Emerging Markets / November 29, 2017

Colombia’s Economic Outlook for 2018

This past August marked the beginning of the last year of the Presidency of Juan Manuel Santos in Colombia. Despite the great achievements of this President and Nobel Peace laureate during these last seven years in office, particularly in relation to the Havana Peace Accords with the FARC, these last few months will be crucial to cement his legacy. In the domestic sphere, President Santos must attend to two main issues. He must consolidate the progress being made in relation to the implementation of the Havana Peace Accords and, secondly, he must make sure to boost the national economy.

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Colombia’s Economic Outlook for 2018

Firstly, to ensure that the Havana Peace Accords are not pushed aside in the event that a detractor takes the Presidency, the Santos government should accelerate Congressional approval of their legal framework and begin trials within the framework of the special jurisdiction for peace. Similarly, President Santos must advance the demobilization of ex-combatants and their transition to civilian life during these last months of government so that they are mostly integrated by the beginning of the next presidential term. Likewise, Santos must persecute without respite the few deserters who did not opt for demobilization within the framework of the agreements. In this same sense, the government must continue to address the issue of illicit crops that plague part of the country’s countryside.

Secondly, President Santos must continue to facilitate economic growth through an emphasis on investment in major national infrastructure projects and rural development. These measures will address the urgent need to diversify the national economy, which has become too dependent on its petroleum industry just as international oil prices have been falling. Moreover, sustainable agricultural development is deeply tied to the need to bring prosperity to rural areas, which will better integrate the country and foster sustained growth for years to come. Although some of Santos’ economic policies might not pay off immediately, a policy of productive diversification will be of great benefit to the country in the medium and long term.

Additionally, to ensure the continuity of its agenda and its legacy, Santos and his political allies must form a coalition that ensures a degree of continuity for his policies after the upcoming elections. Even though this might be challenging, a centrist union between the moderates of the left and the right could create a large coalition that will pass onto the second round during next year’s elections.

(Read more about Economics and Agribusiness in Algeria)

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