Any Colombian ‘peace dividend’ will be muted in 2017

Significance

The negotiations follow the ratification of a revised peace deal with the country’s largest rebel group, the Revolutionary Armed Forces of Colombia (FARC) on November 30. After more than 50 years of armed conflict, the advancement of peace efforts has raised hopes of increased foreign investment, as Colombia’s international image improves. Nevertheless, continued security challenges and a tough global environment threaten to dampen investor enthusiasm.

Impacts

• Investment opportunities in cities that have avoided much of the fighting, such as Bogota, will be largely unaffected by peace deals.
• New deals are unlikely to generate the level of investor enthusiasm initially expected.
• Colombia’s violent reputation can only improve as the operating environment changes, though this will take time.