VZCZCXYZ0007
PP RUEHWEB

DE RUEHBO #1539/01 1351402
ZNR UUUUU ZZH
P 151402Z MAY 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 8699
INFO RUEHBR/AMEMBASSY BRASILIA 8865
RUEHCV/AMEMBASSY CARACAS 2187
RUEHLP/AMEMBASSY LA PAZ MAY LIMA 7489
RUEHZP/AMEMBASSY PANAMA 3573
RUEHQT/AMEMBASSY QUITO 8229

UNCLAS BOGOTA 001539 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS MCC FOR MBOHN, SRHODES, SGAULL, MTEJADA 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV PREL OVIP EAID SNAR CO
SUBJECT: SCENESETTER FOR VISIT OF MILLENNIUM CHALLENGE 
CORPORATION TO BOGOTA AND CALI MAY 17-23, 2009 
 
¶1. (SBU) SUMMARY: Your trip to Colombia will allow you the 
opportunity to see the incredible progress Colombia has made 
from a near failed state to an economic, political, and 
social leader in Latin America over the last decade.  Despite 
Colombia's significant progress, USG support remains critical 
to help the GOC confront its persistent challenges, 
particularly narcotics trafficking and the illegal armed 
groups that the drug trade fuels.  Infrastructure, neglected 
for decades, remains a significant brake on Colombia's 
economic growth, and will likely be a focus of GOC interest 
for your visit.  Ports, roads, rivers, energy transmission, 
and telecommunications in many areas are inadequate, 
particularly on the Pacific coast.  The GOC has high 
expectations for your visit, which we must manage very 
carefully.  End Summary. 
 
Economic Growth and Free Trade 
------------------------------ 
 
¶2. (SBU) After several years of strong economic growth, 
Colombia has begun to feel the pinch of the global economic 
crisis.  Growth slowed to 2.5 percent in 2008 after a record 
rate of 7.5 percent in 2007.  Recent growth projections for 
2009 range from -1 to 1 percent.  Reacting to the anticipated 
economic slowdown in 2009, the Government of Colombia (GOC) 
plans to cut the national budget by $1.4 billion.  The cuts 
include defense spending and social programs that are 
critical to addressing many of the catalysts for the civil 
conflict.  The slowing economy and a pyramid scheme scandal 
in 2008 that cost Colombians an estimated $1 billion in 
savings has led to growing popular concern over pocketbook 
issues.  Further economic decline could generate more social 
unrest, strikes and protests in Colombia in the run up to the 
May 2010 national elections. 
 
¶3. (SBU) Colombia remains highly dependent on commodity 
exports (petroleum, coal, flowers, coffee), making it 
vulnerable to price drops.  Colombia cut unemployment and 
poverty during the past six years, but those gains have 
stalled.  The financial sector remains solid -- cushioned to 
date against the global credit crunch by conservative lending 
practices. The GOC inked trade deals with Canada, Chile, 
Central America, and smaller European countries in the last 
few years.  The GOC is now negotiating an agreement with the 
EU.  The U.S.-Colombia Trade Promotion Agreement (CPTA) 
remains a bilateral priority for the Colombian government and 
private sector. 
 
Democratic Security Advances 
---------------------------- 
 
¶4. (SBU) Colombia has achieved successes in its fight against 
the Revolutionary Armed Forces of Colombia (FARC), National 
Liberation Army (ELN) and emerging criminal groups.  The 
rescue of 15 high-profile FARC hostages in July 2008, 
including three Americans, and the deaths of key FARC leaders 
highlight Colombia's progress in security.  Colombian 
security forces captured or killed a number of mid-level FARC 
leaders, and reduced the space in which terrorists can 
operate freely.  A record number of FARC members deserted in 
2008--including mid and high-level commanders.  Total 
demobilizations of illegal armed groups reached 3,461 in 
2008--primarily from the FARC--making it the highest level of 
demobilizations in Colombia's history. 
 
¶5. (SBU) With USG help, in 2008, Colombia again set records 
in eradication and interdiction of drugs, while further 
reducing murder and kidnapping rates.  Colombia extradited a 
record 208 criminals, narcotraffickers and terrorists to the 
United States in 2008, including 15 senior ex-paramilitary 
leaders; Colombia has already extradited more than 20 
criminals in 2009.  The number of homicides fell for the 
sixth consecutive year, dropping to 16,140 (or 33 for every 
100,000 habitants), 45 percent lower than 2002 levels. 
 
Regional Context 
---------------- 
 
¶6. (SBU) Colombia sees itself as a key U.S. ally in an Andean 
region increasingly hostile to U.S. values and goals. 
Ecuador broke diplomatic relations with Colombia after a 
military strike in March 2008 against FARC Commander Raul 
Reyes's camp just across the border in Ecuador.  The GOC 
 
maintains a moderate tone with Ecuadorian President Correa, 
despite his often angry rhetoric.  Ecuador recently imposed 
strict requirements on Colombians wishing to travel to their 
southern neighbor. 
 
¶7. (SBU) Relations with Venezuela are now stable, and have 
improved since Venezuela recalled its ambassador following 
the Reyes attack.  Presidents Uribe and Chavez met in late 
January 2009 in Cartagena and again in April in Caracas, 
announcing several vague economic cooperation agreements. 
However, Colombia remains wary of Venezuelan ties to the 
FARC, as evidenced in the computers found in the Raul Reyes 
camp.  Beyond the Andes, Colombia is helping Mexico to combat 
terrorism, narcotrafficking and other criminal activity. 
Colombia is also working with Mexico, Chile, Peru and Brazil 
to promote economic integration and strengthen democratic 
institutions in Latin America.  Colombia has also offered to 
send engineering and special forces to Afghanistan under NATO 
auspices, and contributes troops to the Multi-National 
Observer Forces in the Sinai. 
 
Serious Challenges Ahead 
------------------------ 
 
¶8. (SBU) Despite advances in security and development, 
challenges related to violence, narcotrafficking, 
displacement, human rights, labor rights, and minority groups 
remain.  We estimate the FARC has some 9000 fighters in the 
field, and organized narcotrafficking groups continue to 
cause violence.  Internal displacement due to the armed 
conflict remains serious, with three million displaced by 
violence since 1995.  Deep historical social divides make it 
difficult for millions from the Afro-Colombian and indigenous 
populations to benefit fully from security and economic 
gains.  These minority groups suffer from limited education, 
health care, infrastructure and employment opportunities, and 
disproportionate forced displacement in the mostly isolated 
rural areas where they reside. 
 
¶9. (U) Through the Center for Coordinated and Integrated 
Action (CCAI), the GOC is recovering territory previously 
held by illegal armed groups and establishing government, 
state services and securing vulnerable communities.  In 2008, 
the GOC reestablished a government presence in all 1098 
municipalities and all the country's mayors once again 
resided within their municipalities.  A coordination plan for 
Macarena--the historic heartland of the FARC--aims to 
establish a permanent military, police and civilian presence 
in post-conflict areas--some of which have never seen a 
viable GOC presence.  Challenges remain, as resource, 
security and staffing shortfalls continue to limit the 
initiative.  The United States, through USAID, MILGRP and 
NAS, provides assistance to CCAI. 
 
Infrastructure and Development 
------------------------------ 
 
¶10. (U) Infrastructure, neglected for decades, remains a 
significant brake on Colombia's economic growth, and will 
likely be a focus of GOC interest for your visit.  Ports, 
roads, rivers, energy transmission, and telecommunications in 
many areas are inadequate.  As a result of the economic 
slowdown, the GOC has postponed some 2009 administrative 
outlays, accelerated infrastructure spending, and sought out 
new trade and investment flows.  GOC officials plan to 
accelerate already-planned infrastructure investment, with 
USD 4.5 billion appropriated for the sector in 2009.  The GOC 
plans major improvements to highways from Bogota to Cali and 
Medellin.  Private investors have bankrolled hundreds of 
millions of dollars of upgrades at ports in Cartagena, Santa 
Marta, and Buenaventura.  However, these projects lack strong 
interconnection with the road and air network, preventing 
them from spurring growth.  Major mass transit projects are 
also up and running or planned for Colombia,s largest 
cities, including a subway system for Bogota.  Conversely, 
Colombia's interior remains sparsely populated and under 
developed.  Less than ten percent of the population lives in 
the vast area east of the Andes and few roads or viable 
regional markets exist in the interior.  Perhaps a third of 
the country enjoys protected status as a national park, 
reserve, or indigenous reservation, making it unsuitable for 
development. 
 
USAID: Aiding Communities At Risk 
--------------------------------- 
 
¶11. (U) Under Plan Colombia, the USG has provided more than 
$950 million in economic and social assistance via USAID. 
USAID's initiatives have delivered legal jobs, social 
services, and development in narcotrafficking and conflict 
zones.  We are helping to reintegrate thousands of Colombians 
who have demobilized, abate child recruitment into armed 
groups, and increase social services for victims of conflict. 
 We are striving to restore citizen confidence in governance, 
improving the criminal justice system and institutions, 
increasing the poor's access to justice, and promoting human 
rights through investigation and prosecution of human rights 
and labor-related cases.  These programs focus on communities 
at high-risk of violence, provide legal and psycho-social 
assistance, and strengthen key Government oversight and 
judicial institutions. 
 
¶12. (U) USAID's alternative development program is a key 
component of our counter-narcotics efforts.  It promotes 
sustainable economic opportunities in regions vulnerable to 
drug production and conflict.  These programs create jobs and 
economic opportunities in areas recently retaken from illegal 
armed groups and build the social infrastructure to mitigate 
future conflict.  USAID is expanding social and economic 
opportunities and improving livelihoods for Afro-Colombians 
and indigenous communities disproportionately affected by 
conflict.  These programs provide jobs, education, health 
care housing, and social services for these vulnerable 
populations. 
 
DOJ: Providing Justice Reform 
----------------------------- 
 
¶13. (U) The Department of Justice (DOJ) coordinates a 
multifaceted program focused on strengthening the Colombian 
criminal justice system, its institutions, processes and 
personnel.  This program involves six major areas: 
implementation of an accusatory system; human rights 
investigations and prosecutions; Justice and Peace 
investigations and prosecutions; complex areas of criminal 
law; improved forensics capability; and witness protection. 
The bulk of the assistance is provided through training and 
technical assistance to the Prosecutor General's Office. 
 
NAS: Eradicating, Training, Nationalizing 
----------------------------------------- 
 
¶14. (U) We made real strides in battling narcoterrorism in 
Colombia in 2008.  The most recent U.S. figures for cocaine 
production in Colombia show a 24 percent reduction in 
production since the peak year 2001.  In 2008, Colombian 
security forces seized 245 metric tons of cocaine and coca 
paste, eradicated 230,000 hectares of coca and destroyed 3667 
drug labs.  We kept hundreds of metric tons out of the United 
States.  We have reduced the funds available to the FARC and 
other criminal groups for the purchase of weapons and 
explosives, corruption of public officials, and coercion of 
local populations. 
 
New Initiatives 
--------------- 
 
¶15. (SBU) We are working with the GOC, other governments, and 
international organizations to develop an initiative to 
consolidate the gains made to date in key conflict areas. 
The initiative builds on current and past USG and GOC 
programs, and involves close coordination of security, 
eradication, alternative development, energy, and 
institutional development programs.  The initiative's primary 
goal is to provide incentives for Colombian citizens to join 
the licit economy in the conflict zones plagued by coca 
cultivation, narcotrafficking and illegal armed groups. 
These targeted regions produce roughly 80 percent of the coca 
in Colombia and serve as major trafficking hubs, with a high 
incidence of violence and displacement. 
Nichols