Economic growth, armed conflict and peace prospects in Colombia: Developing post-conflict

Since the launching in 2012 of the Santos’ government negotiation with the Revolutionary Armed Forces of Columbia (FARC) in Norway and Havana, many analysts believe that the day will come when armed actors in Colombia abandon their frontlines to become democratic actors. The conditions for ending nearly five decades of the oldest armed conflict in the Hemisphere seem to be now more favorable than ever. However, even if peace accords are signed, the country will continue to face major economic and political challenges in the years to come.  How prepared is the country to face the challenges of a post-conflict era? This paper addresses the relationship between armed conflict and economic growth in Colombia, exploring the different post-conflict scenarios and the relevant economic, social, political, and institutional factors that will shape them. The first part of the paper examines the relationship between economic growth and levels of violent contestation in Colombia in the last two decades. It deploys a multi-methods approach, combining quantitative tools and Boolean logic; the analysis is conducted at the departmental level. As the results show, economic growth has played a significant role in the reduction of violence. Economic growth was the mediating variable that facilitated the implementation of Democratic Security, a hard-core military policy responsible for the decline in violent contestation in Colombia after 2003.

The second part of the paper addresses future perspectives in a post-conflict scenario. Colombia was the second country that grew most in the world, after China, in the first half of 2014. But the factors that have driven the Colombian economy—high export commodity prices and revenues from portfolio investments—are weakening. How would these economic perspectives affect a post conflict reality? The paper evaluates the potential impact of key variables such as foreign direct and portfolio investment; risk of Dutch disease; and the effects of an excessive reliance on exports of primary goods (oil and hydrocarbons are analyzed in detail). The third part presents conclusions and policy recommendations from a normative perspective. Failure to attain sustained economic growth in the post-conflict era could result in the exacerbation of inequality, which could conduct to new sources of insurgency and violent contestation.