U.S Treasury’s Lew says Colombia peace deal to boost investment, unlock new aid

[September 29, 2016]  By David Lawder

BOGOTA (Reuters) - Colombia’s peace deal with the Marxist FARC rebel group will bring more investment to the country, backed partly by new donor aid and loans from multilateral development banks, U.S. Treasury Secretary Jack Lew and his Colombian counterpart said on Wednesday.

Lew told a news conference in Bogota that the peace accord, signed on Monday and set to be voted on by the Colombian people on Sunday, would add to the confidence of foreign investors in Colombia. The 52-year war killed 220,000 people and left millions displaced.

"Implementing the agreement, showing that Colombia has a stable future, I think will make Colombia a more attractive place for foreign investment," Lew said after meeting with Colombian Finance Minister Mauricio Cardenas and President Juan Manuel Santos.

He said Santos' government already had an "excellent reputation" among foreign investors for sound management of fiscal policy and pursuit of economic reforms, despite major challenges from low oil prices.

Cardenas said the peace accord would attract both domestic and foreign investment and spur new spending on infrastructure and schools in former conflict areas. He declined to specify amounts but previously estimated that peace with FARC could boost Colombia’s economic growth by 1 percentage point annually.

"It will be at the initial stages, more tourism. That’s one of the areas we think the agreement will have the most direct and immediate impact," Cardenas said. "We will be able also to secure additional funding through cooperation, donors and lending by multilaterals to support expenditures and investments in the rural communities where the conflict was most acute.”

Treasury Secretary Jack Lew speaks during a news conference in Brasilia, Brazil September 27, 2016. REUTERS/Ueslei Marcelino

Former FARC fighters are already making plans for eco-tourism ventures and cheesemaking operations in vast jungles largely untouched for decades.

The peace deal gives FARC a voice in Colombia’s political process. Cardenas said that put the group “in the competition for ideas” but would not alter the center-right government’s economic reform plan, "which thinks that one of the pillars of the success of any country is having low inflation, low fiscal deficit, low debt, and at the same time having a progressive agenda."

Lew said the United States was still committed to providing bilateral aid to Colombia and that he and Cardenas discussed opportunities to gain support from multilateral institutions such as the International Monetary Fund, World Bank and Inter-American Development Bank.

(Reporting by David Lawder; Editing by Peter Cooney)

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