Three years after the beginning of peace talks, the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) are edging closer to an agreement.
Coverage of the talks has focused on various aspects of the conflict — its long-running nature (fifty-one or nearly seventy years, depending on how one defines it), the Colombian public’s pessimism on the FARC upholding its end of the bargain, and perhaps most optimistically, the marvelous business prospects that will emerge in the wake of an agreement.
Colombian sources and foreign journalists alike suggest that foreign investment and foreign tourists will pour into the country soon after any deal is inked.
The notion that the Colombian economy will take off with a peace deal is partly underwritten by the assumption that the conflict has retarded growth. This assumption requires qualification.
While the ongoing conflict has unquestionably made some parts of the country inaccessible to extractive exploitation and has proved a nuisance to certain industries (e.g. in the form of the FARC’s habitual sabotage of oil pipelines or the kidnapping of oil contractors), other industries have likely benefited. For example, Colombia’s rapidly growing palm oil industry — which produces the palm oil found in more than half the products in western supermarket shelves — has profited from mass displacement of peasants.
With over six million internally-displaced people, Colombia is second only to Syria, and areas of intensive palm oil production correspond to the highest areas of rural displacement. Other land-intensive industries such as soy, sugar cane, rubber, and cattle ranching, have, like palm oil, benefited from hostilities in a similar way through displacement and concentration of land ownership.
Colombian ruling classes have, with considerable help from local mass media, also used the conflict to stifle dissent. Critics of the current neoliberal, extractive model of accumulation are tarred with the brush of sympathy for — or even collusion with — guerrilla “terrorist” groups.
The notion that some sectors of the Colombian economy have benefited from conflict should not, however, distract from the fact that the current Colombian government — along with most of the country’s economic conglomerates and many international organizations such as the World Bank, the IMF and the OECD — believes that a peace deal will spur economic growth. What is more, this belief is probably right, at least in the short term.
While the conflict has benefited large-scale agro-industrial corporations and also supplied a steady stream of cheap migrant labor to cities, substantially increasing international investment requires the signing of a peace treaty. Increased international investment is in turn essential if Colombia is to continue expanding its extractive industries, which are at the heart of its current economic model.
Through the 1980s, Colombia’s legal export industry was dominated by coffee. Since then minerals, especially fossil fuels, have moved to the forefront of economic and political agendas. In 2013, oil (55.7 percent) and coal (11.4 percent) accounted for over two-thirds of the country’s total exports. Oil alone represents 21 percent of government revenue, and while it is only exported in small quantities to neighboring Venezuela, natural gas is widely viewed as a large potential growth sector.
Even so, the overall prognosis for Colombia’s fossil-fuel industries is precarious.
Colombia became a net oil exporter in 1969, its total production rising over the following decades to a peak of around 800,000 barrels a day in 1999. But over the next five years production declined to a mere 550,000 barrels per day, due in large part to the declining yields of existing fields and the lack of new exploration, itself partly due to the conflict with guerrilla groups.
The government of Álvaro Uribe responded by liberalizing the industry, selling off a stake in the public oil company, Ecopetrol, offering highly favorable terms to foreign investors (allowing some to keep 100 percent of their production) and creating the Law of Judicial Stability for Investors in Colombia which guaranteed such terms could not be amended by future governments.
These favorable conditions, combined with an influx of highly-skilled engineers and managers from Venezuela, enabled Colombia to expand its base of production and increase its petroleum yield: this year, production is expected to peak at an average 1.2 million barrels per day. In the coming years, however, production will decline; according to the National Agency of Hydrocarbons (ANH), at current output levels Colombia’s oil reserves will be depleted within six years, while gas reserves will last until 2030.
Hence, the government finds itself in much the same position it did at the end of the 1990s. It must attract additional foreign investment by offering even more favorable terms, including reducing Ecopetrol’s stake in joint projects with foreign companies, cutting “red tape” in the process of environmental certification, and classifying offshore hydrocarbon operations as free trade zones with minimal social investment and hiring requirements.
A peace deal would boost the confidence of potential international investors, reduce the incidence of sabotage to pipelines and other infrastructure, and enable drilling and further exploration in currently risky areas such as the state of Putumayo in the western Amazon.
But while the immediate effects of a peace deal and further liberalization may enable growth in the Colombian oil sector, the long-term prospects for the industry, and indeed the Colombian economy as a whole, must be seriously questioned. Put simply, the neoliberal extractive accumulation model — completely ignored in the peace process — will exacerbate many of the fundamental issues that have fueled the Colombian conflict in the first place.
Despite the current relative weakness of the peso, Colombia’s manufacturing sector continues its slow and steady decline, and the country’s limited domestic base means demand for imports will remain high. Even the Economist Intelligence Unit admits that Colombia’s “high dependence on a small number of commodities to drive export and investment growth” will leave the country “vulnerable to external shocks, including a prolonged drop in commodity prices and sharper-than-expected peso weakening.”
Current depressed oil prices, which have halved GDP growth from last year and seriously damaged government revenues, are case in point of the country’s increasing vulnerability. A sluggish recovery in the United States and Europe from the crisis of 2008, deceleration in China, and reduced demand in neighboring countries have further dampened Colombia’s economic outlook.
Given these conditions, the prospects for addressing the deep-seated structural inequalities in the Colombian social and economic landscape remain extremely limited. A peace deal with the FARC will not, for one thing, eliminate the elements of armed conflict and violence that continue to produce rural displacement. According to the Internal Displacement Monitoring Centre’s 2015 report, more than 137,000 people were displaced in Colombia during 2014 alone (a figure expected to rise when the victim’s registry is updated later this year).
While the report claims that the peace process can “contribute to ending protracted displacement,” whether this is likely to be the case is questionable. The country’s right-wing paramilitary groups, despite a farcical and staged demobilization over a decade ago, remain the main drivers of the phenomenon. The paramilitaries — often in tandem with the Colombian military — drove the mass wave of rural displacement during the late 1990s and early 2000s.
Today, under new names and on a marginally-reduced scale, they operate throughout the country for the benefit of drug cartels, large landowners, and multinational oil and mining corporations. Political persecutions of trade unionists, human rights activists, students and farmers, meanwhile, go on unabated, as does the plunder of Colombia’s mineral wealth.
Nor will the FARC’s negotiated demise ameliorate the structural sources of inequality (among the highest in the world) and displacement. While the subject of rural development is a key component of the ongoing peace talks between the government and the FARC, serious changes to the basic regime of land distribution are unlikely. As Mauricio Velasquez recently pointed out, the deal struck between the government and the FARC has left radical agrarian reform “off the table.”
Instead, the agreement primarily focuses on infrastructure development, road construction, irrigation systems, and expansion of credit to small farmers and will theoretically provide for restitution — the return, that is, of land stolen from peasants and passed to larger landholders, often for the purposes of intensive cash-crop agriculture or for rearing livestock.
This is not a new issue. Various legal attempts have been made in Colombia to redress the imbalance of land ownership, beginning with Law 200 of 1936, which codified a principle of adverse possession, continuing through the Land Reform Act of 1961, which sought to redistribute unproductive land among landless peasants, to Article 58 of the 1991 Constitution, which again aimed to promote “associative and communal forms of property.”
Such legislation had only limited effect, and what positive measures were created under the 1991 Constitution were largely dismantled by the restructuring and neutering of INCORA (the Colombian land reform institute) by the Uribe government during the first decade of the twenty-first century.
Since 1985, along with the mass displacement of people, between six and eight million hectares of land have been forcibly appropriated , mostly by paramilitary groups. Much of the stolen land was subsequently purchased by local and international investors for pennies on the dollar. The displacements have markedly increased land concentration.
As of 2010, 1.3 percent of the largest landholdings in Colombia occupy 50 percent of rural land. Around 11,000 Colombian landowners at the top of the spectrum occupy 67 percent of rural land; 11,000,000 at the bottom, meanwhile, have 38 percent. Given the persistence of power relations and the continued intensification of industrial agriculture, there is little reason to expect that new legal provisions envisioned in the peace agreement will have much effect.
Ultimately, the long-running conflict has served the interests of the Colombian ruling classes. It has propelled the expulsion of millions of peasants and thereby facilitated the concentration of millions of hectares of land for intensive capitalist agriculture and cattle ranging. In the case of the increasingly predominant extractive sector, the weakening of the FARC over the past fifteen years has also enabled the expansion of the oil and mining industries. In order to attract desperately needed foreign investment as well as to further increase oil production a peace deal is necessary.
The negotiations are thus essentially about the removal of Colombia’s biggest remaining political obstacle. By providing “security” for intensified foreign investment in the extractive sector and “stability” for “rural development,” a peace deal would enhance the completion of an internal market and thus accelerate Colombia’s ongoing incorporation into the structures of a US-dominated capitalist world order.
Viewed in the narrowest terms, the government’s logic is compelling. Over the long haul, however, the gambit is likely to fail. Ironically, the very weakness of the guerrillas in the negotiations may ultimately work against the dominant social forces, as the ensuing agreement will fuel Colombia’s “growth locomotive” while doing little to contain its corrosive runoff. Continued rural displacement and a declining industrial sector unable to absorb it, combined with volatile commodity prices and capital inflows hardly comprise a recipe for the “prosperity for all” that the official hoopla over “peace” relentlessly promises.
For real solutions to the hardship faced by both urban and rural Colombians, political alternatives are needed. It is in those we must place our faith.