Event

At the end of June, Colombia’s biggest insurgency group, Fuerzas Armadas Revolucionarias de Colombia or FARC, completed its disarmament process as negotiated in the peace deal of November 2016. As a consequence, this month, Colombian President Juan Manuel Santos signed a third and final decree granting amnesty to another 3,600 members of the FARC rebel group. This decree officially puts an end to more than five decades of conflict.

Impact on country risk

The mass pardon of FARC members (of about 7,000 rebels in total) and the handover of their weapons is cementing the end of the FARC’s insurgency. It is now unlikely that the FARC – although hard-line splinter groups of FARC dissenters exist – will carry out attacks as frequent or intense as seen prior to the unilateral ceasefire in July 2015. This is good news for the economy as attacks on (oil and electricity) infrastructure are decreasing while tourism revenues swell in an improved security situation. Nevertheless, a positive evolution of the relatively low oil prices remains vital to improve the sluggish GDP growth (estimated at 2.3% in 2017) and narrow the moderate current-account and fiscal deficits (respectively projected at -3.7% and -2.8% of GDP in 2017). Moreover, violence is not extinguished as other smaller violent insurgency groups remain active. Colombia’s second-largest rebel group, the National Liberation Army or ELN, didn’t cease its kidnap practice despite formal peace talks. As there is little guarantee that regional ELN commanders will stop the kidnappings – due to the organisation’s loose command structure – a peace deal with ELN is unlikely to be reached in the coming months.

Analyst: Jolyn Debuysscher, j.debuysscher@credendo.com