Winning the Peace: Paying for Colombia’s Peace Deal

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.