LatinFinance - September/October 2016 - 48

COLOMBIA
COMMENT

Comment
Juan Manuel Santos
PAGE 48

Fiscal reform
The VAT bet
PAGE 50

Agriculture
Peace and the rural
economy
PAGE 52

Juan Manuel Santos
Peace dividend
An agreement putting an end to decades of war is set to allow Colombia's economy to
flourish, writes the Colombian president
Over the past decade, Colombia has been praised for attaining
high economic growth and major socioeconomic achievements,
while maintaining a stable and sensible macroeconomic framework. Between 2011 and 2015, its average economic growth was
1.3 percentage points higher than the average of Argentina,
Brazil, Chile, Colombia, Mexico, and Peru (LAC-6). Moreover, its
investment-to-GDP ratio peaked at 29.6% in 2015 - the highest
ever recorded in the country's history and also the highest among
LAC-6 countries. Within the same group of countries, Colombia
outpaced the region in terms of reducing poverty and unemployment rates between 2010 and 2015 - by 11.2 and 2.5 percentage
points, respectively.
These impressive achievements speak highly of Colombia's
economic resilience. Prudent macroeconomic management
has allowed the country to withstand international shocks while
delivering favorable economic results. In 2009, one year after the
world's 2008 financial crisis, Colombia's GDP grew 1.7%, the highest rate among its LAC-6 peers. Likewise, when the commodity
super-cycle came to an end for oil in 2014, Colombia's economic
performance remained high despite being a major oil and coal
exporter: among LAC-6 countries, it grew the most that year

48 L ATINFINA NCE.COM - September/October 2016

(4.4%) and posted the second-highest in 2015 (3.1%). Indeed, while
the world economy suffered an economic slowdown in the last
quarter of 2015, Colombia was the 11th fastest growing economy
according to The Economist magazine.
Yet, despite these remarkable results, to date Colombia still
suffers the longest standing conflicts in the hemisphere with the
FARC guerrilla - but not for long. With the aim of putting an end
to a degraded war that has left over 7 million victims, the Colombian government unveiled in late 2012 the formal start of the peace
negotiations with the FARC. Today, the peace terms have been
agreed upon and, once Colombians ratify it on October 2, implementation will begin immediately. If the country's economic and
social development has been so successful to date, what will the
future hold for us once the yoke of this war is permanently lifted?
Most studies on the economic consequences of peace agreements have found that the agreement reached in Colombia will
bring an outstanding economic dividend to our citizens. Take for
example a 2015 research led by the National Planning Department
(DNP), using data from three of the largest data sources on armed
conflicts, and having screened more than 117 countries which
have suffered war.
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Table of Contents for the Digital Edition of LatinFinance - September/October 2016
