The accord is only the beginning: As many have already commented, after the agreement comes the hard work of building peace. This can be broken down very broadly into reestablishing government control over rural areas where state presence has historically been limited or absent, addressing the needs of victims of the conflict, and demobilizing and reintegrating former combatants in ways that contribute positively to society. On the security front, the Disarmament, Demobilization, and Reintegration process (DDR) is already a concern to Colombia watchers. It is unclear if all members of the various FARC combat and support units will agree to demobilize or if they will instead migrate into other insurgent organizations such as the Ejercito de Liberación Nacional or join Colombia’s vast network of criminal organizations. In fact, a recent experience with the demobilization of right-wing paramilitaries affiliated with the Autodefensas Unidas de Colombia under President Uribe showed that a substantial number of former combatants joined criminal organizations, known as BACRIM or Bandas Criminales. The state will have to move swiftly to establish its presence in those areas where the FARC once operated, or else these gaps will be filled by organized crime. For those insurgents that do demobilize, their success will depend on their ability to find legitimate work and the people’s ability to accept former combatants as members of their community.

Eoin Treacy's view

In Freakonomics Dubner and Levitt make some very instructive points on the incentives drug dealers have to persist in what is typically a dangerous, competitive environment where death is a realistic possibility before the aspiration to achieve riches is every achieved. If we accept that demand for illicit narcotics is a relative constant, subject to a moderate growth rate, then volatility arises as a factor of supply. 

By agreeing to a peace accord the FARC is opening up a vast territory for competition between other paramilitary bands. The only way the Colombia government can possibly capitalise on this power vacuum is to deliver stronger economic growth prospects to the affected region so that the incentive to participate in narcotics is reduced. 

The Colombian Peso almost halved between late 2014 and early 2016. It has since stabilised and is now ranging in the region of the trend mean. A sustained move above COP3150 would be required to signal a return to US Dollar dominance. 

The Global X FTSE Colombia 20 ETF collapsed with the currency but has been ranging in the region of the trend mean since April and is now testing the upper boundary. A sustained move below it would be required to question recovery potential.