Investment into Colombia could slow after its citizens rejected the peace deal signed by President Juan Manuel Santos and the Revolutionary Armed Forces of Colombia (FARC), but experts remain confident that peace will be achieved.
In Sunday’s (October 2) referendum, the ‘no’ vote led by 50.2% to 49.8%, a difference of fewer than 54,000 votes out of almost 13 million. Turnout was less than 38%.
The result came as a surprise to the international community, as the deal struck between the government and rebels would have put an end to over 50 years of armed conflict. But neither Colombians nor foreign professionals with business in Colombia seem to believe that the ‘no’ vote will bring back war.
“’No’ means some specifics points in the initial referendum will be reviewed by government. It means Colombians sent a message to the president that they did not accept the initial terms: because of open wounds they don´t accept political recognition for the FARC, salaries and bonuses, as well as demilitarised zones. With this initiative, the dialogue will start over again but faster than in the first negotiation. It does not mean war again – we all are tired of it,” José Puccini, senior business manager at trade finance software firm BankTrade in Colombia, tells GTR.
He believes the country’s political situation remains stable, and another agreement will be reached. “The government and the FARC guerrilla demonstrated they are willing to talk and negotiate like gentlemen, so all parties involved will be safe, including investors, citizens and economic activities.”
The general consensus is that the political and economic environment will remain stable despite the vote. Richard Abizaid, XL Catlin
From the US, Richard Abizaid, head of the Americas and regional product leader for political risk and trade credit at XL Catlin, shares a similar view, though he foresees a short-term impact on investment.
“There are a number of infrastructure projects [for example, toll roads] that are nearing financial close or will be in the near term and I suspect lenders will want to wait and see how this vote will affect political stability. The general consensus is that the political and economic environment will remain stable despite the vote and that both sides continue to be committed to the peace process,” he explains to GTR.
It is widely believed the impunity clause included in the deal is what caused the rejection, as Colombians want to see FARC guerillas brought to justice for the more than 220,000 lives lost in the conflict.
Both President Santos and FARC leader Rodrigo Londoño or ‘Timochenko’ have made statements to reiterate their commitment to peace following the referendum. “I will not give up, I will keep seeking peace until the last day of my term because that is the way to leave a better nation for our children,” said Santos, while Timochenko vowed to “use only words as a weapon to build toward the future”.
Santos was due to sit down with ‘no’ campaigners on Monday (October 3) and send his chief negotiator back to Cuba (where the deal was negotiated for four years) to restart talks with the FARC.
Despite the reassurance coming from both camps, long delays in getting a deal considered acceptable by the Colombian people could increase political uncertainty. “The longer it takes to renegotiate the terms of the agreement and address the opposition’s concerns or if the new terms are too onerous on the FARC, the higher the chances the FARC will engage in violence again,” warns Abizaid.