FARC Peace Accords: Back to the drawing board.

There was to be no “Neville Chamberlain moment” for Colombian president Juan Manuel Santos yesterday as his proposed peace process with the FARC guerrilla movement was rejected by voters by a paper-thin majority of 50.2% to 49.8%. No matter how slight, the result is a bitter blow for Mr Santos, who had staked the legacy of his 2 terms in office on a successful peace deal. More broadly, the outcome of the vote is a setback for Colombia, ushering in a new era of political and economic uncertainty which threatens not just Mr Santos’ reputation but the status of the country as one of Latin America’s most exciting developing nations.

Colombia is no stranger to failed peace deals, even in recent times: from 1999-2002, the Pastrana government pursued an active policy of talks with guerrilla and paramilitary groups and the creation of demilitarized zones throughout Colombia. Ironically, this approach resulted in one of the most violent periods in recent Colombian history and gave way to the election of hardliner Álvaro Uribe, the same chap who has just led the “No” campaign to victory.

So why did the Colombian people reject the deal?

Firstly, take geography into consideration. The vote saw a relatively weak turnout of 60%, with greater public participation taking place in Colombia’s towns and cities. The conflict between the government and rebels has been a primarily rural one and urban populations, relatively untouched by conflict, saw less of an immediate need for peace than rural areas that have seen 52 years of on-off fighting, preferring to hold out for the “right” – and potentially more punitive – deal.

The vexed question of getting the “right” deal has been at the heart of the Uribe-led “No” campaign. Mr Uribe has been a consistently fierce critic of the concessions made by the Santos government in the interests of ending the conflict with the FARC, particularly on the thorny moral aspects of the peace. 2 areas have proven especially problematic:

  • Under the terms of the deal, a Peace Tribunal had been proposed to investigate alleged atrocities during the conflict, with the power to hold members of both the FARC and the Colombian Armed Forces to account. In the eyes of Mr Uribe – and as it turns out, many Colombians – this represents an unacceptable equating of the nation’s defence forces and a banned terrorist group.
  • The deal included a proposal to include drug trafficking in list of pardonable “political crimes”, under the rationale that the cultivation and export of drugs – primarily cocaine – provided the FARC with the resources to fight a political conflict: one estimate from 2014 put FARC income from narcotics at over $200 million per year. For voters, this was a clearly a troubling blurring of the lines between a just war and a profoundly illegal trade.

Broader political considerations also swung the vote. The accord guaranteed representatives of the FARC 10 unelected seat in Congress until 2026. While it is one thing to make concessions to rebels in the interests of peace and stability, it is quite another to invite them into the legislature, particularly when the group has suffered a series of setbacks in recent years and occupies a distinctly shaky negotiating position.

The outcome also represents a backlash against Mr Santos’ wider reform agenda. Success in the referendum and public ratification of the peace deal would have given the incumbent president the political capital to push through a series of fiscal and agricultural reforms, including revenue-raising tax hikes, particularly on VAT. Defeat in the referendum will stall these broadly unpopular measures, which had been due to be tabled this month.

This climb-down on tax is likely to set the tone for the next few months, if not the rest of Mr Santos’ term through to 2018. Failure in the referendum is likely to see Mr Santos’ approval ratings take another dip – having been none-too-healthy previously – which, combined with an inability to pass legislation due to a perceived lack of legitimacy and the fact that peace accords will now remain at the top of the legislative “in tray”, paves the way for something of a crisis in Colombian government.

And as ever, the gears of government seizing up spells stagnation in wider society. News that the peace deal had been rejected saw the Colombian stock market take a tumble, a deficit it is unlikely to make up as proposed pro-business market reforms are shelved and uncertainty about the stability of the country rears its head again.

But all is not yet lost. Just as Mr Santos convened a meeting with Mr Uribe and other leading “No” campaigners the day after the result to plan a way forward, so FARC leader Rodrigo “Timochenko” Londoño affirmed his group’s commitment to finding a peaceful solution to the conflict:

“Las FARC-EP mantienen su voluntad de paz y reiteran su disposición de usar solamente la palabra como arma de construcción hacia el futuro.”

Doubtless the FARC – not to mention the other rebel groups not included in this deal – will use this hiatus to bolster their negotiating positions ahead of future talks. But at least – and certainly in contrast to the 1999-2002 peace process – the will to do business is still there.

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