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Colombia, work in progress

By Heather Berkman of Eurasia Group

After decades of intense armed conflict that tarnished the country’s image, Colombia’s government has drastically reduced the yearly tally of homicides, kidnappings and attacks on infrastructure and has demobilized thousands of left- and right-wing illegal armed groups, resulting in a surge in foreign direct investment.

But lingering beneath the glowing reports and favourable statistics are disquieting developments – and the government is feeling the pressure. This could make it less willing to push through the reforms that are necessary to solidify Colombia’s resurgence.

Colombia is clearly a success story in many respects. Security and technology advances have sparked an investment bonanza in heavy oil and coal production (total FDI in 2011 amounted to $13.2bn, nearly 60 per cent of which went to oil and mining investment), which in turn has reignited the economy and filled government coffers.

Given investors’ voracious appetite for the country’s extractive industries, the government’s push to expand pipelines and railways, and improving regional political and economic ties, Colombia’s economy is expected to grow by at least 5 per cent this year. Time magazine’s decision to feature President Juan Manuel Santos on its April cover in the run up to the Summit of the Americas cemented Colombia’s image as one of Latin America’s rising stars.

As the president smiles for the international press, his image back home is beginning to slip. Recent public opinion polls by Gallup and Ipsos Napoleon show that the president’s popularity has been falling over the last six months (Ipsos Napoleon reported in April that only 52 per cent of its respondents were satisfied with Santos’s presidency, compared to over 70 per cent last November). Most Colombians are unhappy with the government’s sluggish efforts to improve security, rebuild infrastructure damaged by two heavy rainy seasons, tackle high unemployment (at 10.4 per cent in March) and implement new laws intended to return land to people displaced by the armed conflict.

The May 15 attack on former interior minister Fernando Londoño in northern Bogota cast a shadow over Colombia’s improved security reputation. And while Colombia is unlikely to return to the widespread insecurity of the 1980s and 1990s, this most recent incident accompanies a steady uptick in attacks on pipelines and roads in recent months, as well as assassinations of mayors and local-level officials that tend not to garner as much media attention. Meanwhile, growing concerns over extortion and illegal mining by armed groups such as the FARC pose persistent challenges to the development of Colombia’s oil and mining sectors.

Santos still has the support of a large coalition in congress, and his prospects of running for and winning re-election in 2014 remain strong. Barring a further drop in his popularity, he should even be able to push forward his judicial and tax reform agenda for the remainder of the year. But his falling approval ratings will probably diminish his willingness to embrace politically unpopular – yet economically necessary – reforms, such as overhauling unsustainable pension and health systems.

Colombia has nearly 4 million people who were forcibly removed from their land and the government still has yet to figure out how to help them return to their homes – and at what cost to the state. In a likely effort to drum up popular support, Santos’s recent statements have had a populist ring to them, such as claiming that pending tax reform will make wealthy Colombians “weep” and promising the rollout of government-financed, low-income housing.

Santos is clearly no Hugo Chávez and Colombia will likely remain on a market-friendly course. Despite the international attention, however, the road to a real Colombian comeback is still littered with serious and pressing obstacles.

Heather Berkman is Latin America analyst at Eurasia Group

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Rico

"Rico" is the crazy mind behind the Q media websites, a series of onlinemagazines that includes TodayColombia.com. Rico brings his special kind of savvy to online marketing. His websites are engaging, provocative, informative and sometimes off the wall, where you either like or you leave it. The same goes for him, like him or leave him.There is no middle ground. No compromises, only a passion to present reality as he sees it!