Colombians Reject Peace Accord in Stunning Defeat for Santos
Unexpected outcome likely to rattle country’s markets
Former President Uribe’s party campaigned against the deal
Colombian President Juan Manuel Santos scrambled to cap the fallout from the razor-thin defeat of his peace plan, ordering a cease-fire with Marxist rebels to remain in effect and dispatching his negotiators to resume talks just hours after the referendum result was announced.
On Sunday, six days after Santos signed the accord to end the conflict in front of regional heads of state, Colombians rejected it 50.2 percent to 49.8 percent. Turnout was 37 percent and only 54,000 votes separated the two sides. While nearly everyone wants an end to violence, many balked at the idea of rebel leaders receiving lenient treatment for crimes such as murder, and objected to them receiving seats in Congress and a monthly payment from the government.
The president who spent four years forging the accord and who had stated before the referendum that there was no “plan B” was suddenly in need of one when it became clear that the ‘yes’ vote had fallen short. He said he would convene political groups -- and in particular the ‘no’ camp -- for talks on Monday to determine the way forward. The Revolutionary Army Forces of Colombia also said they would keep respecting the cease-fire.
“As president, I retain my powers and my obligation to maintain public order and to seek and negotiate peace,” Santos said. “I will continue seeking peace until the last minute of my presidency.”
The ‘no’ campaign was led by the Democratic Center Party of former President Alvaro Uribe, Santos’ former ally. Uribe, who is likely to play a key role in whatever happens next, told reporters that he wants to contribute to a “national pact,” and said he would back a lighter punishment but not impunity for the FARC. Santos and his allies denied that the accord granted the rebels impunity, and said concessions were worth paying to end violence that has left more than 200,000 dead in the nation of 49 million.
Voters in Bogota backed the deal, while the western coffee-producing region and Uribe’s home province of Antioquia rejected it.
On Sunday, FARC leader Rodrigo Londono, who is better known by his alias “Timochenko,” still held out hopes for peace.
“The FARC maintain their desire for peace and reiterate their willingness to use only words as a weapon of construction into the future. For the Colombian people who dream of peace, count on us. Peace will triumph,” he said in remarks to reporters.
Market Volatility
The referendum results could unsettle financial markets, weighing on government bonds and the peso once they resume trading on Monday. The peso has strengthened 10 percent this year, the best performer among major Latin American currencies after the Brazilian real.
Colombian bonds fell in overnight trading, driving the yield on the government’s dollar-denominated debt due January 2026 up 7 basis points to 3.28 percent.
“We’ll likely see a lot of volatility in the coming days. Bonds and the peso will probably fall,” Munir Jalil, head analyst at Citigroup Inc.’s Colombia unit, said by phone from Bogota.
The result may also make it harder for the government to pass its tax reform bill this year, he said, which it needs to do to plug a hole in its finances caused by the oil price drop.
At least three polls published last week showed that voters would back the deal by 60 percent or more. Bad weather caused by Hurricane Matthew may have contributed to low turnout in the Caribbean coast, an area whose residents heavily backed the deal by a wide margin. Turnout was as low as 19 percent in the coastal province of La Guajira.
The agreement would have granted the largest guerrilla army in the Americas seats in Congress, agricultural reform and reduced sentences for crimes in return for handing in their weapons.
Drop in Violence
Levels of violence dropped during the talks, as the FARC declared a series of unilateral cease-fires and the air force stopped bombing guerrilla camps. Acts of terrorism fell to 167 in the first eight months of the year, according to the Defense Ministry, down 77 percent from the same period in 2012, the year the talks started.
During half a century of violence, the guerrillas fought for a Cuban-style revolution, ambushing army patrols, blowing up oil pipelines and charging businesses protection money.
Without the FARC scaring away investors and without the war diverting government spending from more productive uses, Colombia’s economy could grow 1 percentage point per year faster, according to the Finance Ministry.
Unexpected outcome likely to rattle country’s markets
Former President Uribe’s party campaigned against the deal
Colombian President Juan Manuel Santos scrambled to cap the fallout from the razor-thin defeat of his peace plan, ordering a cease-fire with Marxist rebels to remain in effect and dispatching his negotiators to resume talks just hours after the referendum result was announced.
On Sunday, six days after Santos signed the accord to end the conflict in front of regional heads of state, Colombians rejected it 50.2 percent to 49.8 percent. Turnout was 37 percent and only 54,000 votes separated the two sides. While nearly everyone wants an end to violence, many balked at the idea of rebel leaders receiving lenient treatment for crimes such as murder, and objected to them receiving seats in Congress and a monthly payment from the government.
The president who spent four years forging the accord and who had stated before the referendum that there was no “plan B” was suddenly in need of one when it became clear that the ‘yes’ vote had fallen short. He said he would convene political groups -- and in particular the ‘no’ camp -- for talks on Monday to determine the way forward. The Revolutionary Army Forces of Colombia also said they would keep respecting the cease-fire.
“As president, I retain my powers and my obligation to maintain public order and to seek and negotiate peace,” Santos said. “I will continue seeking peace until the last minute of my presidency.”
The ‘no’ campaign was led by the Democratic Center Party of former President Alvaro Uribe, Santos’ former ally. Uribe, who is likely to play a key role in whatever happens next, told reporters that he wants to contribute to a “national pact,” and said he would back a lighter punishment but not impunity for the FARC. Santos and his allies denied that the accord granted the rebels impunity, and said concessions were worth paying to end violence that has left more than 200,000 dead in the nation of 49 million.
Voters in Bogota backed the deal, while the western coffee-producing region and Uribe’s home province of Antioquia rejected it.
On Sunday, FARC leader Rodrigo Londono, who is better known by his alias “Timochenko,” still held out hopes for peace.
“The FARC maintain their desire for peace and reiterate their willingness to use only words as a weapon of construction into the future. For the Colombian people who dream of peace, count on us. Peace will triumph,” he said in remarks to reporters.
Market Volatility
The referendum results could unsettle financial markets, weighing on government bonds and the peso once they resume trading on Monday. The peso has strengthened 10 percent this year, the best performer among major Latin American currencies after the Brazilian real.
Colombian bonds fell in overnight trading, driving the yield on the government’s dollar-denominated debt due January 2026 up 7 basis points to 3.28 percent.
“We’ll likely see a lot of volatility in the coming days. Bonds and the peso will probably fall,” Munir Jalil, head analyst at Citigroup Inc.’s Colombia unit, said by phone from Bogota.
The result may also make it harder for the government to pass its tax reform bill this year, he said, which it needs to do to plug a hole in its finances caused by the oil price drop.
At least three polls published last week showed that voters would back the deal by 60 percent or more. Bad weather caused by Hurricane Matthew may have contributed to low turnout in the Caribbean coast, an area whose residents heavily backed the deal by a wide margin. Turnout was as low as 19 percent in the coastal province of La Guajira.
The agreement would have granted the largest guerrilla army in the Americas seats in Congress, agricultural reform and reduced sentences for crimes in return for handing in their weapons.
Drop in Violence
Levels of violence dropped during the talks, as the FARC declared a series of unilateral cease-fires and the air force stopped bombing guerrilla camps. Acts of terrorism fell to 167 in the first eight months of the year, according to the Defense Ministry, down 77 percent from the same period in 2012, the year the talks started.
During half a century of violence, the guerrillas fought for a Cuban-style revolution, ambushing army patrols, blowing up oil pipelines and charging businesses protection money.
Without the FARC scaring away investors and without the war diverting government spending from more productive uses, Colombia’s economy could grow 1 percentage point per year faster, according to the Finance Ministry.
