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Santos Says Colombia in Final Phase of Peace Talks as Sworn In

Aug. 7 (Bloomberg) -- Colombian President Juan Manuel Santos, who was sworn in today for a second four-year term, said peace talks with Marxist guerrillas are in their final stage even after rebels stepped up attacks on oil pipelines.

Santos, 62, won 51 percent of the June 15 runoff vote on pledges to persuade insurgents to lay down their weapons after 50 years of conflict. He has held talks with the nation’s biggest rebel group, the Revolutionary Armed Forces of Colombia, or Farc, in Cuba since 2012. He also said in a speech outside Congress that he hopes the second biggest guerrilla group, National Liberation Army, or ELN, join the talks soon.

“Colombia is on the road to hope, to peace and social prosperity ,” Santos said. In a decade, Colombia’s goal is “to be a country in total peace, with equity and the best educated in Latin America.”

Santos also said the Farc’s recent terrorist attacks were an “unacceptable contradiction” and threaten the negotiations. A week ago, he said that the guerrillas were “playing with fire” following attacks on oil pipelines as well as energy and water infrastructure.

Former Finance Minister Oscar Ivan Zuluaga, who ran against Santos and got 45 percent of the votes, had promised a “full-frontal assault on terrorism.”

While warning the rebels about the consequences of continued attacks, Santos is unlikely to end the talks, said Cynthia Arnson, director of the Latin American program at the Woodrow Wilson International Center for Scholars in Washington.

Campaign Centerpiece

“Santos made the peace process the centerpiece of his campaign,” Arnson said in a telephone interview. He “has way too much staked on a successful outcome for him to break it off at this point.”

Ecopetrol SA, Colombia’s largest oil producer, said July 31 that second-quarter profit fell 18 percent after pipeline disruptions caused by rebel attacks and community blockades reduced production and increased costs.

Santos said last month that Mauricio Cardenas will stay on as Finance Minister as the nations’s economy grew at the fastest pace in Latin America in the first quarter and is forecast to be the only major economy in the region other than Mexico to see growth accelerate this year.

Cardenas and Santos will need to shore up tax revenue to fund any peace deal, according to Francisco Rodriguez, an economist at Bank of America Corp.

Expensive Deal

“Financing a peace deal is expensive,” Rodriguez said by phone from New York. “You have to have resources to integrate these groups into the economy, and you have to have resources devoted to rural reconstruction in the areas where the Farc was most dominant.”

Santos has said peace may boost growth by as much as 2 percentage points a year.

The Andean nation’s economy expanded 6.4 percent in the first quarter, its fastest pace in more than two years and is forecast in a Bloomberg survey to grow 4.8 percent this year, up from 4.7 percent in 2013.

“It’s natural in the midst of the discussion that those involved try and strengthen their bargaining positions,” said Rodriguez. “I see a lot of public discourse from both sides as being more than anything posturing, but I do think that behind these headlines we’re actually quite close to getting a deal.”

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net Philip Sanders

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