By Otaviano Canuto, Samuel George and Cornelius Fleischhaker
Colombia’s inherited reputation for cocaine, drug-trafficking and conflict may not be entirely undeserved. But in recent years, a new reputation has emerged — one of a serious, safer country with dynamic growth opportunities.
Colombia has averaged 4.6 percent annual growth over the last ten years, and it is neck and neck with Peru for Latin America’s fastest growing major economy.
But Colombia’s momentum is about more than just growth. Macroeconomic stability has helped it make inroads against poverty levels, which have halved since year 2000.
Moreover, Colombia has paired the economic momentum with institution building. The country’s democracy has rapidly matured. It is still based on free and fair elections, the results of which have been respected, and there have been successful transfers of power.
Stronger institutions have helped Colombia improve its safety record — homicides, for example, are down 50 percent in the last decade — a critical achievement considering the turmoil of the 1990s and early 2000s.
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Yet, there is no guarantee that this momentum will continue. Any future success would greatly benefit from Colombia successfully implementing a peace agreement with domestic guerillas.
For decades, Colombia has been gashed and divided by a vicious civil conflict that supposedly pitted leftist rebels against the government and right wing paramilitaries, but in the end had poor people fighting poor people.
A lasting peace has been a key goal of President Juan Manuel Santos, who opened negotiations with FARC rebels in Havana, Cuba in 2012. On September 24, 2015, President Santos and leaders of the Fuerzas Armadas Revolucionarias de Colombia(FARC) announced a breakthrough in these negotiations, stating an agreement would be struck in the next six months.
But could a peace agreement negotiated in Cuba actually put an end to five decades of conflict in Colombia?
There is no clear consensus. Ambivalence toward the dialogue is understandable. After all, there are a lot of open wounds in Colombia, and the opposition, led by former President Alvaro Uribe, feels the government has been too accommodating, offering political inclusion and amnesty to hardened terrorists.
Such is Colombia’s fundamental crossroads: peace would be difficult to swallow, but it is a prerequisite for unlocking the country’s potential. And given economic challenges on the horizon, the sooner a peace can be consolidated, the better.
Stay tuned for more Colombia at the Crossroads!
Otaviano Canuto is an Executive Director at the International Monetary Fund. All opinions expressed here are his own and do not represent those of the IMF or of those governments he represents at the IMF Board
Samuel George is the Latin America Project Manager for the Bertelsmann Foundation, author of The Pacific Pumas, and creator of The Crossroads video series.
Cornelius Fleischhaker is a PhD candidate at the Johns Hopkins School of Advanced International Studies. He is co-author of Five Steps to Kickstart Brazil.