Columbian voters stunned observers on October 2 by rejecting the peace deal between the government of president Juan Manuel Santos and the guerrilla group Revolutionary Armed Forces of Colombia (FARC), despite a 52-year civil war that has claimed approximately 220,000 lives and displaced several million people.
The deal, which took four years to broker, led to a jubilant celebration on September 26 and a Nobel Peace Prize for Santos. Supporters of the “yes” vote, led by Santos, saw the agreement as a way to end the war, while former Colombian president Álvaro Uribe led the campaign for the “no” vote, protesting not the peace but its price, which included what many considered overly generous terms, such as guaranteed congressional seats, for the guerrillas.
Colombia’s political direction is now in limbo. “The number one problem is the sheer amount of political capital that the government put into this,” says Oliver Wack, associate director for Andean region global risk analysis at Control Risks Group. “The defeat has damaged Santos’ credibility, reputation and ability to govern the country.” The defeat becomes doubly embarrassing when considering factors in Santos’ favor, such as the truncated campaign schedule and government funds promoting the “yes” vote.
Santos may not get a successful deal before the next election in May/June 2018. “[Uribe] wants to draw this out as long as possible and make the ‘no’ campaign and the peace process issue the basis of his presidential bid for 2018,” Wack says.
There’s an economic price to pay, too, not least in the loss of the peace premium. The International Monetary Fund had forecast GDP growth of 2.3% for 2016 and 2.7% 2017, and the Colombian National Planning Department had calculated an additional 1.1% boost from the peace agreement. “That is now not going to happen,” Wack says. “We’ll have a lot of companies that are going to hold back on investments.”