SCENESETTER FOR CODEL BAYH

UNCLAS BOGOTA 001088

SIPDIS

SIPDIS
SENSITIVE

DEPARTMENT FOR WHA/AND
DEPARTMENT FOR H

E.O. 12958: N/A
TAGS: PREL PGOC ECON CO
SUBJECT: SCENESETTER FOR CODEL BAYH

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Summary
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1. (SBU) Post welcomes CODEL Bayh to Colombia. President
Alvaro Uribe was re-elected in May, 2006; 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. With USG help, President Uribe has made great strides
in fighting drug trafficking and terrorism. He recognizes
U.S. support is 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. In January, the GOC
presented a Plan Colombia consolidation phase strategy, with
a heightened emphasis on social development. USAID programs
aim to strengthen democratic institutions, foster a culture
of human rights, 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 32,000 paramilitaries, but rigorous application of
the Justice and Peace Law, the process of which is just
beginning, is needed. Exploratory talks with the National
Liberation Army (ELN) are focused on establishing an agenda
for formal negotiations and a ceasefire agreement, but the
Revolutionary Armed Forces of Colombia (FARC) have yet to
enter into discussions with the GOC. The FARC has held three
U.S. citizens for more than four years; their safe recovery
is a top priority. The economy is growing and the United
States and Colombia signed a Free Trade Agreement in November

2006. End Summary

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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, 2006 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. In October, elections will take place
for mayors and city council members. Politicians are already
positioning themselves and their parties for the 2010
presidential elections.

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U.S. Assistance Key to Security Improvements
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4. In January, the GOC presented a Plan Colombia
consolidation phase strategy. The proposal contains a
heightened emphasis on social development, assigning new
resources to human rights, displaced people, and
Afro-Colombian and indigenous communities. It also aims to
reintegrate 42,000 demobilized ex-combatants and deserters
and promote Colombia's competitiveness and licit exports.
The GOC is seeking funding from the United States and
European countries.


5. (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. Three notable exceptions include
the late December 2005 attack that killed 29 Colombian
soldiers just outside of La Macarena National Park, two
attacks on civilians, resulting in 17 dead and 14 injured, in
southern Colombia in late February 2006, and a November 2006
attack that killed 17 police officers and three civilians in
northern Colombia.

-- Center for Coordinated Integral Action: With U.S. 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.

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Drug Eradication and Interdiction
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6. (SBU) Eradication and interdiction are at record levels.
The aerial eradication program exceeded the mid-year revised
bilateral spray goals of 160,000 hectares of coca with a 2006
year-end total of 169,399 hectares sprayed. This was the
sixth straight record spray year and 24 percent more than the
2005 total. In interdiction programs, National Police and
military forces seized over 203 metric tons of cocaine (HC1)
and coca base in 2006, a near record quantity, and destroyed
200 HC1 laboratories, also a record.


7. (SBU) The GOC reported the manual eradication of over
43,808 hectares of ilicit crops in 2006 (including 42,111
hectares of coca and 1,697 hectares of opium poppy). Manual
eradication remains costly in terms of human and mechanical
resources: 41 security force personnel and civilian
eradicators were killed in 2006 by improvised explosive
devices (IEDs) and narcoterrorist attacks; Manual eradication
projects placed a heavy burden on the National Police to
provide security for eradicators.

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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 progress
on human rights cases involving military abuse or
collaboration with paramilitaries. We continually stress the
importance of creating a legal system that delivers credible,
timely results. MOD Santos has identified reform of the
military justice system as one of five key provisions of his
proposed overhaul of the military; in October, he named the
first civilian - and the first woman - as director the
Military Penal Justice System.


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 5
percent - to the lowest level in 20 years - kidnappings by 12
percent, and forced displacements by 20 percent in 2006,
building on trends from previous years. The GOC has a
difficult but active dialogue with NGOs, the United Nations,
and foreign governments.


11. (U) On May 22, 2006, Colombian army soldiers gunned down
10 members of an elite judicial police squadron in Jamundi,
Valle Department. These police officers had received DEA
training and support and were part of a successful counter
narcotics unit. Some 15 soldiers, including the battalion
commander, are on trial. In June, the military and civilian
justice systems signed a Memorandum of Understanding (MOU)
that provided the Prosecutor General's office with the power
to investigate and make jurisdictional recommendations in all
criminal cases against military defendants, to ensure
transparency in human rights cases. In the case of Jamundi,
for example, civilian courts have jurisdiction.

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Extradition
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10. (SBU) President Uribe is a strong supporter of the
U.S.-Colombia extradition relationship. Since taking office,
he has approved 426 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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11. (SBU) The GOC began negotiations with the United
Self-Defense Forces of Colombia (AUC) in 2002. The AUC
demobilization process drew to a close in 2006, and nearly
all AUC members (more than 32,000) have demobilized. Some
former AUC members have not participated in the
demobilization or are forming new criminal groups. 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.


12. (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. The GOC currently pays
96 percent of the Reintegration Program's budget, while the
international community pays 4 percent. Reintegration
Commissioner Frank Pearl, who has been in charge of the
Reintegration Program since September 2006, will launch a
Capital Investment Fund with the support of Bill Gates on
March 19 in Cartagena to raise funds for reintegration.
Pearl has warned, however, completely abolishing former
paramilitary networks will be more complex and take longer
than anticipated.


13. (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, completely confess to all crimes, 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. The confessions (version libres) of ex-paramilitary
chiefs began in December, with ex-chief Salvatore Mancuso
beginning his version libre process. Rigorous implementation
of the law and ensuring the safety of witnesses and victims
are key to ensuring peace and justice in Colombia.


14. (SBU) The ELN has been negotiating with the GOC for over
a year, but it is unclear whether it is ready to implement a
cease-fire; the U.S. supports a process that leads to ELN
cease-fire, disarmament, and demobilization. The GOC and ELN
are discussing ceasefire terms, but progress is slow. While
the FARC and the GOC had publicly announced their willingness
to enter into talks, an October 19 car bomb attack that left
17 injured led President Uribe to revoke outreach efforts as
long as the FARC continued to commit terrorist acts.

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U.S. Hostages
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15. (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 fourth anniversary of
their capture. In January, former Development Minister
Fernando Araujo escaped from six years of FARC captivity
after an army rescue attempt. In February, a military
operation resulted in the rescue an army captain whom the ELN
had kidnapped in 2003.

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Positive Economic Outlook
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16. (U) Significant gains in security have helped boost the
Colombian economy. In the third quarter of 2006, Colombia's
gross domestic product (GDP) increased by 7.7 percent.
Inflation in 2006 was 4.5 percent, the lowest rate in 50
years. The GDP growth has been fueled by a 30 percent
increase in the construction sector and robust consumer
spending. 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 October 2006.


17. (SBU) On November 22, 2006 Colombia and the U.S. signed a
Trade Promotion Agreement (TPA). 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, lock in ATPDEA benefits, and expand employment
opportunities for small and medium-sized business. The U.S.
Congress recently approved a six month extension of the
ATPTDEA to promote tariff relief for Colombian businesses as
ratification on the TPA moves forward.

DRUCKER