SEVEN PERCENT INCREASE IN 2005 DEFENSE BUDGET

UNCLAS SECTION 01 OF 02 BOGOTA 011331

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MASS SNAR PINR MCAP PTER ECON CO
SUBJECT: SEVEN PERCENT INCREASE IN 2005 DEFENSE BUDGET

REF: BOGOTA 6598

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Summary
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1. (U) The GOC's 2005 central defense budget is 9.2 trillion
pesos, an approximately seven percent increase over 2004
(reftel). Defense spending has grown over 50 percent since

2001. The 2005 increase will fund over 16,000 new uniformed
police and military, including three Army mobile brigades,
one Army high mountain battalion, 5,000 rural police
officers, eight mobile police squadrons, 158 additional
hometown soldier platoons, and 969 marines. Despite the
steady increase in defense spending since Uribe took office,
spending on social services as a percentage of the national
budget has not fallen. Social Protection and Education
programs continue to receive more resources than the central
defense budget. End Summary.

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Defense Spending Increased Again
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2. (U) In late October, the Colombian Congress approved the
GOC's 2005 national budget, which includes 9.2 trillion pesos
for defense, a 7.1 percent increase -- 610 billion pesos --
over 2004 spending. The additional funds will finance
personnel growth and compensate for increases in routine
expenses. Because GOC budget practices differ from those in
the U.S., the figures below should be considered in the
context of the text before drawing conclusions.


3. (U) Since 2001, Colombian central defense budgets have
been:

2001: 6.0 trillion pesos
2002: 6.69 trillion pesos
2003: 8.117 trillion pesos
2004: 8.59 trillion pesos
2005: 9.20 trillion pesos (projected and approved by Congress)
2006: 8.86 trillion pesos (projected as of July 2004, but
probably an underestimation)


4. (U) The central defense budget covers salaries; the
operating costs for each service, the joint staff, and the
Defense Ministry; pensions for a small number of civilian
employees; health care services; and investments, including
heavy equipment and training. The central budget does not
include most non-operational ("decentralized") expenses, such
as pensions for uniformed staff and the security forces'
private sector ventures, including the Tequendama Hotel and
Business Center and Satena Airlines. This "decentralized"
budget is 2.64 trillion pesos for 2005.


5. (U) The 2005 central defense budget can be broken down as
follows:

General Management (includes Defense Ministry): 623.34
billion pesos
Joint Staff: 38.86 billion pesos
Army: 3.42 trillion pesos
Navy: 664.17 billion pesos
Air Force: 690.21 billion pesos
Police: 3.07 trillion pesos
Health Care: 686.55 billion pesos
Miscellaneous: 12.5 billion pesos


6. (U) Alternatively, it can be broken down in the following
manner:

Military and Ministry Operational Expenses: 5.16 trillion
pesos
Military and Ministry Investment: 655.48 billion pesos
Police Operational Expenses: 3.29 trillion pesos
Police Investment: 102.6 billion pesos (this is the only
figure that has decreased from 2004. Investment in 2004 was
112 billion pesos).


7. (U) By December 2005, the GOC plans to increase the
security forces by 16,345 men, bringing the total to 374,125
uniformed police and military. Before Uribe took office in
July 2002, the police and military totaled 278,796. If all
increases projected for 2005 take place as planned, the
security forces will have increased by 34 percent, or almost
100,000 members, during Uribe's first three and a half years
in office. The 2005 increases will be:

-- Three Army mobile brigades (total: 15)
-- One Army high mountain battalion (total: seven)
-- 5,000 rural police officers (Carabineros) (total: 20,000)
-- Eight mobile police squadrons (EMCAR) (total: 54 squadrons)
-- 158 hometown soldier platoons (total: 27,006 hometown
soldiers
in 754 municipalities)
-- 969 marines (total: 4,355)


8. (U) Projected increases in 2006 are:

-- Three Army mobile brigades
-- One Army high mountain battalion
-- 5,700 hometown soldiers
-- 500 marines

9. (U) Increased defense spending has not displaced spending
on social services. The total national budget (excluding
service on the national debt) in 2005 is 59.657 trillion
pesos, a 19.6 percent increase over 2004's 49.876 trillion
peso budget. Defense spending represents 15.4 percent of the
national budget, down from 16.3 percent in 2004. It is the
nation's third largest budget expense. Key program budgets
are as follows, according to the Finance Ministry:

Social Protection: 22.4 trillion pesos
Education: 10.6 trillion pesos
Central Defense Budget: 9.2 trillion pesos
Public Health: 7.4 trillion pesos


WOOD