On the rise: Major strides in economic and political progress as security improves

Steady economic progress, coupled with renewed security after a tough fight to increase stability in guerrilla-held rural areas, have renewed confidence in Latin America’s third-largest country. Indeed, it appears as though Colombia’s reputation as a major global narcotics trafficker and home to crime and instability has finally given way to a portrait of dynamic development. Yet challenges remain, chief among them high rates of inequality and poverty that have plagued the country for years.

HISTORICAL BACKGROUND: Though civilisation dates back millennia in Colombia, as with many Latin American nations, the Spanish colonisation in the 16th century marked the beginning of its contemporary development. When the Viceroyalty of New Granada, which combined parts of modern-day Colombia, Ecuador, Panama, Costa Rica and Venezuela, was formed, Santa Fé de Bogotá (now known simply as Bogotá) became one of Spain’s principal capital centres in colonial Latin America, alongside Lima and Mexico City. Following the defeat of Spanish forces by Napoleon, declarations of independence rang throughout Latin America with Gran Colombia declaring its independence in 1810, albeit amidst a fractured, and warring, city-state political system. While provincial quarrels kept Gran Colombia from becoming a unified power, in the meantime a large Spanish force was en route to retake control of colonial territories, which it succeeded in doing by 1816.

After the Spaniards’ return, a true independence struggle began under the guidance of Simón Bolívar and Francisco de Paula Santander in modern-day Venezuela. After sweeping away Spanish forces throughout New Granada, Bolívar and Santander served as president and vice-president, respectively, of the Republic of Gran Colombia from 1819 to 1830. Colombia then became the Republic of New Granada before changing its name to the United States of Colombia in 1863 and finally landing on its current official status as the Republic of Colombia in 1886.

SETTING THE STAGE: Two political parties emerged in the shadows of Bolívar and Santander, aptly named the Colombian Conservative Party (supporters of Bolí- var, centralised government and the Catholic Church) and the Colombian Liberal Party (supporters of Santander and a weak decentralised government, and opposed to the Church and control of civil matters). Military coups and dictatorships, which were commonplace in Latin America, were relatively rare occurrences in Colombia and the first was followed by a return to civilian-controlled government within a single year. However, party conflict and a divided country did eventually erupt in the form of two civil wars, the first of which took place from 1899 to 1902.

Known as the Thousand Days’ War, it resulted in a loss of life estimated to have surpassed 100,000 people. A second civil war was later started with the assassination of Liberal party candidate Jorge Eliécer Gaitán in 1948. La Violencia (The Violence) proved to be more severe and prolonged than the first civil unrest as it resulted in more than a decade of fighting and a loss of life estimated to total approximately 300,000 people, most of who were rural peasants and farmers. La Violencia would have a lasting effect on the societal and political makeup of the country for decades. Eventually smaller communist parties, which were established in the 1930s and 1940s, began to swell as rural support grew, which would later lead to the formation of the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, FARC) and the National Liberation Army (Ejército de Liberación Nacional, ELN) in 1964.

NEW POLITICS: However, also out of civil war grew ambitions for a unified and cohesive government, known as the National Front, whereby conservative and liberal parties would alternate the presidency every four years. This system was maintained until the 1970 election, when popular unrest boiled over after what was widely considered to be the fraudulent election of Conservative Party candidate Misael Pastrana. Out of this emerged the country’s second major guerrilla group, known as the M-19 Movement (1970 elections took place on April 19th).

COUNTER-INSURGENCY: The period 1970-82 saw consecutive administrations fighting on two fronts: the first included counter-insurgency efforts against guerrilla movements such as the FARC, ELN and M-19, the second was implementing significant land and agrarian reform to improve the livelihoods of the poor, neither of which met with much success.

When Conservative Party candidate Belisario Betancur won the elections in 1982, a ceasefire was successfully negotiated between the government and the FARC and M-19, and though the ELN refused to enter into negotiations, their dwindled numbers represented somewhat less of a threat. Yet just as the “war on terror” appeared to be drawing to a close, a new enemy began to emerge on the scene: the highly lucrative cocaine-fuelled narcotics trade.

Powerful cartels emerged from cities such as Medellín and Cali, adopting tactics that saw them respond to any civilian or federal threat with violence and eventually escalating to the assassination of the minister of justice, Rodrigo Lara in 1984. By 1985 the ELN had declared an end to their ceasefire when they stormed the Palace of Justice, holding the Supreme Court hostage, with the resulting firefight ending with dozens of lives lost on both sides.

The following decade was marred by a series of violent acts committed by the drug cartels, guerrilla groups and, at times, the government. However, by the time the 1998 election of Andrés Pastrana took place, the M-19 had long since de-armed and reformed itself as a small political party, and leading drug kingpin Pablo Escobar had been killed. Pastrana’s administration set about combating issues including the trafficking of narcotics, civil unrest and rebellion, social inequality and violence, through Plan Colombia, which was lauded by the international community and attracted $1.3bn in assistance from the US, which also happens to be the primary recipient of Colombian cocaine. Pastrana’s administration offered hope when peace negotiations between the government and the ELN and FARC were under way.

However, by the end of his administration little had been achieved in restoring security. In 2002 Álvaro Uribe, whose father had been killed by guerrillas, swept into power and was sworn in as president. A sterner tack was taken in addressing the security issues plaguing the country as Uribe vowed to crush the FARC and all other armed groups, while simultaneously striving to realise the social and economic goals of the previous administration. To this end, Uribe was successful in beginning to curb the influence of the FARC and other violent groups and opening Colombia up to the global community.

Uribe’s hard-line stance and excessive use of military force polarised opinion inside and outside the country. Constitutional reform driven by Uribe was passed in 2006, allowing him to be re-elected to a second term as president. His successor, the current incumbent President Juan Manuel Santos, enjoyed a private sector career that included stints working as a director at family owned newspaper El Tiempo and then as an executive for the Colombian Coffee Delegation to the International Coffee Association. He also served as minister of finance and public credit from 2000 to 2002.

Santos then founded a political party, known as the Partido Social de Unidad Nacional (Party of the U), specifically to promote Uribe’s “liberal conservative” platform in the run up to the 2006 election. Santos would later go on to serve as minister of defence under Uribe from 2006 to 2009, when he was tasked with implementing much of Uribe’s policy of extinguishing rebel groups, including the controversial military raid into Ecuadorian airspace to kill FARC leader Raúl Reyes, which occurred in 2008.

CRITICISM: As such it is ironic that Santos’ most outspoken opponent is Uribe, who has not taken to quiet retirement as many former presidents with no legal means of re-election have done. Among the criticisms are claims of numerous false corruption charges that have landed Uribe supporters in jail (who Uribe claims to be political prisoners), the administration’s diplomatic connection with Venezuela’s Hugo Chávez, the former and now deceased president (who was accused of funding the FARC) and the most controversial, the recent re-opening of FARC negotiations.

ADMINISTRATIVE POLICY: In reality, current administrative policy since Santos’ election has been much broader, and in many ways in line with Uribe’s overall economic and social goals.

The current administration has actively sought to improve foreign relations and further integrate Colombia within the regional and global economy, while simultaneously tackling issues of social inequality domestically. To this end, Santos has restructured royalties from the extractive industries to begin the process of achieving a more equitable distribution throughout the country (much to the chagrin of oiland coal-producing provinces and departments), while progressive tax reform was also passed, aimed at reducing income gaps between the rich and poor. Another reform included a law that ensures compensation for victims of conflict. Though promised judicial reform has not been fully realised, combating corruption has been a strong focus, with numerous members of the current Congress forced to give up their seats as a result of charges of corruption, criminal action or inappropriate conduct.

In fact, according to the World Economic Forum’s “2012-13 Global Competitiveness Survey”, corruption is the single most problematic factor for doing business in Colombia. Meanwhile, security concerns are now at their lowest ebb in history, and foreign and domestic investment are beginning to have tangible effects on the economy and, almost as importantly, on Colombia’s regional and global reputation.

GLOBAL INTEGRATION: After decades of drug and revolutionary-fuelled violence, Colombia became synonymous with terrorism, kidnapping, narcotics and crime (see analysis). As a result, the country’s brighter qualities – such as the fact that it boasts the thirdlargest population in Latin America and an ambitious and talented workforce – have been largely overlooked. However, with security issues steadily decreasing and macroeconomic figures steadily increasing, Colombia is beginning to be noticed for the right reasons once again. Indeed, partly as a result of its efforts to combat domestic terrorism, it has been granted a seat on the UN Security Council.

Colombia’s improving reputation has also been evident in increased levels of economic and political interest shown by foreign nations and companies. Numerous free trade agreements (FTAs) have been signed by Colombia over the past five years, including agreements with the US, Canada, the EU, Mexico, South Korea and Chile, in addition to the numerous regional trade blocs of which it is a member. Meanwhile, the government recently concluded the negotiation of a trade agreement with neighbouring Panama and is also in the midst of negotiating new FTAs with Japan, Turkey and Israel. Moreover, the treaty with the EU became effective as of August 1, 2013, and a recent agreement with Costa Rica is widely expected to enter into force in the very near future.

REGIONAL INTEGRATION: In 2012 a new trade bloc was launched in South America encompassing Colombia, Chile, Peru and Mexico and dubbed the Pacific Alliance. The foursome was still negotiating tariff arrangements during the first quarter of 2013, with the ultimate goal of reaching zero tariffs on more than 90% of traded goods. With the Southern Common Market (Mercado Común del Sur, Mercosur) – another major trade bloc formed between Brazil, Paraguay, Uruguay, Argentina and Venezuela – focused clearly on cross-Atlantic trade, the Pacific Alliance is set to be primarily oriented westward toward Asia.

The Andean Community of Nations (Comunidad Andina, CAN), another four-member trade bloc composed of Colombia, Peru, Bolivia and Ecuador, is mainly concentrated on promoting regional trade among its members. Finally, there is the Union of South American Nations (Unión de Naciones Suramericanas, UNASUR), whose stated goal is the creation of a single market for all of South America, modelled after the EU. While redundancies are common between them, South America’s various trade blocs point to an increasingly integrated region despite lacking the presence of a single unified commercial agreement. However, although first on the list, economic considerations are not the only topics under consideration. The political system is also receiving much attention.

EXECUTIVE POWERS: The 1991 Colombian Constitution identifies the executive powers of the president as head of state and government. However, the executive branch also extends out to include the vicepresident, the council of ministers, the heads of each of the seven administrative departments, and the heads of state-owned enterprises and regional and local government officials all the way down to municipal levels. All presidential acts must be approved by their respective ministers, except the removal or “shuffling” of the ministerial cabinet. The president is elected by popular vote to a four-year term and following the congressional approval of constitutional reform in 2005 he or she may run for re-election to a second term of office. Though further reform was considered in 2010, which would have allowed for a third presidential term, the legislation failed to pass through Congress. Thus presidents are limited to two terms – even if they are served non-consecutively.

LEGISLATURE: Another element of the political system is the national Congress, a bicameral legislature consisting of a 102-seat Senate and a 166-seat House of Representatives. Of the 102 senators, 100 are elected from a single national ballot, while the remaining two are selected by the country’s indigenous populations. Apart from approving legislation, the Senate’s power is to provide balance against the office of the president and includes approving or rejecting all military rank promotions, authorising declarations of war, electing constitutional court justices and the inspector general, granting presidential leaves of absence and approving or rejecting the resignations of the president and vice-president.

The 166-seats within the House of Representatives are elected via Colombia’s 32 departments or states. Each department is granted two representatives, plus an additional representative for every 250,000 residents. There are four additional special interest groups granted seats within the chamber, designated for the African-Colombian community (two seats), the Indian community (one seat), the Colombian expatriate community (one seat) and the minority community (one seat). The House of Representatives’ powers include approving the national budget and Treasury audit and electing and handing out impeachment indictments where necessary for the president and members of the judiciary.

Legislation may be initiated by the executive branch, legislative branch or judicial branch (though only as pertains to their respective functions), as well as 5% of all permanently registered voters with the signing of a public petition. However, once initiated all legislation must be approved by both the House of Representatives and Senate before passing into law.

PARTY LINES: The 2010 elections marked a significant change in the Senate, with the recently formed Party of the U winning 28 (25.8%) seats, and though it represented no numerical gain on the 2006 elections overall, it was a large enough share to outstrip the country’s traditional Conservative Party (22 seats, 21.2%) and Liberal Party (17 seats, 16.3%).

In addition, several other relatively newly formed political parties won smaller shares as follows: National Integration Party (9 seats, 8.4%), Radical Change (8 seats, 8.2%) and Alternative Democratic Pole (8 seats, 7.8%). Radical Change, which allied with the Party of the U and the Conservative Party, actually lost significantly on its 2006 winnings when it took 18 seats. Within the House of Representatives, the Party of the U and the Conservative Party again claimed the top two spots, winning 47 seats (25.9%) and 38 seats (21.4%), respectively.

The Liberal Party wasn’t far behind with 37 seats (19.3%) followed by Radical Change (15 seats, 7.7%), the National Integration Party (12 seats, 7.4%) and the Alternative Democratic Pole (4 seats, 5.9%). With the Party of the U now firmly established as the largest body, particularly after converting members of the Liberal Party and Radical Change, and with a broad coalition often found within Congress supporting consecutive administrations, tackling security issues and implementing reform has been a relatively straightforward task even if some issues – such as judicial reform – continue to be unresolved.

JUSTICE SYSTEM: In June 2012 proposed judicial reform failed to pass after Santos elected not to ratify what turned out to be a highly controversial bill that also led to the resignation of the now former minister of justice, Juan Carlos Esguerra. While the reform was primarily designed to modernise and streamline the judicial system by eliminating ineffective judicial bodies, a number of last-minute caveats and other controversial items – such as the return to military tribunals for human rights violations committed by members of the military – transformed the bill into a divisive and highly contentious piece of legislation.

According to the “2012-13 Global Competitiveness Report”, judicial independence in Colombia ranks 96th out of 144 nations. Given some of the issues it faces – such as organised crime (140th), the business cost of terrorism (144th) and the diversion of public funds (130th) – increasing efficiency and transparency is a key hurdle in seeing continued development. At the top of the judicial branch lies the Supreme Court, which consists of 23 judges chosen by Congress to eight-year terms (previously proposed reform would have lengthened terms to 12 years). The court is divided into three chambers with seven judges forming the civil-agrarian chamber, seven on the labour chamber, and nine making up the penal chamber. Beneath the Supreme Court are superior courts composed of three judges appointed by the Supreme Court. Superior courts are the highest courts in any given district, overseeing the lesser regional and administrative courts. The Constitutional Court interprets and monitors constitutional law.

OUTLOOK: With tax, fiscal and royalty reform already passed, in addition to reform promising compensation to victims of conflict, Santos has accomplished a reasonable amount during his first three years in office, despite failing to pass broad-ranging judicial reform. However, going forward it will be the outcome of negotiations with the FARC and other security threats that could ultimately determine his fate in the upcoming 2014 elections. With Uribe assumed to be already scouring the country for a possible opposition candidate, it could shape up to be an interesting battle for conservative support, potentially opening up the door to a Liberal Party candidate.