Dec. 3 (Bloomberg) -- Colombia will seek to contain a four- decade-long war against armed rebels to an ``acceptable'' level by 2007, ensuring safer travel and helping bolster the economy, Defense Minister Jorge Alberto Uribe said.

``There's no doubt we are winning this war,'' Uribe said in an interview at the Defense Ministry in Bogota. ``It's not possible to erase the security problem, but it's possible to bring it to levels where you can travel at ease.'' Colombians, for instance, would be able to make the 10-hour drive without risk between Bogota and Cali and most other cities, he said.

President Alvaro Uribe reduced kidnappings by 36 percent since taking office in August 2002 by increasing the number of troops fighting guerrilla revolutionaries. Colombia reported 2,200 kidnappings last year, the most in the world.

Colombia next year will deploy another 1,000 soldiers to patrol mountain passes, increase fast-attack brigades and recruit more informants, the defense minister said.

The plans require more money and time than the government may be prepared to give, said Myles Frechette, a former U.S. ambassador to Colombia. Making the country as safe as many other nations in Latin America may take 20 years, and the $7.5 billion international financing program to fight drug funding of the war probably isn't enough, he said.

Minister Uribe, 64, said Colombia's government is unlikely to increase spending on the war beyond 6 percent of the nation's $91 billion gross domestic product, from 5.4 percent now.

`Still Grim'

``Colombia is still not spending what it should be,'' said Frechette, 68, who served as ambassador between 1994 and 1997 and now works as a consultant on trade for Latin America and Africa in Washington. ``Colombians in the cities have a much better quality of life now, but for most the situation is still grim and will remain grim for decades.''

President Uribe, 52, whose father was killed in a botched kidnap attempt by the Revolutionary Armed Forces of Colombia guerrilla group, known as the FARC, made improving security part of his campaign for president in 2002. This week Uribe won congressional approval to seek a second four-year term, pending a ruling from the constitutional court. The president said in an April interview the constitutional change is needed to ensure he has sufficient time to quell violence in the country.

``We need peace, because if we don't get peace then we will keep on lagging further and further back from the development of the rest of the world,'' Minister Uribe, who isn't related to the president, said in the Nov. 25 interview at the ministry, which is guarded by soldiers at two check points.

Economic Growth

Colombia forecasts the economy will grow about 4 percent this year, the fastest pace in a decade, as the government crackdown on rebels helps boost investment and consumer confidence. Foreign investment rose 65 percent in the second quarter from a year ago.

The nation's stock index is the second-best performer in the world among 60 tracked by Bloomberg after doubling in dollar terms. The peso has climbed 11.5 percent against the dollar, the sixth-biggest gain among 60 currencies tracked by Bloomberg.

``Uribe has broken the backs of the insurgents; his strategy is working,'' said Bernard Aronson, a former assistant secretary of state for Latin America under President George H.W. Bush and now managing partner of Acon Investments in Washington, with about $225 million in Latin American assets under management. ``That's why it's so important that he is reelected.''

Peasants

The FARC was founded in 1964 by peasants who had fought against governments in the 1950s following the assassination of presidential candidate Jorge Gaitan, who had pledged to improve social conditions for the rural and urban poor. As Colombia's drug trade took off in the early 1980s, the guerrillas began offering protection to and taxing growers of coca, the raw material for cocaine.

Colombia is the world's top cocaine producer and the source of about 90 percent of the cocaine that enters the U.S., said Alfredo Rangel, executive director of the Bogota-based security and foreign affairs research firm Fundacion Seguridad y Democracia.

The FARC also raised money by extorting and kidnapping business owners -- as well as drug traffickers -- who created their own private militias to defend themselves. In 1997 the militias formed a coalition called the United Self Defense Forces of Colombia to fight the guerrillas.

``There's so much drug money in the hands of the guerrillas and the paramilitaries that the government simply can't have success without U.S. aid and a lot of time,'' said Michael Shifter, a vice president of the Inter-American Dialogue, a research firm specializing in Latin American affairs, in Washington.

Extortion, Kidnapping

Since taking office in August 2002, Uribe has set up a network of 2 million civilian informants, paid farmers to not grow drugs on their land, boosted highway patrols and stepped up offensives against illegal armed bandits.

His efforts have led to a 36 percent reduction in kidnappings between August 2002 and October this year to 4,544, compared with the previous two years, according to the Defense Ministry. Homicides fell 18 percent in the same period, while the drug crop output fell for a fourth-straight year in 2004, helped by U.S.-backed fumigation programs.

Of the approximately 40,000 guerrillas and paramilitaries in Colombia, 7,000 have handed in their weapons and another 14,000 paramilitaries are expected to rejoin society by 2006, the Defense Ministry said.

The government plans to deploy another 1,000 troops to patrol high mountain passes, which guerrillas use to move about the country, and boost the number of fast-attack brigades able to swoop into trouble zones to carry out offensives with an additional 3,600 troops, Minister Uribe said.

Bush

It also will recruit home-guard soldiers for another 158 counties and add urban anti-terrorist units and more informants to its pool of 2 million to head off kidnappings and assaults on towns, he said.

``The world as a whole will have to solve the drug problem sooner or later -- we all have to face it,'' Uribe said. ``Colombia for geographical reasons, for historical reasons, destiny, has ended up having to carry the heavier part of the stick.''

U.S. President George W. Bush, during a visit to Colombia last week, said he'd ask Congress to extend aid to the country, the third-largest recipient of U.S. assistance after Israel and Egypt, to fight drug-funded terrorism and help the war effort.

After the visit, media reports cited the defense minister as saying the FARC had a plan to assassinate Bush during his trip to Cartagena, Colombia. Defense Ministry spokeswoman Daissy Canon said in an interview the comments were taken out of context, and the guerrilla group yesterday denied in a statement any such plan.

Education, Jobs

The U.S. spent about $680 million this year to help Colombia fight insurgents and has earmarked about $660 million for next year. That would be in addition to the 9.7 trillion pesos ($3.8 billion) the Colombian government has budgeted for next year on defense.

``I wish we had some more money, but we just don't and won't,'' said Minister Uribe, an economist trained at George Washington University in Washington, D.C., from the head of a 25- foot meeting table flanked by military and police flags. ``We are working with what we have. We have to use the resources more effectively.''

Uribe, who relaxes by building model ships and listening to violin music, said the government needs to create education and job programs that would encourage guerrillas, militia and drug producers to seek a legal way of life.

To end the war, the government must first find ways of incorporating into the workplace about 40,000 guerrillas and militia or crime will surge, he said. Many of the 700,000 police, armed forces and private security workers also would need to be re-employed, Uribe said.

``If we succeed in fighting this war and there is no alternative for those without jobs, we would be pulled back into another cycle of war, or at least turmoil,'' he said.

To contact the reporter on this story: Helen Murphy in Bogota at Ext. 224 or hmurphy1@bloomberg.net

Last Updated: December 3, 2004 00:04 EST