SCENESETTER FOR CODEL DAVIS - AUGUST 5-9

UNCLAS BOGOTA 007060

SIPDIS

SENSITIVE
SIPDIS

WHA/AND
H - MARK SMITH

E.O. 12958: N/A
TAGS: PREL PGOC ECON CO
SUBJECT: SCENESETTER FOR CODEL DAVIS - AUGUST 5-9

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Summary
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1. (SBU) Post welcomes the August 5-8 visit of CODEL Davis to
Colombia. President Alvaro Uribe was re-elected in May; he
is the first president to be re-elected to a second,
consecutive term in over 100 years. We expect close
bilateral relations between the United States and Colombia to
continue in his second term, which begins on August 7. With
USG help, President Uribe has made great strides in fighting
drug trafficking and terrorism. He recognizes U.S. support
as key to the success of efforts to re-establish central
authority throughout the national territory. As a result of
U.S.-Colombian efforts, drug eradication and interdiction are
at record levels. USAID programs aim to strengthen
democratic institutions, create alternative development
opportunities, and assist people displaced by internal
violence.


2. (SBU) Colombia's human rights record, although imperfect,
is improving. The peace process with the United Self-Defense
Forces of Colombia (AUC) has resulted in the demobilization
of over 30,000 paramilitaries, but rigorous application of
the Justice and Peace Law is needed. While exploratory talks
with the National Liberation Army (ELN) are focused on
establishing an agenda for formal negotiations and a
ceasefire agreement, the Revolutionary Armed Forces of
Colombia (FARC) have yet to enter into discussions with
Uribe. The FARC has held three U.S. citizens for more than
three years; their safe recovery is a top priority. The
economy is growing and the United States and Colombia
concluded Free Trade Agreement negotiations in February.

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Internal Politics
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3. (SBU) President Uribe is the first Colombian president to
be re-elected to a second, consecutive term in over 100
years. He was re-elected on May 28 with 62 percent of the
vote. A coalition of pro-Uribe parties won a collective
majority in the House and Senate on March 12. The
left-leaning Polo Democratico Alternativo party presidential
candidate, Carlos Gaviria, won 22 percent of the vote, giving
the left its best ever showing in Colombia. The Liberal
party received 12 percent of the vote, its poorest showing in
more than 40 years. Uribe,s second inauguration will be
held August 7, 2006. Your CODEL will attend as Uribe's
special guests.

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U.S. Assistance Key to Security Improvements
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4. (SBU) USG security assistance is premised on combating the
interrelated threats of drug trafficking and terrorism and
includes training, material aid, and guidance to security
forces and other institutions. Uribe characterizes U.S.
assistance as critical to the GOC,s "Democratic Security"
policy - aimed at establishing a state presence throughout
national territory - and considers the United States to be
Colombia,s most important ally.

-- Plan Patriota: The military's multi-phased campaign to
re-take areas dominated by the FARC is in its third year.
The first phase, which focused on securing Cundinamarca
Department, which surrounds Bogota, pushed the FARC away from
the capital and resulted in the deaths of at least five
mid-level FARC commanders. The second, more complex phase,
is two years old and is focused on the FARC,s traditional
stronghold in southern Colombia. The operation disrupted the
FARC's hold on the region. Sustainment of troops in this
isolated region is difficult. Infectious diseases -
especially leishmaniasis, a parasitic skin infection - and
landmines are the leading causes of military casualties.

-- Despite the Colombian's military's success, the FARC
continues to attack isolated or smaller police and military
targets throughout the country, while avoiding direct
contests with larger units. Two notable exceptions include
the late December 2005 attack that killed 29 Colombian
soldiers just outside of La Macarena National Park and two
attacks on civilians, resulting in 17 dead and 14 injured, in
southern Colombia in late February. The May 28 presidential
elections, however, were the least violent in recent history.


-- Center for Coordinated Integral Action: With Embassy
support, the GOC formed in 2005 an interagency center to
facilitate delivery of social services in seven areas that
have traditionally lacked state presence and been controlled
by illegal armed groups. The Center focuses on providing
immediate social services, including documentation and
medical care, and longer-term economic development projects.
More than 40,000 individuals have been enrolled in state
health care. Judges, investigators, and public defenders
have been placed in all 16 municipalities of the Plan
Patriota area. A public library was opened in early 2006 in
the town of San Vicente del Caguan, which had long been
dominated by the FARC.

-- Plan Colombia II: The GOC has provided Washington with a
draft proposal of Plan Colombia II. Most of the program
areas outlined continue the same goals the U.S. has supported
since Plan Colombia,s inception in 2000. The programs and
projected costs of this next phase of Plan Colombia are under
discussion.

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Drug Eradication and Interdiction
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5. (SBU) Eradication and interdiction are at record levels.
In 2005, the program surpassed its goal of 130,000 hectares,
but did not reach its stated goal of 3,000 hectares of poppy
because the 2005 crop was too small to survey. The aerial
eradication program has sprayed nearly 101,000 hectares of
coca and 231 hectares of poppy as of July 31, 2006.
Eradication pilots are having a hard time locating poppy
crops, despite devoting more spray weeks to opium, as growers
move into more isolated areas.


6. (SBU) The GOC claims it manually eradicated an additional
32,000 hectares of coca in 2005. Manual eradication is a
high-cost, high-risk program that combines illicit crop
eradication with job creation, and avoids the health and
environmental controversies surrounding aerial eradication.
President Uribe is a proponent of manual eradication. He
launched an ambitious program in January to manually
eradicate coca in La Macarena National Park. The Embassy is
supporting this effort, but three FARC attacks killed 12
policemen and civilian eradicators in February and March.
Another six eradicators were killed by an improved explosive
in La Macarena on August 2. The GOC claims to have manually
eradicated over 15,000 hectares of coca and 112 of poppy as
of July 31, 2006.


7. (SBU) Interdiction operations in 2005 met or exceeded
2004,s record seizures. GOC security forces destroyed 134
cocaine HCl processing laboratories in 2005 and seized record
amounts of processed cocaine (223 metric tons) and coca base.
As of August 1, 2006, the GOC has destroyed 92 HCl labs and
seized over 85 metric tons of processed cocaine and coca base.

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U.S. Assistance to Development and Democracy Building
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8. (U) The USAID Mission in Colombia funds programs in three
key strategic sectors. USAID,s Democratic Governance
programs aim to improve the transparency of the justice
system, assist the peace process, promote respect for human
rights, support democratic processes and foster efficiency
and accountability. USAID programs also promote legal
alternative development opportunities through increased
competitiveness, improved local government infrastructure and
management, and a more favorable environment for investment
and trade. Colombia has the second largest population of
internally displaced persons, behind only Sudan. USAID has
provided support to nearly 2.7 million Colombians displaced
by internal violence. USAID also helps children who have
been forced to serve as child combatants.

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Military Justice and Improved Human Rights Record
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9. (SBU) The Uribe Administration continues to make steady
progress on human rights cases involving military abuse or
collaboration with paramilitaries. We continually emphasize
the importance of creating a legal system that delivers
credible, timely results. In April 2005, Military Penal
Justice Director General Puentes submitted a comprehensive
military justice reform package; congress has approved the
first measure, but approval for the second stage is pending.
A recent incident will test the justice system: on May 22,
Colombian army soldiers gunned down 10 members of en elite
judicial police squadron in Jamundi, Valle Department. These
officers had received DEA training and support and were part
of a successful counter narcotics unit. Eight of the army
officers involved are under arrest, but jurisdiction
(civilian vs. military) has yet to be decided. On June 10,
Uribe announced a proposal to ensure civilians investigate
and review all criminal cases against military defendants to
ensure transparency in human rights cases.


10. (U) Human rights training is mandatory for all members
of the military and police. Less than two percent of human
rights violations are attributable to government security
forces, according to GOC statistics. Homicides fell by 16
percent - to the lowest level in 18 years - kidnappings by 62
percent, and forced displacements by 22 percent in 2005,
building on trends from previous years. The GOC has a
difficult but active dialogue with NGOs, the United Nations,
and foreign governments.

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Extradition
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11. (SBU) President Uribe is a strong supporter of the
U.S.-Colombia extradition relationship. Since taking office,
he has approved more than 350 extraditions to the United
States. President Uribe has approved but suspended the
extradition of four AUC leaders to ensure their continued
cooperation in the AUC demobilization process.

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Demobilization and Peace Process
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12. (SBU) The GOC began negotiations with the United
Self-Defense Forces of Colombia (AUC) in 2002. The AUC
demobilization process is drawing to a close and nearly all
AUC members (more than 30,000) have demobilized since 2003.
A few small groups have not participated in the
demobilization. Over 10,000 illegal armed group members
(from the FARC, ELN and AUC) have individually deserted and
entered the government's reinsertion program since 2002.


13. (SBU) The reinsertion program has limited funding and
logistical problems, but is slowly improving. Colombia has
requested U.S. aid for the demobilization and reinsertion
process. In FY06, Congress approved up to USD 20 million in
demobilization assistance, subject to certification.
Consultations continue with the Congress regarding the U.S.
intention to spend USD 15.5 million in FY06. The USG has
also demarched numerous allies, with some success, to
financially support these processes.


14. (SBU) President Uribe signed the Law of Justice and
Peace, which governs demobilization for ex-paramilitaries, in
July 2005. The Law offers demobilized terrorists a five- to
eight-year alternate sentence, followed by a two-and-a-half
to four-year parole period, but only if they fully
demobilize, turn over all assets, release all hostages and
child soldiers, and give reparations (actual or symbolic) to
victims. Individuals or groups organized for drug
trafficking or illicit enrichment are not eligible for
reduced sentences, and only crimes committed during
membership in the illegal armed group are covered. Rigorous
implementation of the law is key to ensuring peace and
justice in Colombia.


15. (SBU) The National Liberation Army (ELN) began
preliminary discussions with the GOC in Cuba in December 2005
aimed at laying the groundwork for peace talks. A second
round of talks took place in February and a third in May; a
fourth round is set for September. Both the FARC and GOC
have publicly announced they are willing to enter into talks,
particularly on humanitarian exchange, but the FARC rejected
the last seven GOC proposals. New initiatives are in
progress.

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U.S. Hostages
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16. (SBU) The three U.S. contractors captured by the FARC in
February 2003 are the longest held U.S. hostages in the
world. Their safe release continues to be a top priority.
The Colombians are providing full assistance. Uribe has
assured us that the U.S. hostages will be included in any
humanitarian exchange. The Embassy held a commemoration
ceremony on February 13, marking the third anniversary of
their capture.

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Positive Economic Outlook
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17. (U) Tremendous gains in security have helped boost the
Colombian economy. In 2005, Colombia's gross domestic
product (GDP) increased by 5.2 and inflation was 4.9 percent,
the lowest rate in 50 years. The first quarter of 2006 also
started off strong with 5.23 percent growth, while inflation
in the first half of the year is well below target at 3.92.
2005 Foreign Direct Investment increased to USD 5.6 billion,
an increase of 50 percent over 2004, and first quarter 2006
FDI totaled USD 978 million, which is an increase of 6.8
percent over the same period in 2005. The largest U.S.
investors - Drummond (coal),ChevronTexaco and ExxonMobil -
are planning considerable expansion due to the improved
investment climate. Colombia,s exports and imports each
increased more than 20 percent in 2005, and the U.S. is
Colombia,s largest trade partner (approximately 40 percent
of exports and 28 percent of imports). Colombian exports to
the U.S. have grown USD 1 billion per year since ATPDEA's
inception in late 2002, while U.S. exports to Colombia
increased approximately USD 2 billion. Unemployment fell
from 18 percent when President Uribe took office to a little
more than 11 percent in May 2006. Most of the major rating
agencies upgraded Colombia to investment grade in late 2005
and early 2006.


18. (SBU) Free Trade Agreement negotiations between the U.S.
and Colombia concluded in February. Both countries are
verifying the final text of the agreement, and notification
to the U.S. Congress will follow completion of that process.
The agreement will provide stronger IP protection and give
increased market access to key U.S. industrial and
agricultural exports. For Colombia, the agreement will
create a more attractive investment climate, locks in ATPDEA
benefits, boosts their sugar quota, and addresses some of
their concerns regarding sanitary and phyto-sanitary.
WOOD