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Peace will cost Colombia $44 billion over 10 years, senator says

Published 10/08/2014, 10:45 AM
Updated 10/08/2014, 10:50 AM
Peace will cost Colombia $44 billion over 10 years, senator says

BOGOTA (Reuters) - Colombia must invest at least 90 trillion pesos ($44.4 billion) to implement a peace deal with Marxist rebels to end a 50-year conflict, says a senator who backs the current peace talks, adding the amount is much less than the cost of waging war.

The figure is the first estimate of the cost of a peace accord to end the conflict with the Revolutionary Armed Forces of Colombia, or FARC.

"The minimum cost for the next 10 years is estimated at 90 trillion pesos," Senator Roy Barreras, president of the Colombian Congress's peace commission, said late on Tuesday.

He said the money would be used to finance reintegration programs for former rebels, victim compensation, the return of displaced populations and land reform.

The government must implement structural reforms to guarantee there will be sufficient funds for such post conflict programs, Barreras said, echoing analysts who say the government should re-evaluate spending and taxation.

"There will need to be adjustments, modifications, and we need budget reform, a structural tax reform for peace," he told Reuters after his presentation to Congress.

Barreras, who is a member of President Juan Manuel Santo's U Party, said the war now costs the country about 100 trillion pesos ($49.6 billion) a year.

"Peace may cost 9 trillion each year, that's to say that with one year of war we pay for peace and from there on out Colombia will keep growing without the burden of the conflict."

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The estimate comes as the government is asking legislators to approve a package of tax reforms to raise an additional $26 billion between 2015 and 2018, extending some tax increases that were meant to expire at the end of the year and upping other duties.

The coalition backing Santos has a solid majority in Congress, making approval of the tax reform package likely.

Analysts have said the tax increases may not be enough, given falling oil revenues and the costs of implementing a peace deal, and that the government will have to ask for another package of increases in four years.

Royalties and earnings from oil have fallen as companies face delays in environmental licensing, while rebel attacks continue to disrupt pipelines.

The peace talks being held in Havana, Cuba, are nearly two years old. Negotiators have reached preliminary agreements on three of five topics: political participation for the FARC, land reform and the illegal drug trade.

The two sides are now debating victim compensation, and will then discuss reintegration of rebel fighters.

Violence over the past five decades between leftist rebels, the government, drug cartels and paramilitary groups has killed more than 200,000 and displaced millions.

President Santos will travel to Europe in November to try to raise funds to support peace efforts.

(Reporting by Carlos Vargas; Writing by Luis Jaime Acosta and Julia Symmes Cobb; Editing by Peter Galloway)

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