LatinFinance - September/October 2016 - 49

Source: Reuters

BRIGHT FUTURE: Foreign direct investment into Colombia could triple, to $36 billion, as a result of the peace deal, says
President Juan Manuel Santos

As shown by the study's results, the
evidence speaks of a significant economic
peace dividend in all the countries studied,
mainly due to increased confidence from
both nationals and the rest of the world.
Internally, the peace dividend translates
into higher investment and household consumption rates, which jointly deliver higher
economic growth. Externally, the effect on
the country's economy is felt through an
increase in foreign investment and in international trade via higher exports. Though
the effect is larger in the first years after the
agreement has been signed, it lasts for at
least 10 years.
When applying these data to the Colombian case, the study by DNP finds that the
country's economic peace dividend will
be considerable: in the wake of the peace
agreement, Colombia's GDP will grow
between 1.1 and 1.9 percentage points more.
From the demand side, the study finds that
the increased confidence translates into a
2.5 point increase in consumption growth,
a 5.5 point increase in the investment rate
as percentage of GDP, a threefold increase

JUAN MANUEL SANTOS, COLOMBIA

"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?"

in foreign direct investment, and a 17.7
point increase in the openness to trade
(exports plus imports as a share of GDP).
From the supply side, results are equally
encouraging: 1.4 points of additional
growth in the agricultural sector, 0.8
points of increased growth in the manufacturing sector, and a 4.4 point increase
in the rate of growth of the construction
sector.
Overall, Colombia's economic outlook,
now that the peace agreement has been
signed, is nothing but reassuring. In the
medium- to long-term, GDP growth might
be close to 6%, GDP per capita may increase from the current $7,000 to about
$12,000, foreign direct investment might
grow from $12 billion to $36 billion, while
exports may reach $65 billion, up from $37
billion today.
In the last decade, Colombia has positioned itself as one of the most dynamic
and resilient economies of the region. In
the next decade, our country is bound to
become an even more vibrant and peaceful world-class economy. LF
September/October 2016 - L ATINFINA NCE.COM 49



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Table of Contents for the Digital Edition of LatinFinance - September/October 2016

Contents
LatinFinance - September/October 2016 - Cover1
LatinFinance - September/October 2016 - Cover2
LatinFinance - September/October 2016 - Contents
LatinFinance - September/October 2016 - 2
LatinFinance - September/October 2016 - 3
LatinFinance - September/October 2016 - 4
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