VISIT OF SENATOR CHUCK HAGEL TO BOGOTA AND

C O N F I D E N T I A L BOGOTA 003433 SIPDIS E.O. 12958: DECL: 09/11/2018 TAGS: PREL ETRD PTER ENRG SNAR MARR KJUS CO SUBJECT: VISIT OF SENATOR CHUCK HAGEL TO BOGOTA AND CARTAGENA -- AUGUST 28-31, 2008 Classified By: CDA Brian A. Nichols Reasons 1.4 (b and d) ¶1. (C) Summary. Senator Chuck Hagel, Southcom Deputy Commander General Glen Spears and delegation visited Bogota and Cartagena from August 28-31, 2008. In Bogota, Senator Hagel, the Ambassador and delegation met with President Alvaro Uribe, who urged support for the U.S.-Colombia Trade Promotion Act, and raised concerns over Venezuela, Ecuador, and Panama. The Senator also met with Finance Minister Oscar Zuluaga, Prosecutor General Mario Iguaran, and key business leaders in Bogota to discuss the country's economic outlook. In Cartagena, the Senator met with the mayor and received a DEA briefing on counterdrug efforts, toured a port security program co-sponsored by the USG and a USAID-sponsored service center for demobilized ex-combatants. End Summary. URIBE PUSHES FOR CTPA -------------- ¶2. (C) In an August 29 meeting with President Uribe and Foreign Minister Jaime Bermudez, President Uribe told Senator Hagel's delegation and Ambassador Brownfield that he understood the U.S. political situation that stymied the passage of the U.S.-Colombia Trade Promotion Act (CTPA). Uribe urged that Hagel try to convince Speaker of the House Nancy Pelosi to allow the agreement to come to the floor for a vote during the November 2008 lame duck session. Uribe underscored the need for Colombia to attract foreign investment so it can better confront terrorists and illicit crops by offering alternative development and economic growth. He said Colombia had addressed the labor-concerns voiced by the Democrats; Uribe had ratified both the legality of strikes bill and cooperative bills into law -- enhancing Colombia's labor rights regime. Uribe noted he would travel with a large delegation to the U.S. Congress during the three week session in September, urging passage of the CTPA this year. Uribe told Hagel that waiting until a new administration took office to bring the CTPA to a vote would require the Government of Colombia (GOC) to re-educate new congressmen on the issue. REGIONAL STRATEGIC INTERESTS -------------- ¶3. (C) Uribe noted the strategic political interests the USG had in maintaining a strong relationship with Colombia, one of its strongest allies in the region, particularly regarding foreign investment and open markets. He noted with the CTPA 
the United States had the opportunity to "develop an economic and diplomatic front" to counter the anti-democratic, anti-capitalistic governments of Chavez, Correa and Morales. He noted that Chavez recently expropriated two important international banks, signaling an increase in his statist approach. Uribe said Chavez was more worrisome to him than Correa, as Correa lacked petroleum resources and would suffer more from the economic decline associated with anti-international investment policies. Uribe noted that eventually -- perhaps not in the next election, but the following -- Correa would face electoral difficulties due to his economic policies. CONCERN OVER PANAMA -------------- ¶4. (C) Uribe told Hagel he was increasingly concerned over Panama's political future. He said President Martin Torrijos' relationship with the U.S. and international investment was good, but noted that leading members of Torrijos' Democratic Revolutionary Party (PRD),including its likely presidential candidate, would likely hold views adverse to U.S. and Colombian interests. If the USG was not careful with the fate of Panama's Free Trade Agreement, it could face an unfriendly president in Panama, creating a hostile climate for U.S. investment. ENERGY SECTOR REPRESENTATIVES: OUTLOOK GOOD -------------- ¶5. (SBU) Representatives from Exxon-Mobil, Chevron, Occidental Petroleum, and Ecopetrol jointly briefed Senator Hagel and General Spears on the positive state of the hydrocarbons sector in Colombia. All agreed that improved security and pro-investment policies had helped spur a significant increase in investment since 2002. Oxy Colombia President David Stangor praised GOC efforts to improve security and support social programs with the community, but noted that transparency of royalty investment at the municipal and departmental levels remained weak. Exxon-Mobil Government Affairs Director Jose Noguera said his company was optimistic about natural gas exploration, but watchful of potential new regulations that might complicate marketing of gas. Ecopetrol Vice President Alvaro Vargas said his company planned to double exploration and production to 1 million barrels per day by 2015 as well as increase biofuels production to 100,000 tons per year by 2009. Chevron Colombia President David Bantz noted that Chevron had invested $300 million in Colombia since 2005, and grown its gas production 50 percent. All four representatives told Hagel their biggest concern was the continuance of political stability and contract sanctity; they remained confident pro-investment conditions would prevail for the foreseeable future. U.S. COMPANIES: TRADE PROMOTION AGREEMENT KEY -------------- - ¶6. (SBU) In a luncheon with the Board of Directors of the Council of American Enterprises in Colombia (CEA),U.S. company representatives stressed the importance of U.S. Congressional approval of the Colombia Trade Promotion Agreement (CTPA). Hagel described the challenges of achieving passage during the remainder of the current Congress, but expressed optimism that there still existed sufficient time for consideration. The Senator pointed out the various challenges facing the United States around the world and stated that the CTPA was important for the U.S. and Colombia for political, economic, and strategic reasons. He encouraged U.S.-based senior leadership of the major U.S. companies in Colombia to engage their members of Congress and emphasize the importance of the CTPA to their businesses and workers. PROSECUTOR GENERAL: HUMAN RIGHTS PROGRESS -------------- ¶7. (SBU) Prosecutor General Iguaran thanked Hagel and the DCM for the USG's continued support of Colombia's justice system, especially the new accusatory system, and the Justice and Peace and Human Rights Units. Human Rights Unit chief Sandra Castro briefed the delegation on recent convictions in human rights cases. Senator Hagel encouraged Iguaran to accompany President Uribe to Washington to lobby for the passage of the CTPA, and to travel to Washington after U.S. elections to brief officials in the new Administration. Iguaran, responding to a question from General Spears, told the group that information collected from the Raul Reyes computers had been useful in advancing investigations of the FARC. FINANCE MINISTER: SECURITY AND A STRONG ECONOMY -------------- --- ¶8. (SBU) In a private meeting with the delegation, Finance Minister Oscar Zuluaga told Hagel and the DCM that, despite turmoil in world markets, rising inflation and the steep appreciation of the Colombian Peso, the long-term outlook for Colombia's economy was bright. Zuluaga highlighted the improved security situation and economic liberalization under President Uribe as key to Colombia's strong economic performance since 2002. Zuluaga identified the energy and infrastructure sectors as prime investment opportunities. He cited the post-Uribe political outlook as the top risk to the economy, insisting that strong leadership must continue to make economic reforms and security gains permanent. Zuluaga added that the worsening economic situation in Venezuela, Ecuador, and Bolivia could hurt Colombia's export sector. He emphasized that conclusion of the CTPA was critical to promoting investment, increasing competitiveness and achieving investment grade status for Colombian national debt. Senator Hagel reiterated his support for the CTPA and noted the political and economic implications of continued delay. CARTAGENA: DRUGS AND PORT SECURITY -------------- ¶9. (SBU) On August 30, the Ambassador and Hagel delegation visited the Embassy Office in Cartagena, and received DEA and Colombian Navy briefings on drug interdiction efforts and successes in the region. Hagel also visited the Cartagena Seaport, one of eight participating Colombian seaports in the USG-sponsored Port Security Program aimed at deterring and preventing the shipment of illicit narcotics. The Senator received an orientation brief and walk-through of ongoing Colombian National Police anti-narcotics inspections of various international cargo, a tour of the port operations center, and brief on Port security and expansion plans that would more than double the port's capacity. ¶10. (SBU) Cartagena Mayor Judith Pinedo told Hagel, the Ambassador, and delegation that Cartagena was set to take advantage of the CTPA, enhanced security, and tourism in order to tackle the city's poverty problem. She asked for assistance with "crazy" World Bank regulations. Pinedo said Cartagena would only be able to improve the lives of its citizens -- including many displaced as a result of Colombia's armed conflict -- through the benefits of free trade and tourism. Pinedo said Cartagena was trying to expand public transport and plan for infrastructure development (including water and sewer) to support up to a million more residents expected to relocate to the city in coming decades. She lamented "crazy" World Bank regulations that forced the city to accept the lowest bids on contracts on key infrastructure--terms that led companies to game the system, provide poor quality work and later inevitable demands for contract re-negotiation. Hagel asked the mayor for details, and said he would be willing to call Bank President Robert Zoellick to discuss the problems. DEMOBILIZED COMBATANTS -------------- ¶11. (SBU) Senator Hagel's delegation, accompanied by the Ambassador, also visited a USAID-supported service center for demobilized ex-combatants from Colombia's illegal armed groups to learn about the scope, advances and challenges of demobilization and reintegration. The Senator had the opportunity to meet with a group of the center's beneficiaries, including four ex-paramilitaries and one ex-FARC member. The Cartagena service center serves 669 demobilized ex-combatants--621 collectively demobilized and 48 deserters. The Center's director explained that the Centers were established to provide access to health care, formal education, vocational training, income generation opportunities, and psychological assistance to ex-combatants and their families. Senator Hagel told the group that the programs to bring former-combatants back into society were worthy of continued USG support and represented an example for other countries facing post-conflict reintegration problems to follow. NICHOLS