Political stability generates new optimism in Colombia

Politically, economically and socially, Colombia may be at the most important turning point in its modern history. After 52 years of fighting, the landmark peace deal between the government and the armed militant group FARC, the country’s largest and well known guerrilla group, was concluded in late 2016.

This coincided with the apparent bottoming out of the country’s economic deceleration. GDP growth had been hit hard by falling global oil prices, declining to 2% in 2016, but it is expected to pick up in 2017 and continue accelerating thereafter. This combination of positive events follows a series of important transformations taking place in Colombian society, including a reduction in the overall poverty level and an increasing middle class.

Wealth In The Middle

According to the World Bank’s latest data, in 2014 there were more middle class Colombians than those living in poverty for the first time. Meanwhile, Colombia is well advanced in the accession process to join the OECD. Having been in power since 2010, Juan Manuel Santos, Colombia’s president, is expected to be able to look forward to leaving behind a positive legacy as a result of his two terms in government.

As the country moves forward towards an electoral cycle that will witness a new president to be elected in 2018, the challenge for policymakers will be to maintain and improve the current positive social, political and economic trajectory. The peace agreement requires rigorous implementation and needs to be extended to cover other warring factions. Investment, particularly in the infrastructure sector, will be crucial to both sustaining demand in the short-to-medium term and underpinning productivity growth in the longer term.

A return to robust economic growth coupled with increased security can foster continued improvements in living standards and societal well-being. Meanwhile, the need to address a number of other long-standing challenges like corruption, inequality and rural poverty means the agenda for the new administration is likely to be full, notwithstanding the progress made in recent years.

Electoral Institutions

Colombia’s bicameral congress consists of an upper chamber, made up of 102 senators, and a lower chamber of 166 deputies. Generally, these are directly elected in territorial constituencies for four-year terms, with the elections taking place two months before the presidential elections. In the Senate, there is a single national constituency for the election of 100 seats, with the remaining two being elected from a special constituency reserved for indigenous communities.

In the Chamber of Deputies, five of the members are elected from three special constituencies to represent indigenous communities (one representative), Afro-Colombian communities (two representatives) and Colombian residents abroad (two representatives). From the 2018 elections onwards, the number of representatives of Colombian residents abroad is to be reduced to one, with the other seat to be reserved for the Raisal community of the archipelago of San Andrés, Providencia and the Santa Catalina islands. As a result of the 2015 constitutional reform, the runner-up presidential and vice-presidential candidates will automatically be awarded an extra seat in the Senate.

Peace Agreement

After five decades of conflict and four years of intensive negotiations in Havana, Cuba, the Colombian authorities and FARC announced their agreement to bring their conflict to an end on August 24, 2016. However, the process hit a speed-bump when the deal was narrowly and unexpectedly voted down by citizens in a referendum on October 2, 2016. Taking on board some of the objections raised during the referendum campaign, as well as incorporating greater views at the negotiation table, the government and FARC went back to the drawing board to come up with a new agreement. The revised peace agreement was announced on November 24, 2016, and ratified by the nation’s Congress within a week, on December 1, 2016. Soon afterwards, FARC’s approximately 6000 fighters began to demobilise to designated sites around the country, where disarmament is being verified by UN observers during 2017. For his efforts in securing peace, President Santos was awarded the 2016 Nobel Peace Prize.

Remaining Security Issues

Irrespective of the significant progress made in Colombia’s peace process in late 2016, the security situation was still somewhat fragile as of early 2017. Implementing the peace agreement will prove challenging, given the tight fiscal situation and complicated politics as the 2018 election approaches. Moreover, the National Liberation Army (Ejército de Liberación Nacional, ELN), the second-largest left-wing guerrilla group, was not part of the agreement involving FARC. Nevertheless, in February 2017 the government and ELN began peace talks in neighbouring Ecuador. Given the more dogmatic outlook of the ELN, it is widely perceived that reaching a comprehensive agreement with them will prove more challenging. In addition, any difficulties arising from implementing the agreement with FARC could eventually complicate reaching agreement with other factions.

Violence in Colombia was never limited to left-wing paramilitaries. In March 2017, for example, the NGO Amnesty International flagged an incident in which organised armed groups entered a town in the Department of Chocó, looking for members of the ELN, leading to the displacement of 400 inhabitants.

In the same month, Colombia’s own Constitutional Court denounced the increasing frequency of forced displacement in early 2017. With 6.9m internally displaced persons (IDP) up to 2015 – about one in seven of the population – Colombia tops the world in IDPs. In addition to implementing the FARC peace agreement, the authorities will need to address the many other facets of the country’s security situation if lasting peace is to be achieved.

In the short term, the authorities’ significant challenge is to extend their presence into areas that had previously been under the de facto control of FARC, thereby avoiding the development of a vacuum into which other paramilitary or organised crime organisations could seek to establish themselves. In order to gain a foothold in such formally FARC-controlled areas, the authorities are implementing a large-scale operation known as “Plan Victoria”, involving more than 65,000 troops being deployed to 160 municipalities across Colombia’s territory.

Coca Production

After some years of success in eradicating coca production after the instigation of the US-backed “Plan Colombia” in 1999, it has recently surged again, following the authorities’ 2014 decision to end aerial fumigation efforts due to health risks. According to a US White House report, land under use for coca production increased by 42% in 2015 and a further 18% in 2016 to reach 188,000 ha, the highest level since the late 1990s. As well as the end of fumigation, it has been suggested that the peace agreement itself may have contributed to the increase by incentivising coca production. In fact, under the terms of the agreement, farmers know that they will be able to access subsidies to switch to other crops in the future, thereby encouraging them to engage in coca production before it comes into effect. Reducing coca production will remain a complicated goal, relevant not only to peace efforts and rural development, but also to the challenge in universalising the rule of law across the country as well as relations with the US and other countries.

Political History & Institutions

The paradox of Colombian politics is that despite 52 years of civil conflict and the authorities’ inability to extend the rule of law across the totality of the territory, the country has a history of strong democratic institutions and constitutional stability, with the military playing a relatively peripheral role in civic life.

This contrasts with many countries across Latin America. Colombia is a unitary presidential constitutional republic, in which the president, as both head of state and head of government, exercises significant power vis-à-vis other branches of government. The president, for example, can appoint ministers to cabinet or remove them from their positions. Until a constitutional amendment was introduced in 2005, the president’s four-year term was non-renewable. This change allowed President Álvaro Uribe to seek re-election in 2006. His success in this endeavour extended his presidency from 2002 to 2010 over two terms. President Uribe was succeeded by President Santos, who had served most recently as the former’s Minister of Defence, following the 2010 election. Incidentally, former President Uribe continued to exercise significant political power in Colombia and became one of the most outspoken critics of the peace agreement, campaigning vociferously against it in 2016.

Judicial Powers

Notwithstanding the president’s significant powers, Colombia’s political system is characterised by a strict separation of legal powers between the executive, legislative and judicial branches – with the country’s Constitutional Court being held in particularly high esteem. For example, the Constitutional Court has, on occasion, exercised its power to check the influence of both the executive and legislative branches of government, by effectively striking down measures and actions that it considered to be illegal under the terms of the country’s 1991 constitution.

One important innovation in the judicial branch, in light of the 2016 peace agreement, will be the establishment of the Integral System of Truth, Justice, Reparation and Non-Repetition as a transitional court to prosecute human rights violations and other crimes carried out during the conflict. Approved by congress in March 2017, it consists of a Transitional Justice Tribunal, a Truth Commission and a Missing Persons unit. This provision has proved controversial with the public, mainly because crimes related to drug trafficking, when carried out to finance the FARC insurgency, will fall under the jurisdiction of the new Tribunal.

Peace Terms

Further to the peace agreement signed with FARC in 2016, the creation of a political party depends on them completing the laying down of arms. The party would participate in equal conditions with the other political parties with a guarantee of five deputies and five senators during two electoral terms. If they win sufficient votes to justify proportionally the allocation of further seats, FARC could even secure more representation than the guaranteed minimum. Thereafter, they will have to compete for the electoral vote on the same basis as all other political parties and movements.

Indeed, the provision for guaranteed political representation for members of what was considered by many to be a defeated terrorist organisation proved controversial, and was one of the reasons the 2016 referendum was voted down. Nonetheless, this provision survived in the final agreement that was later passed by congress.

This will not be the first time a rebel group has played a role in Colombian electoral politics. In fact, following a peace treaty with leftist rebels in 1984, the Patriotic Union party was established, which managed at one point to secure nine senators, five deputies, 52 councillors and 23 mayors. At the time, however, members of the Patriotic Union were targeted for extra-judicial killings by right-wing paramilitaries, often suspected to have been acting in collusion with the government of the day.

At a sub-national level, each of the 32 departments elects a governor to exercise executive power in the region, while each of the 1122 municipalities elects a mayor. The last such regional elections took place in October 2015. Although it claims membership across the country, it is expected that FARC’s successor organisation will ultimately exercise its greatest power through local government in the group’s previous stronghold locations.

Power Brokers

Traditionally, the main political parties in congress were the Partido Liberal (PL) and Partido Social Conservador (PSC), often alternating in power. However, in more recent years, the political system has become more fractured with the establishment of the Social Party of National Unity in 2005 to unite most, but not all, congressional supporters of then-President Álvaro Uribe. Colloquially known as the “Party of the U”, it is currently led by incumbent President Santos, and governs in a coalition with the Liberal Party as well as the smaller Radical Change party.

Even though the Party of the U was originally conceived as a vehicle to support President Uribe, he and a number of close supporters had become so disenchanted with the direction President Santos was taking the party by 2012 that they decided to establish a new party, Democratic Centre. One of the major areas of disagreement with President Santos was the decision to engage in peace talks with FARC. Democratic Centre contested the 2014 presidential and parliamentary elections, missing out on the presidency despite winning a plurality in the first round and establishing itself as the main opposition party in the congress.

2018 Elections

Having served two terms, President Santos is constitutionally barred from seeking a third. He will thus step down when his current term ends in August 2018. Parliamentary elections will take place on March 11, 2018, to be followed by the presidential elections on May 27. If necessary, should no candidate achieve a majority in the first round, a run-off election in the presidential contest would take place on June 17, 2018. As part of the 2015 constitutional reform, the possibility of presidential re-election was once again eliminated, meaning that the winning candidate in 2018 will only be permitted to serve a single term in office.

Ultimately, the presidential election is likely to have a crowded field, with candidates of diverse political views. Given the two-round nature of the election, there is scope for parties to band together to form alliances, either before or after the first-round vote on May 27, 2018. This dynamic may, in turn, hinge on the outcome of the parliamentary elections taking place on March 11, 2018.

In October 2016, Jorge Robledo, a social democratic senator, became the first candidate to formally declare for the upcoming presidential election. However, jockeying for position among Colombia’s political class had already been under way for some time. Earlier in 2016, in the middle of the peace negotiations, the Liberal Party broke with Santos’ ruling coalition, partly with an eye on 2018. It is widely anticipated that Germán Vargas Lleras, Santos’ former vice-president, will run to succeed him as president, and as of early 2017 he was still widely considered to be among the favourites. In fact, he stepped down from the vice-presidency in March 2017, to begin campaigning at the head of his Radical Change party. Moreover, Lleras may benefit from the extent to which he has managed to distance himself in the public imagination from what is still a far from universally popular peace agreement.

The peace agreement and subsequent referendum campaign have changed the political dynamic in Colombia, giving momentum to the opposition, notably including Óscar Iván Zuluaga, a presidential candidate defeated in the run-off against Santos in 2014, after having won a plurality in the first round. He had previously been expected to contest again in 2018; however, in March 2017, he announced that he would not seek the presidency, leaving the nomination of his Democratic Centre party open to others, such as Carlos Holmes Trujillo, Zuluaga’s running mate in 2014, and Senator Iván Duque. The Liberal, Conservative and “U” parties, as well as several smaller outfits, are also expected to run candidates in the first round of the presidential election, making for a relatively open field, although the possibility cannot be discounted that two or more of these parties will join forces to back ‘unity’ candidates. Despite making a comeback to electoral politics in 2018, FARC announced in early 2017 that it would sit out the presidential election, preferring to throw its weight behind a candidate intent on implementing the peace agreement.

Tackling Corruption

Despite ranking 90th out of 176 countries in the 2016 corruption perceptions index of Transparency International, Colombia’s score has improved moderately, from 36 in both 2012 and 2013, to 27 in every year since then. However, this is still somewhat below the regional average of 44 for the Americas. Transparency International points to the Panama Papers, which revealed international money laundering schemes, and the breaking of the Odebrecht case, in which the Brazilian engineering firm paid billions in bribes for contracts, as examples of anti-corruption officials doing their jobs and increasingly cooperating across borders. Like many countries around the world, Colombia was caught in the Odebrecht scandal, resulting in President Santos issuing an apology in March 2017 for his 2010 election campaign having received payments from the Brazilian firm. In Colombia it is illegal to receive campaign financing from overseas firms. Nevertheless, President Santos rejected having had any knowledge of the payments until recently and condemned the incident as a “shameful act”. Consequently, such high-profile cases have ensured that corruption is likely to become a central issue in the 2018 election campaigns.

In addition, there is a risk that concerns that corruption in the infrastructure sector could cause private sector financiers to be more reticent about investing funds, or more rigorous in their due diligence, which could hamper the authorities’ ambitious efforts to secure financial closure on major infrastructure projects during 2017. In February 2017, the government announced its decision to terminate an $861m contract that had been awarded to an Odebrecht-led consortium to restore navigability to the Magdalena River, a project that will instead be executed as part of public works. Given the importance of the infrastructure sector to the expected rebound in economic growth in 2017 and 2018, there is a significant risk that growth would fall short of projections, due to any major delays to the 4G road-building programme or other large projects.

International Relations

To date, Colombia is party to 16 regional and international free trade agreements (FTAs) with more than 50 countries, including the US and the EU. In 2014 it signed its first FTA with an Asian country, South Korea, while discussions are currently under way on a possible agreement with Japan. Agreements are also under negotiation with Israel and Turkey.

Colombia is a founding member of – and driving force behind – the Pacific Alliance, established in 2011 together with Chile, Mexico and Peru. In 2013, the OECD opened discussions with the Colombian authorities around the country’s accession to the organisation. President Santos has made OECD membership a priority, with hopes that the accession process can be completed before the end of his second term in August 2018.

While 2016 marked an important turning point for Colombia, the pace at which the economy accelerates and living standards improve over the coming years will be dictated to a large extent by the government’s success in implementing the peace agreement, swiftly establishing the rule of law across the entire territory and executing its ambitious infrastructure programme.

When he leaves office in August 2018, President Santos is likely to leave to his successor a positive legacy, having secured the FARC peace agreement and significantly reducing poverty on his watch. Nonetheless, building sustainable peace and rooting out corruption are structural challenges that are likely to feature in future country elections.