Latin America’s Moment

We are ten days away from Colombia’s momentous October 2 plebiscite on the peace deal. Current polling suggests voters will choose “Sí,” bringing to an end a war that has killed nearly a quarter of a million Colombians and displaced as many as seven million more over the past half century. But although the outlook for approving the deal is good, the battle for the peace will be far longer and more uncertain, requiring a sustained effort for years to come. Five aspects of implementation are particularly thorny, with the fifth—funding the high cost of implementing the deal—undergirding all the rest: First, forgiveness. Acceptance of former members of the Fuerzas Armadas Revolucionárias de Colombia (FARC) as legitimate political actors will be difficult for many Colombians, and suspended prison terms and the guarantees of FARC representation in the lower chamber and Senate stick in many a craw. The crimes committed by the FARC—bombings, kidnappings, conscription of minors as soldiers, disappearances, and drug running chief among them—may have had some justification in the revolutionary mindset of the FARC, but they have left deep and open wounds that will require the government to invest in providing security for its old foes. A determined revenge-seeker could easily destabilize the long-elusive peace. Second, creating and embedding an effective Colombian state. There is no hyperbole in the observation that the Colombian state has been weak and ineffective across large swathes of its territory. Indeed, one of the posited causes of the FARC’s success was precisely that it filled a vacuum in areas of the country that were alternately ignored or abdicated to local strongmen. Reclaiming Colombian territory will require massive investments in the more than a quarter of Colombia’s municipalities (nearly 300 out of 1,100) that were under de facto control by non-state actors. It also requires increasing social spending for the 1 in 3 Colombians who live in rural areas, who have borne the brunt of the fighting and are far poorer and less educated, on average, than their urban peers. Reaching these areas is a peacemaking challenge as well, given the widespread use of landmines by the warring parties: the United States and Norway this week committed to assist with the removal of landmines, contributing funds that will help the Colombians with the estimated $300 million price tag for mine removal. Third, preventing non-state actors from emerging in ungoverned spaces. The bulk of FARC forces will begin demobilizing next week, just ahead of the referendum, and congregating into special concentration zones for six months following. One of the most important challenges will be bringing these former combatants into the legal economy, after years in which many were deeply involved in violent and illegal contraband. The FARC long justified its claims by pointing to the inequality of land distribution, and partly as a consequence, land reform became a key pillar of the peace deal. The UN has committed to helping formalize land titles in rural areas, assisting a new national land agency that will redistribute as much as three million hectares and raise the formal land titling rate from its abysmal current level, estimated at only 52 percent of landholdings. The deal also commits the government to providing subsidies to former combatants for two years, with one-time payments of about $3,500 to those who surrender their weapons, as well as a monthly allowance. But land reform and temporary subsidies alone are a small carrot: other economic alternatives need to be made available to former combatants to prevent them from simply turning to other illicit activities in which their military training would provide them with a comparative advantage. Fourth, and related: reducing the recrudescent drug trade. The Santos government’s suspension of aerial glyphosate spraying of cocaine has not been accompanied by effective manual eradication efforts, and what efforts are being made have been hampered by local resistance. As a consequence, drug production is estimated to have expanded by nearly 40 percent in 2015, nearly double the low recorded in 2012. Whatever one’s perspective on the effectiveness of the drug war, the simple fact is that on the ground, larger crop production means more potential revenues for organized illicit groups, whether these are criminal or political in nature. Already, there are fears that the National Liberation Army (ELN; which has not participated in the peace deal) or criminal groups might take control of the huge portion of the trade—estimated at 60 to 70 percent of total national production—that might be freed up by the FARC’s exit. New criminal groups are reportedly emerging in former FARC territories, and the possibility that several thousand former FARC members could suddenly swell the ranks of the bacrim (bandas criminales, or criminal gangs) bodes poorly. No one is so naïve as to think that the peace will bring a complete end to violence—especially given the large numbers of armed forces operating in Colombia. But it would be a shame if it were to generate destabilizing new criminal organizations or spark a bloody contest for the FARC’s old territories. Fifth, and underlying all the other challenges, paying for peace. The cost of the multipronged effort described above has been estimated at between $31 billion and $90 billion over the next decade. In other words, somewhere between 0.8 and 2.4 percent of GDP each year for the next ten years, in addition to all of the other pressing needs facing Colombia. This is at a time of falling oil revenues, a depreciating peso, a fiscal deficit that is approaching 4 percent of GDP, and a threatened downgrade in the country’s sovereign debt rating. The Santos government’s tax reform proposal—expected to go forward by the end of the year—will be closely watched to see how committed Colombian legislators are to financing the peace. But it will be insufficient on its own, especially because significant amounts of money and willpower for post-conflict reconstruction will be needed quickly. For all of the gains of recent years, the Colombian government is clearly stronger on the military-security front than it has been in post-conflict civilian reconstruction efforts. Already, there is a clear split emerging between urban and rural areas with regard to support for the peace deal, which suggests that urban support for the required post-conflict spending may diminish over time. Adding to the complications will be the upcoming 2018 presidential elections, which could further fracture support, given that the leading candidates will not have many incentives to fully endorse the deal. In Washington, the peace deal is being heralded on both sides of the aisle as a vindication of the huge investment in Plan Colombia. Indeed, the plan invested $10 billion dollars over sixteen years, with clear consequences in terms of degrading the capabilities of the FARC and increasing the effectiveness of the Colombian state, both of which contributed to driving a deal. But while it is welcome, the half billion dollars that the U.S. Congress is moving in rare bipartisan fashion to contribute to the peace effort next year probably represents only around one-twentieth of the annual cost of doing peace right. If past experience is any guide, furthermore, there will be enormous temptations for budget appropriators to move on to other pressing needs as time goes by and the flaws of the peace process become more apparent. Other countries that stand to gain from the peace seem even less willing to contribute. It would be a tragedy if the peace deal were to receive public approval on October 2 only for the peace itself to fail. From a U.S. perspective, a failed peace would endanger a nearly two-decade-long strategic effort. It would undermine a key ally in security matters, which has become especially valued for its role in sharing hard-earned expertise in combating drug trafficking and organized crime with Latin American neighbors. From a Colombian perspective, the peace is potentially one of the most momentous historical breaks since the late 1940s. The FARC appears to be largely a spent force, but the conditions that permitted it to emerge and become a potent problem remain. Difficult though it will be, there may never be a better opportunity for Colombia to create an effective state presence in the countryside or to rein in illicit non-state actors.

After nearly nine months, Brazil’s impeachment drama is over. The process ended on a curiously subdued note: the Senate’s questioning of Dilma Rousseff on Monday was a staid affair, and Tuesday’s speeches were calculatedly calm and measured. By the time the Senate began to vote today, Rousseff’s removal was a foregone conclusion. But the civilized, even boring, proceedings obscured an important objective of this week’s debates: shaping the historical narrative that will guide each side’s supporters over Michel Temer administration’s next twenty-eight months in office. On the Senate floor, Rousseff and her defenders stuck tenaciously and defiantly to script: the fiscal pretext for impeachment was weak and no previous president had been held responsible for the same errors; the economic crisis was not her doing but the result of international circumstances she could not control; and she herself never personally benefitted from the corruption that took place during her presidency. Rousseff was impressive, showing all of the qualities that led President Lula to choose her as his successor: attention to detail, intense message discipline, and an unwillingness to cede any ground. Most important to the Workers’ Party (PT) narrative, she returned over and over to the theme that when they lost at the polls in 2014, “sectors of the economic and political elite” began conspiring against her. By her account, the impeachment battle had its origins in Rousseff’s principled refusal to bargain with the former Chamber of Deputies President Eduardo Cunha, who is deeply enmeshed in his own bribery scandal but has yet to be removed by Congress. Rousseff was supported from the wings by twenty former ministers, her predecessor and mentor Lula, a number of PT bigwigs, and the starpower of crooner Chico Buarque. The opposition, meanwhile, hammered home the depth of the economic, political, and moral crises Brazil faces. They honed in on the narrow text of the impeachment petition—premised on arcane minutia about unauthorized spending and improper loans to the government by state banks—but also sought to show that the transgressions for which she could have been impeached were much broader. They repeatedly reminded Rousseff of the bait-and-switch between the lofty promises made during her 2014 campaign and the austere policies that were actually implemented during her second term, made grand statements about the usurpation of legislative functions by her administration, and noted that almost all of the costs of her fiscal maneuvers were borne by taxpayers. They repeated the now well-trod line that if Rousseff was not complacent with corruption she must be incompetent, and noted that while Rousseff was not personally enriched by corruption, her presidential campaign was financed by ill-gotten means. Most important to their long-time narrative about the legitimacy of impeachment, they noted that all three branches of government were represented at the Senate trial, and that by her very presence, Rousseff was acknowledging the legitimacy of the impeachment process. What sort of golpe is this, they asked, in which the defendant has the right to self-defense? They were supported from the wings by a handful of youthful leaders from the street protest movement. Whatever the arguments, what best explains the impeachment vote is exhaustion. It has been a turbulent three years since the first street protests erupted in July 2013, and many Brazilians simply want the political crisis to go away. In a poll published by Istoé magazine over the weekend, nearly two-thirds of Brazilians said that if they were senators, they would vote to see Rousseff go. That doesn’t mean that Temer is beloved: when asked who should govern Brazil, more than a third (35 percent) of those polled spontaneously responded that they would choose neither Temer nor Dilma. There is also a solid core of opposition, with 30 percent opining against Dilma’s impeachment. But by and large, Dilma had lost much of the public support she had when elected two years ago, and the Petrobras scandal appears to have greatly diminished her mentor Lula, whose ratings continue to decline as police and prosecutors close in on his family’s questionable dealings. What comes next for Brazil? This blog has repeatedly noted the importance of legitimacy to Brazil’s impeachment process. The PT narrative of golpismo by neoliberal forces on the right was artfully deployed by Rousseff and is likely to be a core message of the PT in coming years. This drumbeat will keep Temer and his coalition on the defensive, while turning attention away from the Rousseff administration’s own failures and the PT’s involvement in the corruption scandal. Temer has been playing a complicated game since he became interim president in May. On the one hand, he has been trying to keep the rowdy impeachment coalition in check, promising whatever he could offer to wavering supporters. On the other, he and Finance Minister Henrique Meirelles have been trying to convince investors that the economic team has a coherent plan for recovery that will come together when the political stars align. These dueling priorities were especially evident in the renegotiation of state debts, where investors’ cautious support for an emergency renegotiation lapsed into disappointment as Temer made repeated concessions to state governors in exchange for political support. Temer’s Janus-faced approach may also have reached a natural limit: the PSDB and the DEM parties in late August threatened to withhold support if Temer moved forward on planned wage increases for the judicial branch, which might have earned him short-term political support from some sectors, but would have cascading effects throughout the civil service and a brutal impact on the rapidly deteriorating fiscal results. Now that he is confirmed in the presidency, Temer will be under pressure to commit to the fiscal reforms that were impossible while he was a temporary stand-in. The challenge is significant, in at least three regards. First, the left’s criticism of the new government’s “neoliberalism” will limit what Temer can realistically achieve on the fiscal front. Temer seems to be aiming for a constitutional cap on spending that will promise hard choices about spending in the future while providing his administration some credibility gains in the present. But even this middle of the road solution will be politically difficult, requiring changes to constitutionally guaranteed health and education budgets. The second major reform would be to social security, reducing special privileges for some professions and raising the minimum retirement age, in an effort to cut one of the largest areas of government expenditure and expand on reforms undertaken by Presidents Fernando Henrique Cardoso and Lula. So far, the details of these reform proposals are nebulous, but they are likely to become more concrete by November, and the opposition will pillory Temer for even the slightest proposed change in social spending. The second major challenge is that the timetable for reform is remarkably short. All political oxygen between now and the end of October will be sucked up by the 2016 municipal elections, and then again during much of 2018 by the presidential election. These two contests will be the most wide-open elections of the post-1985 democratic era, in light of new restrictions on corporate contributions, the effects of the corruption scandal, the weakening of the two most important parties in the Brazilian party system (the PT and the PSDB), and the widespread “throw the bums out” sentiment expressed by voters. The field for the presidential race will begin to form by late 2017. As a consequence, the reform calendar is essentially restricted to fourteen months between November 2016 and late 2017. Considering that many less controversial constitutional reforms have taken much longer, and that so many different political actors will be angling for advantage as they look ahead to 2018, Temer will have a tough slog. The third major constraint is the ongoing Lava Jato investigation, and political scandals that keep popping up around it. It is hard to avoid the conclusion that Temer’s coalition is held together at its core by a pragmatic and ideologically malleable center—“Centrão”—that is unsympathetic to the Lava Jato investigation and the increasing power of prosecutors and judges. I wrote recently about recent moves to dilute accountability reforms in Brazil, with support from actors across the political spectrum. These pressures seem likely to build, if only because so many different political forces are under threat. Temer has already been forced by public pressure to dismiss three ministers caught up in various scandals, he himself has been mentioned by witnesses in the Lava Jato investigations, and he is still the subject of an electoral court case investigating the financing of the 2014 Rousseff-Temer ticket. Meanwhile, disgraced former Chamber President Eduardo Cunha has not gone away, and the mid-September vote on his removal will be a bellwether of how well legislators have understood the lessons of voter anger. Concurrently, the progress of a plea bargain by Marcelo Odebrecht, scion of the construction fortune, has already led to allegations of illegal donations to candidates across the political spectrum, from the PT through Temer’s PMDB to the PSDB. It is symptomatic that despite the low-legitimacy moment, Temer has not dared to suggest a political reform that might change some of the perverse incentives that have led to the campaign finance abuses that fueled the Petrobras scandal. There is little prospect that Lava Jato or any of the many other parallel investigations will go away any time soon. The upshot is that the prospects for constitutional reform under Temer are limited. As is so often the case in Brazil, much change will therefore have to be incremental and will take place within the government bureaucracy, rather than through Congress. The shifts underway at Petrobras and the Brazilian Development Bank (BNDES) are good illustrations of where things may be headed, with reprioritization of strategic objectives, asset sales, and general belt-tightening taking place far from the legislative melee. Meanwhile, Temer will be engaged in a mission to build his statesman credentials, including a trip to the G20 meeting in China today, followed by a big speech on Brazil’s independence day, September 7, and then the UN General Assembly. All along the way, expect him to be trailed by challenges to his legitimacy, in the form of celebrity protests, catcalls, and street demonstrations. A new political battle has just begun, to define Brazil’s trajectory after thirteen years of PT rule.

The Colombian peace process began in 2012, and by June 2016, appeared to have reached preliminary agreement on a deal that would result in the cessation of hostilities, ending a war that has killed more than a quarter of a million Colombians. Yet somewhat surprisingly, while the deal was initially celebrated as a milestone, recent polling suggests that a declining share of Colombians would actually support it: 39 percent in August, down from 56 percent in July. The reasons for opposition are multiple, including belief that some abuses by the FARC are too atrocious to merit amnesty, annoyance at the possibility that FARC representatives may be given congressional seats, fear that state capacity to effectively implement the accords is too weak in previously contested regions of the country, opposition to land restitution programs, and resentment at the possibility that government forces may be judged by the same tribunal that judges FARC members. Domestic political considerations also play a role, including the long-standing feud between President Juan Manuel Santos and his conservative predecessor, Álvaro Uribe; and declining support for Santos, which may drag down support for the deal. But surely the Santos government was aware of most of these challenges? And why on earth pledge to have the deal ratified by the public, if doing so would subject it to all sorts of criticism and the possibility of defeat? The answer may lie in the three intertwined strategic explanations: First, academics point to the importance of strategic calculations in ending civil wars: reaching peace depends on what sort of incentives dissident groups have to resort to violence rather than committing to peace. Oftentimes the situation must get so bad that opposing sides have little choice but to reach agreement, painful though that may be. But even once both sides are committed to negotiating, structuring the post-conflict incentives is often a case of the pragmatic and artful bending of each side’s desired outcomes toward a core of commonly acceptable, if seldom entirely desirable, compromises. By all accounts, the FARC’s leadership is near exhaustion, but they had some advantages, including the ability to hold on indefinitely in impenetrable terrain and cause murderous violence at will. The big challenge was to ensure that they saw benefits to negotiating an end to the conflict, which implied government concessions that would bring them to the table. Second, achieving the peace is a game with many players, in which the negotiators may not have unconditional support at home. Even in a two-sided conflict, each side’s negotiators must go home to their constituents and explain the deal, often to second-guessing armchair negotiators who have no reason to reflect on how many late nights and what sorts of complex concessions went into each element of the treaty, and who may be more focused on the war than on the peace (suffice it to note, by way of example, that even as the United States’ Civil War wound down, Abraham Lincoln was unable to push forward his amnesty resolution for the South because of homegrown opposition in the North). Third, the logic behind ending the violence is quite different from the logic of maintaining the peace: there is an inherent tension between the types of commitments that both sides need to make in order to end aggression and the long-term conditions that would maintain the peace. All sides to the conflict need to be able to offer some sort of credible guarantee that they have abjured violence: the winning side has to offer some credible assurance that it won’t simply use the peace to obliterate the losers, while the disadvantaged side needs to offer good reasons why it won’t try to improve its bargaining position through violence once the winning side begins to make concessions for the long-term. In committing to public ratification of any peace deal, the Santos government added a broad range of voters to the mix of implicit parties to the negotiations, in ways that may increase the legitimacy of the peace, enhance the transparency of the process, and lock in the treaty politically. Santos also scored an important victory in the constitutional court’s decision that the plebiscite should face an up or down vote, rather than a messy set of votes on each point of the agreement. Although it adds to the difficulties of the peace agreement, the fact that the deal was always subject to public ratification may also have provided a strategic advantage to Colombian government negotiators. From the negotiating table in Havana, Colombian negotiators could point south at Uribe and other hardliners, warning their FARC counterparts that there were limits to what they plausibly concede. The prospect of democratic ratification, in other words, may have shrunk the possible range of options the Colombian government could agree to, but by narrowing the negotiating space, it may also have made the government’s commitment to its bargaining position more credible. Going forward, the most complex challenge will be to finalize the negotiations with the FARC even as the plebiscite campaign is simultaneously underway. Already “Yes” and “No” supporters are locked in rhetorical battle over how to frame the issues in the public eye. The silver lining is that the need to obtain democratic approval may have enabled the Santos government to obtain a better deal from the FARC than might have otherwise been possible. Whether that deal will prove acceptable to voters, of course, is the big question that will dominate Colombian politics for the remainder of the year.