On 26 May, negotiating delegations representing the Colombian government and the left- wing FARC (Fuerzas Armadas Revolucionarias de Colombia) insurgent group reached an agreement on land reform and rural development. According to a joint statement, the deal “will be the start of a radical transformation of rural Colombia”. Among other things, it calls for the creation of a land bank which will redistribute land – including areas captured illegally during the civil conflict – with a focus on reducing rural poverty and inequality. Humberto De la Calle, head of the government delegation, stressed that this redistribution “will be carried out with full respect for private property  and the rule of law and that legal landowners have nothing to fear”. The agreement constitutes the first major breakthrough in the peace talks since they formally commenced in Cuba in November 2012. The parties involved will now move on to discuss the four remaining agenda topics: political participation (talks scheduled as of 11 June), disarmament, illicit drug trafficking and victims' rights.

Impact on country risk

Though all four themes left on the table are complex and potentially divisive, the significance of the accord at hand is not to be underestimated. The land issue and rural policy are considered as the underlying cause of the civil conflict and to some extent the raison d’être of the left-wing FARC. Therefore, the current momentum could well facilitate accelerated progress in the negotiations. Such an evolution would be welcomed by incumbent president Juan Manuel Santos, who had set November 2013 as the deadline for reaching a comprehensive agreement (i.e. well before the upcoming presidential elections in March 2014). But despite the relative optimism about the peace talks, the overall security outlook in Colombia remains unstable. Firstly, there are the non-demobilized sections of the former right-wing paramilitary group AUC (Autodefensas Unidades de Colombia) that continue to pose a threat (kidnapping two Spanish nationals as recent as 17 May). There is also the ELN (Ejército de Liberación Nacional), another left-wing insurgency movement that – despite having signalled a willingness to start up peace talks with the government as well – remains very active mainly in Northeast Colombia (staging a surprise attack on a military battalion and thereby killing ten soldiers on 22 May). Finally, it remains a concern that certain factions of the FARC may choose to remain outside  the eventual peace accord.

Analyst: Sebastian Vanderlinden, s.vanderlinden@credendogroup.com