Earlier this month, Colombian voters rejected a referendum on a peace deal with FARC, an armed guerrilla movement that has been at war with the Columbian government for a half-century. Pollsters had expected the peace deal to be approved by a two-to-one margin, and the defeat by a miniscule margin shocked the government of Juan Manuel Santos, who had put his progress with FARC and his reputation at stake by offering a referendum to the voters. While Santos immediately claimed in the aftermath of the result that he would continue to negotiate with FARC to form another deal, negotiation at this point will likely be more difficult, and Santos will be vulnerable to an electoral challenge from conservative former president Alvaro Uribe, who opposes the ongoing negotiations.
The Colombian government’s focus on FARC has likely held back their economy, as the government has exhausted a lot of resources into military and law enforcement that could have been spent elsewhere. FARC is notorious for having redirected lots of Colombian farmland towards the growing of coca for illicit drugs, which has also worked to restrain above-ground economic activity and kept agricultural profits away from the reach of government taxation. A lasting peace with FARC would unburden the government and likely lead to better protection for legitimate farmers amongst other bolsters to economic activity. News of a peace deal would have likely encouraged investment in Colombia, but the present uncertainty – about whether Colombia and FARC will return to war and if Santos’ government will survive – will likely undo that progress.

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    References
  • Miroff, Nick. “Colombians vote against historic peace agreement with FARC rebels.” The Washington Post. 2 Oct, 2016. Web. https://www.washingtonpost.com/world/colombians-vote-on-historic-peace-agreement-with-farc-rebels/2016/10/02/8ef1a2a2-84b4-11e6-b57d-dd49277af02f_story.html