Colombia's Progress -- and a Plea

President Alvaro Uribe discusses his country's revitalized economy, drug-war victories, and why he needs Washington's help

As Colombia's President Alvaro Uribe nears the end of his four-year term, he can boast of several achievements. The security situation has improved dramatically under his watch. The economy is humming, with growth slated to come in at around 3.7% this year, and the Bogotá stock exchange is one of the world's best performing, up 56% year to date.


  Uribe therefore stands a good chance of reelection to a second term in balloting scheduled for May, 2006. His country's Congress has already amended the constitution to permit reelection, and the Constitutional Court is expected to rule on the matter in the next few weeks.

Now Uribe is lobbying U.S. Congress and the White House for the renewal of Plan Colombia, a $3-billion development and drug-eradication program approved under President Bill Clinton.

With the continuing costs of the war in Iraq and the huge reconstruction tab in the wake of Hurricane Katrina, the U.S. may not feel so generous this time around. But Colombia's President can at least expect to get a fair hearing in Washington. Uribe counts as one of America's closest allies in Latin America, a part of the world where the Bush Administration has few friends these days.

On Sept. 16, during a visit to New York City for the U.N. General Assembly, Uribe took time out to meet with BusinessWeek's Christopher Power, Michael Serrill, Rose Brady, and Cristina Lindblad. The following are edited excerpts from their conversation.

The economy is doing well, the stock market is hot, and the security situation has improved markedly. You are running for reelection from a position of strength. What will be your main priorities in your second term?

We still have many problems. The trends are positive, but the results are not satisfactory yet.

We still have a high rate of unemployment. It was 11.6% last month, although it has been coming down. Fifty-two percent of Colombians still live in poverty. So the job to be done is far from over.

I don't want to speak about reelection, because although Congress approved the constitutional amendment [to allow reelection], this is still under consideration by the Constitutional Court. Since the court will make its final decision by the end of September or the first two weeks of October, I consider it not prudent for me to talk about reelection.

There was once talk that Colombia would become a net importer of oil, because it had failed to invest enough in exploration. Have the world's oil majors responded favorably to changes in the investment regime?

The response has been very positive. At the start of my administration, in 2002, Colombia had only 10 exploration contracts. This year we have 40.

But it's not enough -- 87% of our territory is still unexplored. But with the arrival of these new investments, we are hoping that we will find new oil reserves. This year, we have been able to decrease the rate of decline of production at Ecopetrol [the state-run oil company]. Ecopetrol's production actually increased a little bit. But we need to find new reserves

What other measures have you taken to encourage foreign investment?

We have introduced a law that gives the government the right to negotiate directly with companies [regarding] agreements on stable [tax and investment] rules. When I was a presidential candidate, many people came to see me and said, "It is very important that Colombia introduce laws to guarantee the stability of investments." This is a very important law.

Can you give us more specifics on what you've done to improve the security situation?

When my government took office in 2002, we had 3,050 cases of kidnapping a year. This year, we are under 400. In homicides, the first year we had a reduction of 19%, the second year a reduction of 15%, and this year we are down 18%.

When my administration began, Colombia had 500 mayors out 1,096 who could not attend to their daily duties in their towns because of threats by insurgents. Now all Colombia mayors can tend to their duties.

How did you achieve these results?

More police, more prosecutions, more social investment -- and political will. You need a democratic concept of security. That means security for all Colombians, whether they support or oppose the government.

Under my administration, we have enlarged all the security forces by a number close to 100,000. There are 600 municipalities being served under the so-called soldier-of-my-town program -- soldiers who serve out their military conscription in their own communities. These soldiers feel more committed to protecting their towns.

Still, there's more to do. When I meet with mayors, everyone says, "Mr. President, we need more police, more soldiers, and more social investment." People now understand that security and social investment go hand in hand.

Are you making headway in your battle against the illicit drug trade?

At the beginning of Plan Colombia, Colombia had 160,000 hectares [395,200 acres] of coca under cultivation. In 2004, according to a U.N. report, we closed the year with 80,000 hectares.

This year we have increased aerial spraying by 30%, and we have introduced manual eradication. At first I didn't believe in the manual eradication, but this year we will eradicate 30,000 hectares by hand.

In my administration, I have issued 368 extradition orders [for people involved in the drug trade]. We are also working to provide coca growers with other means of livelihood -- palm oil, rubber, cocoa, etc.

We need to continue this task. That's why we are asking for [U.S. support for] the second phase of Plan Colombia, which we call the consolidating phase.

All of this costs money, and right now you are running a large central government deficit.

This year we'll have a central government deficit equal to 2% [of GDP]. We have restructured 252 state agencies, including the state-run telecommunications company, which used to lose $200 million a year. Last year, it registered a profit.

We have increased the income-tax base, from 400,000 [taxpayers] to 1 million. We have become more effective at controlling evasion. I am confident that the economy will continue to improve, and we will solve the problem of the fiscal deficit.

Your relations with Venezuelan President Hugo Chávez have sometimes been strained. How are the two of you getting along?

Everyone here in the U.S. asks me about Hugo Chávez. I say, "Ask him, not me." Colombia has to have good relationships with all its neighbors. Our bilateral trade with Venezuela will be worth $3 billion this year, and we share a very lengthy border. Therefore we have to be very careful to handle the relationship with our neighbor.

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