Colombia and FARC scramble to save peace deal

03 October 2016 20:56 Source:ICIS News

FARC guerrillas (Action Press/REX/Shutterstock)
With the referendum’s narrow defeat at the polls, the peso is down almost 2% and credit rating agencies are closely watching the aftermath. (Action Press/REX/Shutterstock)

MEDELLIN, Colombia (ICIS)--Colombia's government and Marxist guerrillas pushed on Monday to revive a peace plan to end their 52-year war the day after voters rejected the deal in a surprising referendum result that plunged the nation into uncertainty.

Colombians voted narrowly against a peace deal with the Marxist Revolutionary Armed Forces of Colombia (FARC) in Sunday's referendum.

With just 37.43% of registered voters casting their vote, absenteeism was what allowed the "No" voters to win with 50.21% of the vote, or 6,431,376 ballots.

Opponents want assurances that the rebels will hand in cash earned from drug smuggling, spend time in jail and earn their political future at the ballot box rather than get guaranteed unelected seats in Congress.

Colombia's government and FARC rebels reached a final peace deal in September to end one of the world's longest conflicts.

Under the historic agreement, FARC agreed to lay down arms and reintegrate into civilian life.

More than 220,000 people were killed in the conflict, tens of thousands disappeared and millions fled their homes.

In the aftermath of the referendum vote, the Colombian peso was down almost 2%, trimming steeper early losses, and was at 2,932 pesos to the US dollar by Monday afternoon.

Ratings agencies are closely following the outcome of the vote on the peace agreement negotiated by the administration of President Juan Manuel Santos.

Erich Arispe, Fitch's Colombia analyst, said he expectes the government will continue to implement a consistent and credible policy response to address economic challenges in terms of high current account deficits, high inflation and the negative impact of lower oil prices.

"Fitch's base case is that the government will introduce and obtain congressional approval for a revenue-positive tax reform by the end of 2016," Arispe said. "It is difficult to judge the final outcome, but a net positive-revenue measure and its successful implementation are important to compensate the loss of oil-derived revenues from an already low revenue base, and replace expiring taxes in 2018."

INSET IMAGE: Workers count the votes on Sunday, 2 October 2016. (MARIANA GREIF/SIPA/REX/Shutterstock)

By Leela Landress de Perez