold, reportedly assassinating an employee amid the company’s refusal to meet its extortion demands.

Urabeños isn’t the only BACRIM. Libertadores del Vichada and Meta Bloc also emanate from the AUC.

Another, Oficina de Envigado, is linked to the remnants of Pablo Escobar’s network. The group was flagged in February by the US Drug Enforcement Administration for allegedly collaborating with Lebanon’s Hezbollah in large-scale money laundering operations.

The backup Santos can command from top military intelligence to respond to these new alliances has been reduced. A rising number of Colombian Special Forces operatives are reportedly leaving the country for the United Arab Emirates, lured by healthy salaries for aiding the UAE’s war effort in Yemen under private contract.

The President will be grateful for the new $450 million aid package announced by US President Barack Obama in February. He’s going to need every cent.


Securing Legacy

Support within Santos’s ruling coalition has also looked shaky. Influential senators in the Liberal Party opposed the government’s surprise policy announcement in January that it would move forward with privatizing one of Colombia’s biggest energy producers – Isagen. Any resulting increase in energy prices or employee lay-offs would undermine the coalition’s principles, they warned.

Should the Liberal Party decide to abandon Santos, it would ignite a political crisis, as the President would effectively lose his majority in both the lower and upper houses.

Meanwhile Álvaro Uribe, President from 2000 to 2010, seeks to trip up Santos at every opportunity, with the FARC peace talks being the most contentious issue.

Santos’s second term ends in 2018. Whatever the challenges, he seems determined to secure his legacy as the Colombian President who finally struck peace with the FARC.

Cityscape of Medellin, Colombia taken at dusk
Cityscape of Medellin, Colombia taken at dusk


Key Points to Watch:

  • Criminal activity is dispersing and diversifying, presenting renewed security challenges for the foreseeable future. Nevertheless, this should not obscure Colombia’s investment promise as the country realizes its natural resource potential.
  • Santos will continue with his investor-friendly agenda, which will be critical for economic recovery after meagre growth in 2015. This, however, could cause political instability as some new measures will estrange liberal factions of his political network.
  • The case surrounding the energy trust, Fidupetrol, is shaping up as the worst corruption scandal in the history of the Constitutional Court, unearthing a political undertone that threatens to interfere with the autonomy of investigatory proceedings. Magistrate Jorge Pretelt, a former President of the Court, who is supported by Uribe, is accused of soliciting bribes from Fidupetrol in return for attempts to push an October 2014 ruling that could have prevented the company from paying a $9 million fine to the government. In the fallout, expect major steps to reassert anti-corruption procedures.


The author is Jack Nott-Bower, Latin America Analyst at West Sands Advisory Limited. A Spanish speaker, Jack has lived in Mexico and traveled through the Americas. His analysis focuses on political, criminal and governance dynamics throughout the region.

West Sands Advisory Limited is a business intelligence, investigations and political advisory firm that has, since 2006, helped clients identify opportunities and reduce risk in emerging and frontier markets

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