Atlantic Council ADRIENNE ARSHT LATIN AMERICA CENTER

Path to Peace and Prosperity The Colombian Miracle

By Miguel Silva Atlantic Council

ADRIENNE ARSHT The Atlantic Council’s Adrienne Arsht Latin America Center is dedicated to broadening awareness of the LATIN AMERICA CENTER transformational political, economic, and social changes throughout Latin America. It is focused on bringing in new political, corporate, civil society, and academic leaders to change the fundamental nature of discussions on Latin America and to develop new ideas and innovative policy recommendations that highlight the region’s potential as a strategic and economic partner for Europe, the United States, and beyond. The nonpartisan Arsht Center began operations in October 2013.

This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions.

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ISBN: 978-1-61977-975-4 November 2015

Acknowledgements This report was produced with the invaluable help of a number of Atlantic Council colleagues. In the Adrienne Arsht Latin America Center, María Fernanda Pérez Arguello, Program Assistant, has been invaluable in her contributions to launching our Colombia work. She worked tirelessly, along with Andrea Saldarriaga, Project Assistant, to see this report through publication. In the communications department, we would like to thank Nonna Gorilovskaya, our then-Associate Editor, and Romain Warnault, Publications and Graphic Design Coordinator, for their endless flexibility and hard work. Our consultant, Donald Partyka, designed yet another excellent report for the Arsht Center. Peter Schechter Jason Marczak Director Deputy Director Path to Peace and Prosperity The Colombian Miracle

By Miguel Silva Path to Peace and Prosperity: The Colombian Miracle

Table of Contents

1 Introduction

2 Security: Crucial for Colombia’s Transformation The Necessary Consensus

4 Maintaining Consensus: The Economic and Social Revolution Access to Public and Health Care Services Poverty Reduction Increased Investment Infrastructure Bonus

7 Testing the Consensus What Does the Future Look Like? Recommendations

12 Endnotes

14 About the Author

IV ATLANTIC COUNCIL Path to Peace and Prosperity: The Colombian Miracle

Introduction

he Colombia of today would have been nearly impossible to imagine at the turn of the century. But its transformations are real and are a lesson for what is pos- Tsible when consensus is made a national priority.

productNumbers (GDP) only fourfold begin to and tell moved the story. up sevenFrom posi2000- tionsto 2010, on Colombia the International multiplied1 Monetary its gross Fund’s domestic list of countries by GDP size—from thirty-nine to thirty- two. An economy that for most of the twentieth century2 was heavily dependent on coffee exports and a backward import substitution industrializa3- tion model started to open up to the world. In 4 enjoyed a surprising political and economic turn- 2010,around a McKinsey over the past report decade.” concluded, “Colombia has A bigger and growing economy5 is not Colombia’s Welcome to the club? President Juan Manuel Santos only achievement. The majority of Colombians now addresses an OECD Conference in Paris, France. enjoy much improved security. This is a result of rights. Cities also have become internationally

tough security policies aimed at narco-traffickers - announcementand guerrilla groups, that a leadingdeal to endto positive the hemisphere’s movement renowned.gious international Medellín awards and Cartagena, as the world’s known most in the toward peace and the historic September 23, 2015, 1990sinnovative for high crime rates, have received presti Social indicators also began to improve consid- respectively.8 last armed conflict is within reach. city9 and the most attractive for tourism, people left poverty to join the middle class; a erably. From 2010 to 2014, an estimated 2.4 million6 Despite this, Colombia today is at a critical Education is withcrossroads. the country The economic, polarized social,about howand politicalto move decade earlier—from 2002 to 2011—poverty7 rates- successes of the past twenty years are under stress, fell from 50 percent to 34 percent. requires an understanding of the overwhelmingly primaryalso more and accessible. secondary In educationthe past, political are free. connec forward.positive trends Yet, any of analysis the past of two Colombia’s decades. futureFour ques - tionsSocial helped advances determine also characterize who got into Colombian school. Today, society. Those who previously were defenseless metamorphosis? What made this miracle possible? against discrimination today have tools such as the Whattions emerge:challenges Is thedoes “Colombian Colombia facemiracle” to reach a true the

HERVE CORTINAT/OECD/FLICKR HERVE next rung on its socioeconomic ladder? And what an expedited judicial process to protect individual can other countries learn from this turnaround? acción de tutela, a petition procedure that provides

ATLANTIC COUNCIL 1 Path to Peace and Prosperity: The Colombian Miracle

Security: Crucial for Colombia’s Transformation

lthough peace is potentially closer

Fast-forward to the 1980s, the “lost decade” of than ever, Colombia is still home to Latin America, characterized by soaring external the world’s longest armed conflict. Its debt and hyperinflation. Colombia managed its Athe initial catalyst date - tion of Liberalorigins caudillo stretch Jorge to Eliécer the mid-1960s, Gaitán. This but economy reasonably well. Inflation rates teetered s back to the 1948 assassina aroundskyrocketed. 24 percent while those of countries such as Liberal and Conservative party members killed one Argentinawith weak (437 institutions10 percent) as and a result Brazil of (340 the percent)growing unleashedanother in “Laa struggle Violencia”—two for political decades power. inThe which two drug cartels. The Nevertheless, presence and Colombia power ofstruggled cartels - made implausible even the most basic of state func- dency every four years and equally divide all other parties finally agreed in 1958 to alternate the presi nation. tions. Back then, few were betting on the Andean groups—includinggovernmental positions. the Revolutionary However, as was Armed the Forcescase number of right-wing paramilitary organizations inof manyColombia Latin (FARC) American and thecountries, National left-wing Liberation guerilla Army The drug war consumed the country, and a - (ELN) that still exist today—emerged and gained rilla and paramilitary groups weakening the rule strength in the decades after the Cuban Revolution. ofemerged. law and Insecurity committing engulfed countless Colombia, human withrights guer violations and war crimes. 11 unwanted global leadership At positions. the end ofIt hadthe 1990sthe world’sand the higheststart of thenumber 2000s, of Colombiakidnappings held and many occu - pied the number-one position for cocaine exports. 12

Within five years, the13 area of cultivated coca fields inhabitants.grew by 74 percent. Six million In 2002, people it became have been the dis world’s- placedhomicide due capital, to14 violence. with 70 homicides per 100,000 15 beginning—a time when Colombia came together But the past twenty-five years marked a new

aseconomic a nation development. to fight insecurity, tackle considerable social challenges, and pave the way for sustainable The armed forces are widely credited for helping to usher in Colombia’s security transformation. Here, troops are prepared for inspection. US ARMY STAFF SGT SUN L. VEGA/JOINT STAFF/FLICKR

2 ATLANTIC COUNCIL Path to Peace and Prosperity: The Colombian Miracle

The Necessary Consensus he fundamental achievements associated restoring security. The strength of the FARC during with the Uribethe inconclusive (2002–2010), dialogues elected withof the the Andrés mandate Pastrana of Tthe strengthening of democratic institutions through a constituent“Colombian assembly miracle” and are the twofold: restoration - of national security. A broad consensus emerged isedadministration the FARC’s (1998–2002)defeat; they thenhorrified elected Colombian Uribe’s ng cartels on all fronts: voters, who favored the candidate that prom him. toof theface cartels the drug-trafficki was not merely an issue of drug MinisterStrengthening of Defense, the Juanarmed Manuel forces Santos played toa cen succeed- political, legal, legislative, and military. The power tral role in the restoration of security. This was the it was a very real threat to national security that result of strong Colombian public investment and consumption,endangered Colombia’s policing, or future. foreign The affairs. character Rather, and patience of Colombian citizens were put to the test aid package created during President Bill Clinton’s key US support through Plan Colombia, a bipartisan - went to combat the drug trade. Public investments 16 ingduring political this bloody parties struggle, and civil requiring society. The cooperation lesson for andadministration foreign aid throughhelped the which country more build than a $5 larger billion Colombians—andand solidarity across for all other areas countries of public that life, face includ simi- and more professional military.

lar challenges—is that drug trafficking will erode - In the past fifteen years, kidnappings have been institutions that lack clear, cross-sectorial consensus. reducedpercent. by 92 percent, homicides dropped by 45 enterThe the 1991 political Constitution spectrum. ended the two-party politi percent, 17and terrorist attacks decreased by 71 Threecal system, guerrilla opening groups the were space for other parties to From 2002political to 2012, FARCprestige troop withered. numbers demobilized and included in dropped significantly, and their the constituent assembly. At the PEACE TALKS TODAY - Three years ago (November Two years into Santos’ first 2012), the Colombian government term, with security signifi changes addressed the lack of relaunched peace negotiations reopened peace talks with the opennesssame time, of the legal constitutional democratic with the FARC in Havana, Cuba. FARC.cantly Withimproved, the announcement the President institutions. The new constitu- Five topics have been under that a deal on the main sticking tion achieved other important discussion: agrarian reform; politi- point of transitional justice had objectives as well. It gave rights cal participation; drugs; end of conflict (transitional justice); and victims’ rights to truth and repara- been reached, the peace process tions. Both parties have reached toand minorities, strengthened decentralized the judiciary. a preliminary agreement on four now looks likely to finally bring power to the regions and cities, of these points. The historic an end to the armend conflict, September 23 announcement of a withthe growing a March power2016 deadline. of local Agiven powerful, real capacity newly created to confront solution to issues of human rights Constitutional changes, and judicial accountability paves Attorneycrime. General’s office was improvements showed that the way for a final deal in the next democracy, and security Another unifying force six months. This is when Colombia the country was better pre- gave momentum to open- faces the most difficult challenges ing the political system: the yet—peace-making and peace- need to confront the guer- building. Among other things, inpared Colombia’s to fight institutions.lawlessness and agreements at a national level Anotherto restore positive citizen transformaconfidence- should be adjusted to local and was then a real threat to the tion also began to take shape: rillas, whose military power regional needs and circumstances. stability of Colombia. Will the Colombian people sup- impressive improvements in This effort against the FARC port a final agreement when it is social and economic conditions. was led by President Álvaro put before them?

ATLANTIC COUNCIL 3 Path to Peace and Prosperity: The Colombian Miracle

Maintaining Consensus: The Economic and Social Revolution

n a country with profound inequalities - stitutional changes and success in the security realm alone could not provide long-term, con politi- 100)to better helped quality change services. that, with Health mandates insurance that coverage resulted in universal health care coverage, along with access- Itogether disparate public- and private-sector lead- ers didcal notaccord. end Indeed,with constitutional the consensus changes that brought and expanded to more than 90 percent of the popula security. tionones. by Health 2012, bringingindicators increased also improved. financial Life protection expec- A major political and social effort was needed tancyto Colombian increased families, from sixty-eight particularly to toseventy-two the poorest years to extend the social improvements that are criti- cal to today’s Colombian miracle. The country is now a leader in improving access to basic public betweentwenty per 1991 thousand and 2009, live and births. child mortality (under fiveColombia years old) also decreased experienced from thirty-five an18 important deaths to

inand direct health foreign care services, investment. reducing poverty levels, increasing infrastructure investments, and bringing upgrade in public services. From 1993 to 2012, Access to Public and Health Care access to public water systems increased from 78 Services percent to 92 percent, and sewage system access - rose from 61 percent to 85 percent. Electric power lenges in terms of health care services. Less than coverage grew from 75 percent to 94 percent. All of In the early 1990s, the populationColombia faced had health serious insurance chal poorthese urban quality and of liferural improvements areas—a demographic were achieved, of ingreat large concern. part, because of targeted investment in 20 percent of coverage. In 1993, the Law on Social Security (Law Poverty Reduction Efforts to implement policies that address resultedpoverty, in further combined accom withplishments. the determination In the past to improve the nation’s business climate,

milliontwo decades, now among Colombia the hasranks cut of in the half poor. the number The of people living in poverty, with fewer than19 10 unprecedented advances in equity and poverty Colombia Development Plan 2014-2018 has made

reduction.a low point The to average Gini coefficient among its was Latin reduced American from 0.56 to 0.54 (which means Colombia moved from Now, more of a shot at social mobility. A coffee farm PALMER/CIAT/FLICKR NEIL worker in the department of Cauca. neighbors), the poverty rate was reduced by ten

4 percentage points (to 29 percent),ATLANTIC and extreme COUNCIL FIGURE 1. Poverty Levels in Colombia, 2002–2014 (Percentages)

60 % Barranquilla Bogotá Cali Cartagena Medellín

50

40

30

20 Poverty

10

Extreme Poverty 0

’02 ’03 ’04 ’05 ’08 ’09 ’10 ’11 ’12 ’13 ’14

Source: DANE - Encuesta Continua de Hogares (2002-2005) y Gran Encuesta Integrada de Hogares (2008-2014). Publication date: March 24, 2015.

Much of what was achieved is due to the per- sistent work of a generation of economists who poverty fell from 12 percent to 8 percent [see figurepoverty. 1]. NeverThe result before was in thatits modern 2.4 million history people has generation occupied—with few exceptions—two Colombiaemerged from had anpoverty extreme and poverty 1.5 million rate from of just extreme a formulatedessential positions economic for policy ensuring in the compliance 1990s. That with single digit. the goals proposed: the Finance Ministry and the How was20 such a drastic reduction in poverty Department of National Planning. The Central

- also played a critical role; it formulated and main- levels achieved? The answer lies, in part, in the Bank,tained made monetary independent and economic by the policies1991 Constitution, that helped mostlaunch successful of a number conditional of public cash aid programs,transfer program. includ Colombia position itself as one of the most macro- ing Familias en Acción, Colombia’s largest and economic stable nations in the region.

Introduced in 2001, it was helping to support more21 - thanerty resulted2.2 million yet families again from just consensus.eight years Thislater. time movedAccording from ato closed-market Mauricio Cardenas, economy current to a tech- Morearound importantly, the appropriate the immense economic reduction model to in follow: pov Minister of Finance, after 1991, Colombia gradually

nocracy, with greater focus on appointing experts interventionausterity in public in the spending,market. an orthodox handling to its Central Bank. Because of this transition, the of public finances, and relatively little government inflationAmid the rate social decreased revolution significantly, and the22 gettingsuccessful closer Increased Investment to the long-term goal of 3 percent. h - path of opening its economy and starting a restoration of security, Colombia—which in the Tprocessroughout of liberalizingthe 1990s, Colombia and modernizing went down its a 1990s was among the least likely of foreign invest national industry. ment recipients, with investments barely This exceeding is $2 billion—received more than $16 billion23 in

ATLANTIC COUNCIL foreign direct investment (FDI) in 2014. 5 Path to Peace and Prosperity: The Colombian Miracle

most important integration and trade initiative that Colombia is building. The four countries share

Alliancea belief in will the be advantages able to compete of the withmarket the economy, rest of the free trade, and openness to FDI. Soon the Pacific

world,in the four with countries. a marketplace of 215 million people and the free movement of goods, services, and citizens Infrastructure Bonus conomic development has come alongside Ea massive ramping up of infrastructure. The million)—andcountry’s those largest in thecities—Bogotá next tier—Barranquilla (8 million inhabitants), Medellín (2.5 million), and Cali (2.3

(1.3construction million), Cartagena of public and (1 million), private infrastructand Cúcuta (700,000)—continue to benefit from impressive to urban quality of life and commercial activity.ure, Educational access is up, but quality remains a transportation links, and other projects critical 29 concern. Here, students at a rural high school in the later privatization of ports and airports attracted department of Antioquia. The opening of the economy in the 1990s and the past twenty years. Once controlled by political thirteen years. - new and sizable investments—$530 billion in the teenthequivalent on the to alist24 500 of percent FDI recipients increase generated over the bypast the Trade and Development Today, Colombia Conference is ranked of the United eigh patronageto modern andports customs with robust mafias shipping for contraband activity. Thisand Nations. drug-trafficking activities, Colombia is now home 25 upgradehave also is been not limitedmodernized. to just The the result:ports—the increased Bogotá, showAdditionally, that investment in 2014, in data sectors from other ProColombia, than oil and Medellín,national competitiveness Cali, Cartagena, and Barranquillaexport prospects. airports the national export and FDI promotion agency, Colombia The infrastructure focus is staggering. Between 26 mining reached 60 percent of total FDI. - - is becoming increasingly dynamic. In just one and year, 2013 and 2018, the country will have invested investmentfrom 2013 to in 2014, construction investment services in Colombia’s increased 27finan by improvements.between $50 billion Results and $60are alreadybillion in visible: infrastruc the cial services sector increased by 14 percent, tureonce modernization, nine-hour31 road withtrip betweena focus on Bogotá highway and The country28 has pursued an aggressive agenda Medellín now takes only six. 102of bilateral percent. and multilateral free trade agreements More work still needs to be done. Transporting a container from Bogotá to the Caribbean coast costs more than shipping it from Cartagena to a Japanese (FTAs). In the past five years, it has signed FTAs port. with the United States, the European Union, Mexico, thousand-kilometer32 trip to Cartagena will take half Chile, Peru, the European Free Trade Association The hope is that in less than a year, the (Iceland,among others. Norway, Switzerland, and Liechtenstein), behind this success: a sober technocracy and an several Central American nations, and Canada, as much time as it did five years ago. The secret - CHARLOTTE KESL/WORLD BANK/FLICKR KESL/WORLD CHARLOTTE However, the Pacific Alliance (which also orthodox economic policy, joined by a dynamic pri includes Chile, Mexico, and Peru) is perhaps the vate sector and a hardworking, diligent workforce.

6 ATLANTIC COUNCIL Path to Peace and Prosperity: The Colombian Miracle

Testing the Consensus

uch of what Colombia has achieved some oversight agencies are seen as increasingly throughout the past two and a half - decades is due to consensus— zens in democratic institutions. sometimes explicit and other times politicized. This has eroded the confidence of citi Mimplicit—about what had to be done. Here lies the key to what some call the Colombian miracle. beingPerhaps discussed more have importantly, moved away the current from agrarian peace process has entered its final phase. The issues economic pressures are stressing the very con- have done what many thought would be impos- sensusToday, that however, brought major Colombia political, so much social, progress. and sible:reform, resolve victims, issues and ofdrug transitional trafficking. justice. The two The sides Without renewed political agreement regarding the remaining to-do list includes terms for disarma-

polarization and division that would make further country’s direction, Colombia could enter an era of- endorsement.ment, mechanisms to implement and verify the tion. This process has agreement, a date for a final ceasefire, and citizen alreadychange difficultstarted. and slow the country’s transforma

There was con- sensus in the political space. Security was restored and other critical insti- tutional changes were - tutional legitimacy andmade. public However, trust instihave worsened in recent years. Corruption scandals are taint- ing local and regional

government budgets sometimesadministrations, make their way into the hands of a political class inter-

N ERRE JOTA/FLICKR ERRE N ested in deepening Á IV and the judiciary and A new image. Medellín, once known for its crime, is now associated with innovation. traditional patronage,

ATLANTIC COUNCIL 7 Path to Peace and Prosperity: The Colombian Miracle

the government and its allies (the

approval rating for Santos fell to 29 percent in recent months, according would leadto Gallup, to rejection although of theit has agreement recently33 by themoved public back and to thethe defeatlow 40s) of the most comprehensive peace effort in the country’s history.

There was consensus in the economic arena. The handling of

as it allowed for relatively uninter- the economy proved fundamental,

easierrupted with growth an expanding between 1985 pie—which and istoday. no longer Consensus, the case. however, Recent is economic always growth is unlikely to be sustained

particularly oil and coal. due to the low prices of commodities, Next up, the ballot box? Colombians who have marched for peace may soon be able to vote for it. a sizable Oil earnings in 2015 will34 be down- This will probably require legal and consti- by 60 percent from 2013, This has required measureshit, since to oil reduce money public currently spend35 rep- resents 20 percent of government revenue. tutional reforms. But right-wing parties, under government to ram through Congress a hasty tax thatthe leadership has divided of the former country President and undermined Uribe, have reforming. Additionally, package that the dramaticallylooming deficit increased has led taxesthe mounted a fierce opposition to the peace process on entrepreneurs. The result has been a newfound political parties—except Uribe’s—accompanied polarization. The country’s productive elites have Presidentpublic confidence Santos on in thethe planeprocess. to HavanaLeaders for of allthe the lion’s share of the downturn. As the coun- Santos’ approach to peace; he left behind a legacy become irate, believing that they are shouldering ofSeptember military toughness23 announcement. that is counter Uribe opposes to Santos’ will become a critical national discussion. These try moves forward, spreading the tax burden economy—could fuel the growth of populist hard- style. Still, the government has not been able to - financial dislocations—and the fear of a worsening denceneutralize in the Uribe government and his opposition to lead the movement. peace-making So, andalthough peace-building support for has the been process low. is still high, confi leftAnd politicians, there was who social could find consensus. political traction.Social reforms improved livelihoods through modernized S the FARC will not quickly bring peace. The pro- labor laws and eased employment restrictions for É Moreover, signing a peace agreement with the private sector. The social security law found effort. Translating rhetoric into actionable peace willcess notwill be require easy—and a massive it will political be expensive. and financial Citizen of the instruments that sought to reduce poverty support among all political parties, as did most and improve public services. Yet in any economic CORT ALEJANDRO endorsement is not yet clear. An electoral defeat of endorsement will be critical, but the instrument for

8 downturn, the most vulnerable sufferATLANTIC most. COUNCIL All Path to Peace and Prosperity: The Colombian Miracle

social programs are currently under budget stress.

In January 2015, the OECD published a report But, more than any other, it is education that is seriestitled “Colombia, of challenges Policy that Priorities Colombia for must Inclusive take on to expansionbuilding into of access.a major Restructuring political fight. the Major education change completeDevelopment.” the process In it, the of organizationbecoming an outlinedOECD member. a systemis required, will requirewith a focus the courage on quality to unleashrather than a politi just- cal battle at the very moment when Colombian and to mitigating the middle-income trap. polarization is at its highest. It calls for significant improvements to inequality The need for educational reform is inescapable. largest regional inequalities in terms of GDP per Conclusions from the Program for International capitaDespite is found its recent in the economic countryside. growth, At the one same of the Student Assessment (PISA) tests administered country for the past sixty years. To address these very high proportion of young people in school time, Colombia has remained a middle-income lackin the the past basic few skills years needed are quite to functionconcerning, in modern as “a society.” - createproblems, higher-quality a significant jobs effort through is required activities to improve with cational 36coverage with Organization for Economic higherworkforce added training, value andincrease greater productivity, innovation. and Co-operation When and comparing Development the figures(OECD) for countries net edu Another major challenge is increasing the number of workers in the formal labor market. average only in primary schoolin the early coverage. 2000s, And Colombia reached the OECD - Although the figures are PISA results have also Signing a peace agreement mal labor is thought to begun to demonstrate not very reliable, infor huge issues with quality. with the FARC will not quickly - bring peace. The process will ofcomprise total employment. between 59 Highpercent government and 73 percent sixty-thirdIn 2012, of sixty-five for math counskills. require a massive political and charges and wage costs Thetries, OECD Colombia and the ranked World financial effort. make employers think Bank point out that poor twice before hiring a secondary education is translating into tertiary period. A series of disin- challenges. centivesworker for make an indefiniteit unlikely 37 that those in the informal sector will move to the What Does the Future Look Like? formal sector. Resolving these issues and creating a minimum wage differential for younger workers Colombia’s acc Change may be on the horizon, driven by necessary to implementession an agenda to the forOECD, good which gover is- would help in finding a long-term solution. - nance on that track will for strengthen 2016. The Colombian process has institutions made it Challenges extend to other areas as well, including and the38 rule of law. nationalhealth care, government competitiveness, and local infrastructure, authorities. environ ment, business climate, and cooperation between the

ATLANTIC COUNCIL 9 Path to Peace and Prosperity: The Colombian Miracle

Recommendations supporting the country in the model of a Plan olom seen much worse—and has found its way Cto favorablebia faces outcomes. many challenges, The conti butnuation it has of Colombia 2.0, with investments in the countryside’s the Colombian miracle will require refocusing the infrastructure, and other forms of support in the political center around important policies that are 2political,Eliminate legal, andobstacles social spheres.to innovation progress. The requirements of OECD accession can FTAs. This is required to open ,more industrial mar- providedifficult politiciansto implement of the but right critical and for the continued left with production,kets to and Colombian exports, goodsand enacting and services. new some convenient political cover to make the hard choices that will enable change and transformation. In particular, Colombia must lead the Strengthen support for the peace process. marketplace.Pacific Colombia Alliance is alsoto achieve the only its oneshort-term of the 1Although a majority of Colombians supports the goals, so that it can better compete in the global distrust of the negotiations. Once a peace deal is four Pacific Alliance countries that is not yet a part peace process, the opposition has built widespread- of the Trans-Pacific Partnership (TPP), which was- ive political majority. With negotiations ries.finalized The TPPin October provides 2015 a goodand is pretext awaiting for signature Colombia signed, there will be little time to build a support and ratification by the twelve Pacific Rim signato must be priority number one. the agreement’s terms are made public and it is It will benow of primary entering importance their final months, in building this to synchronize its laws with TPP standards, once overall support for the peace process to explain what has been agreed upon and to complete and ratified,Build with a consensus the possibility for political of future reformaccession. to formally sign the peace deal in the next six months. 3 Issues such as the disarmament of the FARC and establishment of the Transitional Justice Tribunal attackthe political judiciary. corruption If the mainstream at the local, politi regional,- will be challenging. Ensuring that former combat- caland parties national are levels, not able and to to push modernize through ants can participate in the formal labor market will also be critical. Although the FARC has said that corruption will be an attractive political rallying new political reforms, the fight against a large-scale effort is needed between the govern- in Colombia’s institutions. mentthis process and the is private not about sector economic so that reintegration,ex-combatants pointColombia for politicians. is at a critical It is, today,crossroads. the weakest Continued point who are not part of FARC political activities or - guilty of war crimes can enter the formal work- revenuereforms atcould the helpinstitutional it achieve level, an income political per consen capita to a life of violence. similarsus and to citizen that of support, Spain. But and the less perpetuation dependence ofon oil force.The Left United outside States formality, and its Western they will allies likely should return political division is a threat. Colombia could lose its way and succumb to faulty economic policies. It is the time for Colombia to double-down on its miracle. not back out now, or leave this in the hands of the Colombians. Instead, they should continue

10 ATLANTIC COUNCIL

Path to Peace and Prosperity: The Colombian Miracle

Endnotes

default.aspx. 1 ANDI—National Business Association of Colombia, “A Guide to Investing, 2013,” http://www.andi.com.co/es/GAI/GuiInv/Paginas/

Colombia: A Country Study 2 Knoema, “World GDP Ranking, 2015,” 2015, http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts. 3 Dennis M. Hanratty and Sandra W. Meditz, eds., , Washington, GPO for the Library of Congress, 1988, http:// Political Institutions and Policy Outcomes in Colombia: The Effects of the 1991 countrystudies.us/colombia/61.htm. Constitution 4 Mauricio Cárdenas, Roberto Junguito, and Mónica Pachón, , in Ernesto Stein and Mariano Tommasi, eds., “Policymaking in Latin America: How Politics Shape Policies,” Inter- American Development Bank, 2008. 5 McKinsey and Co., “Colombia’s Lesson in Economic Development,” July 2010, http://www.mckinsey.com/insights/economic_studies/ colombias_lesson_in_economic_development. 6 Juan Manuel Santos, Press Office of the President, Republic of Colombia, “Informe al Congreso,” 2014, http://wsp.presidencia.gov.co/ Publicaciones/Documents/InformePresidente2014.pdf. 7 Isabelle Joumard and Juliana Londoño Vélez, “Income inequality and Poverty in Colombia—Part 1. The Role of the Labour Market,” OECD, March 27, 2013, http://www.oecd-ilibrary.org/economics/ Huffington Post income-inequality-and-poverty-in-colombia-part-1-the-role-of-the-labour-market_5k487n74s1f1-en. 8 Carolina Moreno, “Medellin, Colombia Named ‘Innovative City of the Year’ in WSJ and Citi Global Competition,” , March 2, 2013, http://www.huffingtonpost.com/2013/03/02/medellin-named-innovative-city-of-the-year_n_2794425.html. 9 Portafolio.co, “NatGeo Traveler, Forbes, Recommend Visiting Colombia,” December 3, 2014, http://www.portafolio.co/economia/ colombia-favorita-destino-turistico-2015. El Espectador 10 Henry Ma, “Inflation, Uncertainty, and Growth in Colombia,” International Monetary Fund Working Paper, November 1988. 11 , “Bacrim, responsables de la mayorí�a de violaciones de DD.HH. en Colombia,” March 26, 2014, http://www.elespectador. USA Today com/noticias/judicial/bacrim-responsables-de-mayoria-de-violaciones-de-ddhh-c-articulo-483096. 12 Aamer Madhani, “Colombia No Longer Top Cocaine Producer,” , July 30, 2012, http://content.usatoday.com/communities/ The Economist theoval/post/2012/07/white-house-colombia-is-no-longer-top-cocaine-producer/1#.VjJ57berSM8. 13 “Why Is Less Cocaine Coming from Colombia?” , April 2, 2013, http://www.economist.com/blogs/economist- explains/2013/04/economist-explains-why-colombia-produces-less-cocaine. 14 Edward Fox, “Colombia Yearly Homicide Rate Sees 7% Drop,” In Sight Crime, http://www.insightcrime.org/news-briefs/ colombia-yearly-homicide-rate-sees-7-drop. 15 United Nations High Commission for Refugees, “2015 UNHCR Country Operations Profile- Colombia,” http://www.unhcr.org/ pages/49e492ad6.html. us-policy-in-colombia. 16 Amnesty International, “US Policy in Colombia,” http://www.amnestyusa.org/our-work/countries/americas/colombia/

Journal of 17 State Department, “Building on Progress by Plan Colombia,” March 21, 2011, http://www.state.gov/p/wha/rls/fs/2011/158620.htm. Economic Perspectives 18 Santiago Levy and Norbert Schady, “Latin America’s Social Policy Challenge: Education, Social Insurance, Redistribution,” , Spring 2013, https://www.aeaweb.org/articles.php?doi=10.1257/jep.27.2.193. 19 National Planning Department, “Bases plan nacional de desarrollo, 2014–2018,” https://colaboracion.dnp.gov.co/CDT/Prensa/ Bases%20Plan%20Nacional%20de%20Desarrollo%202014-2018.pdf. 20 Ibid. 21 Diego Andres and Mora Garcia, “Strategies for Reducing Poverty and Extreme Poverty in Latin America: Can Integration Social Protection Programs Follow the Successful Path Cash Transfer Programs Have Done?,” Erasmus University Institute of Social Studies, Political Institutions and Policy Outcomes in Colombia: The Effects of the 1991 2010, thesis.eur.nl/pub/8742/Mora%20Garcia.pdf. Constitution 22 Mauricio Cárdenas, Roberto Junguito, and Mónica Pachón, Colombia Today , op. cit. 23 “Colombia: Latin America’s Hot Spot for Global Investment,” , June 8, 2015, http://www.colombiaemb.org/sites/default/ Colombia Reports files/Colombia%20Today%20HTML%20(Investment)%20FINAL%2006-08-15.pdf. 24 Adriaan Alsema, “Colombia FDI Statistics,” , June 20, 2012, http://colombiareports.com/colombia-fdi-statistics/. 25 “Colombia Is Now One of the Top 20 Countries Receiving the Highest Investments: UNCTAD,” ProColombia, http://www. investincolombia.com.co/news/657-colombia-is-now-one-of-the-top-20-countries-receiving-the-highest-investments-unctad.html.

12 ATLANTIC COUNCIL Path to Peace and Prosperity: The Colombian Miracle

26 “Reporte trimestral de inversion extranjera directa en Colombia a 2014,” ProColombia, January 2015, http://www.slideshare.net/ pasante/reporte-de-inversin-a-2014-a-ii. 27 Ibid. 28 Ibid. 29 Secretaria Distrital Planeacion Bogota, “Population Clock,” http://www.sdp.gov.co/ portal/page/portal/PortalSDP/ InformacionTomaDecisiones/Estadisticas/RelojDePoblacion. 30 Government of Colombia, “Colombia: Gobierno invierte $213 mil millones en la recuperación de la infraestructura afectada por el invierno,” March 31, 2011, ReliefWeb, http://reliefweb.int/report/colombia/ colombia-gobierno-invierte-213-mil-millones-en-la-recuperación-de-la-infraestructura. 31 Ibid. 32 Natalie Cosoy, “Por qué es tres veces más barato mandar un contenedor de Colombia a China que dentro de Colombia,” BBC World, May 20, 2015, http://www.bbc.com/mundo/noticias/2015/05/150425_colombia_economia_transporte_problemas_nc. 33 BluRadio.com, “Imagen favorable de Santos cayó del 43 % al 29 %, según Gallup,” April 29, 2015, http://www.bluradio.com/97836/ imagen-favorable-de-santos-cayo-del-43-al-29-segun-gallup.34 Ramos López y Starobinsky, 2010. 34 Helen Murphy, “Colombia sees drastic fall in oil revenue this year,” in Reuters. March 18, 2015. http://www.reuters.com/ article/2015/03/18/colombia-economy-oil-idUSL2N0WK0ZI20150318. 35 Ibid. colombia-more-success-in-higher-education-more-opportunities-for-youth. 36 World Bank, OECD, “Tertiary Education in Colombia, 2012,” http://www.worldbank.org/en/news/feature/2013/01/24/

37 Ibid. 38 Organization for Economic Cooperation and Development (OECD), “Colombia: Policy Priorities for Inclusive Development,” Better Policies Series, January 2015. http://www.oecd.org/about/publishing/colombia-policy-priorities-for-inclusive-development.pdf.

ATLANTIC COUNCIL 13 Path to Peace and Prosperity: The Colombian Miracle

About the Author

Miguel Silva, the Adrienne Arsht Latin America Center’s Nonresident Senior

PresidentColombia Fellow,Gaviria isbecame a Colombian the Secretary journalist, General lawyer, of theand Organization political consultant. of American He served as Chief of Staff to President Cesar Gaviria, and continued in that role when-

SeniorStates. ManagingSilva is the Director Founder for of FTIGalileo Consulting. 6, a strategic communications firm special izing in crisis management and political communications. Until recently, he was a

14 ATLANTIC COUNCIL

Atlantic Council Board of Directors

CHAIRMAN James E. Cartwright Henry A. Kissinger Robert J. Stevens *Jon M. Huntsman, Jr. John E. Chapoton Franklin D. Kramer John S. Tanner CHAIRMAN, Ahmed Charai Philip Lader *Ellen O. Tauscher INTERNATIONAL Sandra Charles *Richard L. Lawson Karen Tramontano ADVISORY BOARD Melanie Chen *Jan M. Lodal Clyde C. Tuggle Brent Scowcroft George Chopivsky Jane Holl Lute Paul Twomey PRESIDENT AND CEO Wesley K. Clark William J. Lynn Melanne Verveer *Frederick Kempe David W. Craig Izzat Majeed Enzo Viscusi *Ralph D. Crosby, Jr. Wendy W. Makins Charles F. Wald EXECUTIVE VICE Nelson Cunningham Mian M. Mansha Jay Walker CHAIRS Ivo H. Daalder Gerardo Mato Michael F. Walsh *Adrienne Arsht *Paula J. Dobriansky William E. Mayer Mark R. Warner *Stephen J. Hadley Christopher J. Dodd Allan McArtor David A. Wilson VICE CHAIRS Conrado Dornier Eric D.K. Melby Maciej Witucki *Robert J. Abernethy Thomas J. Edelman Franklin C. Miller Neal S. Wolin *Richard Edelman Thomas J. Egan, Jr. James N. Miller Mary C. Yates *C. Boyden Gray *Stuart E. Eizenstat *Judith A. Miller Dov S. Zakheim *George Lund Thomas R. Eldridge *Alexander V. Mirtchev HONORARY *Virginia A. Mulberger Julie Finley Karl Moor DIRECTORS *W. DeVier Pierson Lawrence P. Fisher, II Obie L. Moore David C. Acheson *John Studzinski Alan H. Fleischmann Michael Morell Madeleine K. Albright TREASURER *Ronald M. Freeman Georgette Mosbacher James A. Baker, III *Brian C. McK. Hender- Laurie Fulton Courtney Steve C. Nicandros Harold Brown son Geduldig Thomas R. Nides Frank C. Carlucci, III SECRETARY *Robert S. Gelbard Franco Nuschese Robert M. Gates Thomas Glocer *Walter B. Slocombe Joseph S. Nye Michael G. Mullen *Sherri W. Goodman Sean O’Keefe Leon E. Panetta DIRECTORS Mikael Hagström Hilda Ochoa-Brillem- William J. Perry Stephane Abrial Ian Hague bourg Colin L. Powell Odeh Aburdene John D. Harris, II Ahmet Oren Condoleezza Rice Peter Ackerman Frank Haun *Ana Palacio Edward L. Rowny Timothy D. Adams Michael V. Hayden Carlos Pascual George P. Shultz John Allen Annette Heuser Thomas R. Pickering John W. Warner Michael Andersson *Karl Hopkins Daniel B. Poneman William H. Webster Michael Ansari Robert Hormats Daniel M. Price Richard L. Armitage Miroslav Hornak Arnold L. Punaro David D. Aufhauser *Mary L. Howell *Kirk A. Radke *Executive Committee Elizabeth F. Bagley Wolfgang Ischinger Robert Rangel Members Peter Bass Reuben Jeffery, III Charles O. Rossotti *Rafic Bizri *James L. Jones, Jr. Stanley O. Roth *Thomas L. Blair George A. Joulwan Robert Rowland List as of October 28, 2015 Francis Bouchard Lawrence S. Kanarek Harry Sachinis Myron Brilliant Stephen R. Kappes John P. Schmitz Esther Brimmer Maria Pica Karp Brent Scowcroft *R. Nicholas Burns Francis J. Kelly, Jr. Alan J. Spence William J. Burns Sean Kevelighan James Stavridis *Richard R. Burt Zalmay M. Khalilzad Richard J.A. Steele Michael Calvey Robert M. Kimmitt *Paula Stern

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