Uribe's Democratic policy

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UNIVERSIT CATTOLICA DEL SACRO CUORE

FACOLT DI ECONOMIA (SEDE DI PIACENZA)

Programma Internazionale di Doppia Laurea con Universidad deLa SabanaCorso di Laurea Magistrale in Gestione dAzienda

Uribes Democratic Security Policy the new phase of Colombias

economic recovery.

Relatore:Chiar.mo Prof. Francesco Timpano

Tesi di Laurea di:

Daniela Quintero Camelomatr. n: 4009145

anno accademico 2011 / 2012


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Abstract

Colombia has been a country with many problems along the years some of

them are corruption, guerrilla and drug trafficking that have been part of its

economic failure. Within this thesis it will be described the factors that have

affected Colombias economy, the crisis and political governments of three

presidents since 1998 to 2011. It will also be analyzed how the democratic

security policy from the ex president Uribe helped Colombia to a economic

recovery and which are the problems that still face the country.


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Thanks

This thesis is an effort in which, directly or indirectly, involves several people

reading, correcting, giving encouragement and accompanied at all times.

First, I want to thank God for all the good things I have lived all this year, my

Mom for giving me the opportunity of being here and for all her support and

encouragement. And finally, Professor Francesco Timpano for being my

tutor.


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INDEX

INTRODUCTION

1. CHAPTER 1: PROBLEM

1.1. Defining the problem

1.2. Objectives

1.2.1. General Objectives

1.2.2. Specific Objectives

1.3. Hypothesis

2. CHAPTER 2: BACKGROUND TO THE CRISIS OF GOVERNANCEAND SECURITY IN COLOMBIA

2.1. The guerrillas and groups outside the law

2.1.1. The Revolutionary Armed Forces of Colombia (FARC)

2.1.2. Army of National Liberation or ELN

2.1.3. 19 Movement or M-19

2.1.4. Paramilitarism

2.2. Causes and effects of the crisis2.3. Drug trafficking (Marihuana and Cocaine)

2.3.1. Drug Cartels

2.3.1.1. Medelln Cartel

2.3.1.2. Cali Cartel

2.3.1.3. Norte del Valle Cartel

2.3.1.4. Coast Cartel

2.4. Corruption3. CHAPTER 3: CRISIS OF THE ECONOMIC GROWTH (1995-2000)

3.1. Nineties period

3.2. Colombias recession

4. CHAPTER 4: PRESIDENCY OF ANDRES PASTRANA

4.1. Plan of Government

4.2. The peace process

4.2.1. Zona de Despeje

4.2.2. La silla vacia (Empty Chair)


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4.2.3. Results

4.3. Plan Colombia

4.3.1. Development

4.3.2. Financing

4.3.3. War against drugs

4.3.4. Results

4.4. Pastranas Economic Indicators

5. CHAPTER 5: PRESIDENCY OF ALVARO URIBE

5.1. Governance

5.2. Democratic Security Police

5.2.2. Results

5.2.2.1. First years of presidency

5.2.2.2. GDP rate

5.2.2.3. Unemployment rate

5.3. Building up the security and national control

5.4. Operations against insurgent illegal groups

5.4.1. FARC

5.4.2. ELN

5.5. Foreign Direct Inversion (FDI)

5.6. Poverty

5.7. Corruption

5.8. Public Administration

6. CHAPTER 6: NEW PRESIDENCY OF JUAN MANUEL SANTOS

6.1. Presidency

6.2. Economy

7. CONCLUSIONS8. BIBLIOGRAPHY


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INTRODUCTION

During 1990 2000 period, Colombia experienced a phase of terror by

insurgent groups, who were guardians of the countryside and the country's

roads, projecting fear, mistrust and uncertainty in the Colombian population.

By the other hand the crisis of 1998 and the policies of President Andres

Pastrana led to negotiations with the FARC, which he only succeeded in

magnifying the power of the armed group by giving part of Colombian territory

contributing to further deterioration in the macro and micro economic agents

in the country.

It is very important to mention that the process undertaken by the government

to fight these armed groups was not effective, which was evidenced in the

2001 elections, when Colombias population chose Alvaro Uribe as the new

president. In his program of presidency he offered a radical fight to the

insurgency and the recovery of the safety of the population in an environment

of economic growth.

Shortly after the new government formed, control started to be evidenced

primary in the road network and the recovery of the territory granted by the ex

president Andres Pastrana to the insurgency (El Caguan), this became the

end ofthe famous pesca milagorsa which was a form of gaining money by

making roadblocks to kidnap people and then ask for ransoms.

By the other hand, there were imminent offensives to the FARC first thekilling of the blocks insurgent leaders and second a massive eradication of

illicit crops, this caused the deterioration of the finances of the group outside

the law.

These advances in safety, made the expectations of employers and

consumers improve, achieving a substantial increase in investment, leading

to a reduction of unemployment, and an increase of the incomes and


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consumption of the country, which has resulted in growth rates of 4.8%

(average) over the past 5 years.

It highlights that over the years, the government has kept interest rates in a

low level, creating an opening of household consumption, passing from a

negative variation of 5% to a positive variation of 6% in 2008, which can be

attributed to the confidence generated by the good economic performance

and the increase of credits acquired by Colombian families.

Nowadays, Colombia's economy is a leading emerging economy in the

international arena; it has been able to attract foreign investment into the

country in the past few years. Colombia has increased the investment 250%

since 2000. It is the fourth largest economy in Latin America, after Brazil,

Mexico and Argentina and sixth in the American continent. In the international

classification is within the 30 largest in the world.


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CHAPTER 1

PROBLEM

1.1. Defining the Problem

The Colombian territory has been immersed in an atmosphere of war

and social injustice, which has harmed the farmers and the poorest

population, who work the land and were the ones that provide the

country with the basic products such as food crops that werecultivated in the most affected areas of the country.

With the mandate of Andres Pastrana (1997 - 2001), the priority was

the negotiations with the FARC, seeking peace talks with these

groups outside the law, and making arrangements so they will stop

attacking civilians. Pastrana ceded too much to these insurgent

groups, including part of Colombian territory, where they were the law.Within this, they didnt respect the peace agreements and instead

they used the space provided by the government to commit even

more crimes and be able to hide in that territory without any problems,

because there was no presence of any Colombian authority.

This situation of war, lead to a force displacement of people from rural

areas to big cities, this population was the one who cultivated theland, thereby this caused an imbalance in the economy. In addition, it

was the 1998 crisis which evidenced a marked deterioration in the

Colombian economic indicators, due to high interest rates and tight

monetary policy of the Bank of the Republic, this lead to a busting in

the economy and industry causing a hence in the economic and

finance stability of the people. Within these, it was very visible and

evident the financial situation of the population, the cities were full of

displaced people from the countryside, there was a high rate of


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unemployment (19.4% - 1999), a negative economic growth rates (-

4.2% - 1999) and little chance of recovering the country's economy

because of its image of insecurity and fear that was transmitted to the

world.

However with the right mandate it began a process of economic

recovery and security confidence that generated an increase in the

foreign investment, creating employment in the country and therefore

increasing the income and consumption. But most important,

Colombians could return to their roads and territories, which they were

displaced because of the serious security problems evidenced in the

past years.

1.2. Objectives

1.2.1. General Objective

To know in detail the economic, political and social situation in

Colombia to define clearly the pros and cons of the government

policy in Uribes mandate and how is the situation nowadays

with president Santos.

1.2.2. Specific Objectives

Collect relevant information from government publications,

newspapers, journals, reports, forums and reviews of Uribes

mandate.

Identify Pros and Cons of government policy managed until

this date.

Identify weaknesses, opportunities, strengths and debilities of

the Colombian economy as a guarantor of improving the

quality of life of Colombians.

Make conclusions to refute or affirm the hypotheses.


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1.3. HYPOTHESIS

1. Was the democratic security strategy of president Alvaro Uribe the

key factor of his mandate?

2. Where his policies sustainable over time?

3. Can it be maintained the confidence generated in the foreign

investment?

4. Can the new president maintain Colombias economy and foreign

trust?


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CHAPTER 2

BACKGROUND TO THE CRISIS OF GOVERNANCE AND SECURITY

IN COLOMBIA

2.1. The Guerrillas and groups outside the Law

2.1.1. The Revolutionary Armed Forces of Colombia (FARC)

Las Fuerzas Revolucionarias de Colombia (Revolutionary Armedforces of Colombia) or more commonly known as FARC started

their activities as a movement in 1966. The founding of this

organization was the source of a series of transformations from

groups that had appeared as a consequence of social fights

between popular and bourgeois sectors and the neglect and

violation of the peasant rights by the state. This was a clear

motive for the insurgence group to fight and make justice.

The communist ideology by Karl Marx and Friedrich Engels began

to spread and reached Latin America. Colombia was a key country

to accept this idea because it possessed qualities that matched

perfectly with the communist philosophy; one of them was the anti-

American sentiment that had arisen due the independence of

Panama in 1903 by the U.S.A. motivation. Another conditions thathelped the spread of this ideology were social inequality, poverty

and corruption.

In 1948, the murdering of the presidential candidate Jorge Elicer

Gaitn unleashed the biggest violent wave in the history of

Colombia. This violence was extended in all the territory; the

massacres generated by the parties were multiplied. Communists

groups, forced army and traditional parties (liberals, conservatives)


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were participants in one of the most violent stages in Colombia. As

a consequence, it was created clandestine groups from the same

parties that assaulted anyone that didnt think equal.

In those groups it existed a liberal guerrilla; a young liberal boy

became part of this organization, his name Pedro Antonio Marin

better known as Manuel Marulanda Velez alias Tirofijo. He will

become one of the principals heads of this organization later on.

The liberal guerrillas split in two: the clean liberals and the

common liberals (communist ideology). The clean liberals resigned

their arms when Gustavo Rojas Pinilla (the only military president)

guarantees to give them amnesty in 1953. The common liberals

and their leaders decided to continue the fight and moved to

various parts of the country such as Antioquia, Cordoba,

Cundinamarca and Tolima. Years later some leaders were

captured or shot down while Tirofijo planed and develop his

ambushes, assaults and kidnappings. In 1964, Manuel Marulanda

helped establish the remote Communist republic of Marquetalia.

When the Colombian military launched an attack against

Marquetalia the guerrillas scattered, but would soon regroup. Two

years later, in 1966, the Communist guerrillas had reformed.

Tirofijo, was widely respected for his leadership in earlier battles

against the Colombian army so he was made Chief of Staff of the

newly named and reorganized Revolutionary Armed Forces of

Colombia.

FARC did not rise quickly. They launched opportunistic strikes on

military units in order to obtain weapons and supplies. They began

taking hostages for political leverage and assassinating any

opponents or informers who came within their reach. In the 1980s

a new source of power presented itself, cocaine was a way to

obtain money and international connections. Many FARC unitsbegan to work as efficient cocaine producers and smugglers.


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Since then, the FARC has been on a steady growth in the number

of rows, fronts, territorial extension, the businesses, military and

political strategy. Today is the oldest and largest guerrilla group in

Colombia and the world. Due their actions they have became

protagonist of the most important chapters of Colombian history.

Today, the ideological and socio-political motivation found in the

early days of the FARC may have been tainted, but they remain a

potent force.

2.1.2. Army of National Liberation or ELN

The Ejercito Liberal Nacional (Army of National Liberation), or

commonly known as ELN, was inspired in the Cuban revolution of

1959 and has Marxist ideals. Six Colombian students that received

scholarship from Fidel Castros government traveled to Cuba

forming the brigade Jos Antonio Galn. Its leader was Fabio

Vsquez Castao.

The ELN's ideology contains elements such as the use of armed

conflict to expose and promote the solution of the social needs of

the population by national and international governments, as well

as pointing out other flaws and inequities within a democracy that

they dont considered as one.

In 1964 the ELN started as guerrilla in Colombia, headed by Marco,

Antonio and Fabio Vsquez Castao, in that moment there where18 combatants. In 1965, the insurgent group attacked the town of

Simacota, Santander, there they presented a manifest in which

they explained the reasons of their armed fight.

Various priests joined the group, some of the where Spanish. They

where inspired in the Liberty theory, among them where Camilo

Torres, Aurentino Rueda, Domingo Lan, Jos Antonio Jimnez,Diego Cristbal Uribe, Bernardo Lpez Arroyave y Manuel Prez.


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In 1973 the armed forces made Operation Anor in which the ELN

was practically disjointed. Fabio Vsquez was a refugee in Cuba

and was destitute of his charge, his brothers Marco and Antonio,

died in combat. After 10 years it started the reconstruction of the

organization with the reunion of National Heroes and Martyrs of

Anor and tow years later it was established the new organizational

structure, its leader was a Spanish priest called Manuel Prez.

The ELN has 48 fronts and 7 companies that are present in the 22

departments and that historically is the epicenter of their activities.

Peace talks between Bogota and the ELN started in 1999 and

continued through 2001 until Bogot broke them off. The

negotiations were resumed in Havana, Cuba, by the ends of 2001.

ELN had different activities such as kidnapping, hijacking, bombing,

extortion, and guerrilla war. They annually made hundreds of

kidnappings for ransom, especially foreign employers of large

corporations, mostly petroleum industry.

Their major attacks were to the energy infrastructure; they have

damaged pipelines and the electric distribution network. ELN has

an estimated of 3,000 to 5,000 armed combatants and unknown

supporters. They are located in rural zones and mountain areas

such as the north, northeast and southwest of Colombia. They also

are in border regions of Venezuela. Cuba being their allied

provides ELN fighters medical cares and offers politicalconsultation to its leadership.

2.1.3. 19 Movement or M-19

M-19 was created in 1970 as a result of an alleged election fraud.

It was created as rebel group and political movement but later on

then it became an armed movement.


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Jaime Bateman an ex-military from the FARC, Carlos Toledo Plata

representative of the social movement ANAPO and other

conformed the M-19; since the beginning they made notable

activities that were notorious such as the robbery of the swords of

Simn Bolvar when they invade the Quinta de Bolivar in 1974,

they proclaimed this action as Bolivar, your sword comes back to

the fight1.

Their objective was to combine weapons with politics. They didnt

want to the isolated in the rural areas such as the FARC and the

ELN. They didnt use the Marxism-Leninism and Cuban revolution,

they adapted a national and singular posture.

During the government of Julio Csar Turbay (1978-1982) they

built a tunnel that reached a military garrison known as Cantn

Norte in Usaqun. In 1978 they robbed 4,076 weapons of the

National Army.

In 1980, there was a celebration in the embassy of Dominican

Republic in Bogot. A squad of 16 armed men in command of

Rosemberg Pabn alias Commandant One entered the embassy

and took as hostages all the persons that were there including 17

ambassadors. For their recue they asked for 50 million dollars and

the liberation of more than 30 of their people. The take over lasted

60 days and it was solved by a negotiation between government

and M-19.

In November 6 1985, the M-19 sends 35 of their men in control of

Andrs Almarales, to take by the force the Justice Palace

captivating hostages and claiming to take to court the President.

This caused an immediately reaction from the army causing an

armed combat, in which mostly of the guerrilla members were

1Historia del M-19. Caracol Radio. November 19, 2005http://www.caracol.com.co/noticias/historia-del-m19/20051102/nota/217510.aspx


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taken down. There were other 53 persons who died that day,

including ministers of the Supreme Court.

By this time it was made the Coordinadora Nacional Guerrillera

(CNG), years after they restructures and formed Coordinadora

Guerrillera Simn Bolvar (CGSB) in association with the FARC,

ELN and EPL. Their purpose was to present a united group to the

peace negotiations made with the government and also to make

joint military actions.

After being involved in a peace process in the Virgilio Barco

Vargass government (1986-1990), the M-19 gave up their

weapons in their camp, they demobilized and became a political

group that was known as Democratic Alliance M-19. The M-19 do

not exist formally as a military or political movement, however,

many of their old members make part of the left coalition known as

Independent Democratic Pole.

2.1.4. Paramilitarism

Paramilitarism was a response to the guerrillas mobilization.

Colombian state developed a strategy promoted by civil defense

laws and decrees in 1978, this contained the fundaments for

combating the guerrilla groups by a national defense, which was

conformed by landowners and drug traffickers. Even though itstarted as a good process, paramilitaries used this as strength to

become powerful.

When the government realized that this trend was becoming illicit

they outlawed self-defense forces in 1987, but this failed because

of the growing influence of the paramilitaries. In 1997 Carlos

Castao, a former Medelln cartel operative, announced the

formation of the United Self Defense Forces of Colombia (AUC) in


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an attempt to bring central coordination to paramilitary activities

nationwide. This movements increased rapidly and strength during

the1990s. There were around 2,000 full-time paramilitary fighters

in 1989 and around 8,000 to 10,000 by the end of the decade.

Many of the worst human rights abuses of that time were

committed by the paramilitaries. This group gained money by drug

trafficking, stealing state resources and extortion of legitimate

businesses.

2.2. Causes and Effects of the Crisis

Colombia like many states had became weaker due internal problems,

such as corruption, drug trafficking, exclusionary political system,

economic crisis and the high levels of social and economic inequality.

Like many developing countries, the problem of national security in

Colombia is primarily an internal problem. This chapter will board the

source of the crisis and give a general explanation of how insurgent

groups, drug trafficking and corruption affected security in Colombia.

Colombias history has long been marked by violence, since 1899 wars

between liberals and conservative parties have left many scars that

affected social and political aspects. This violence was driven by many

factors: political loyalties and rivalries, control of land and economic

resources, clashes over the role of religion, and personal vendettas.

Colombian authority in rural area was minimum and governments didntpay much attention to it because they were fighting over power control.

This lack of authority caused the insurgence of two rebel movements,

the Revolutionary Armed Forces of Colombia or FARC that has been

the largest and most successful group and Army of National Liberation

or ELN inspired in Cuba and founded on principles of liberation.

After years of sustained economic growth and positive trends in

reducing inequality and social exclusion during the 1960s and 1970s,


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Colombia entered into a period of slow economic growth during the

1980s. The combination of the parallel rise of the illegal narcotics

economy and the growing power of the insurgencies and drug cartels

began to make pressure in the Colombias weak institutions of

governance.

During the 1980s, the variable of drug trafficking began to exert an

increasingly large influence over national security in Colombia. Newborn

drug cartels started to be a challenge to the legitimate state authority

across the country and frontiers. The emergence of the cartels raised a

parallel growth in paramilitary organizations. A new insurgent group the

M-19 started to be a threat to Colombian government. Attacks against

the government were started; the most notorious one was the violent

takeover of the Supreme Court in Bogot in 1985. Violence and criminal

behavior related to the production and drug trafficking threaten the state

institutions and the legal economy. The mixture of armed insurgency

and drug trafficking becomes a direct challenge to the state and causes

damages to the internal stability. By the late 1980s, Colombia was in a

vicious cycle of violence, the cartels persistent fight with the

government, the guerrillas and paramilitary fighting over the control of

the national territory and the increasingly routes of drugs, and the

Colombian armed forces trying to recuperate control of the country.

The 1990s werent so different; its accelerated deterioration was

caused by many factors. Even though Colombia received help from

United States and could break some cartels, their illegal business wascarried on by a series of decentralized criminal gangs. Colombia

evolved from a processing and transshipment point for cocaine to the

worlds largest producer of coca leaf. Coca cultivation rose dramatically,

from some 51,000 hectares in 1995 to more than 101,000 in 1998 and

then to 122,000 in 1999, according to U.S. government estimates at the

time. The explosion of the drug business in Colombia had the effect of

further weakening legitimate state authority while supercharging theinsurgents, paramilitaries, and drug gangs.


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The constitution of 1991 gave new life and strength to the political

process and improved the public access to the justice systems, but it

also fell into the hands of the paramilitaries and insurgents by providing

them large amounts of fiscal resources where the state had little or no

authority, this funds were captures by the illegal armed groups. The

FARC and the ELN took advantage of periodic peace offers and cease-

fires to consolidate their strength but in the end reached no deal with the

government.

The breaking point of deterioration was during the presidency of Ernesto

Samper (1994-1998). Its legitimacy and effectiveness was damaged

since the beginning of his administration due to the contributions of the

narcos in his campaign. This caused a rupture in the relationship with

the United States causing the stop of their aiding. This was the perfect

opportunity for the insurgence to make a strike to the government. The

FARC opened new attacks to reclaim more territory and expand their

operations through all the national territory and facilitate the movement

of drugs and weapons.

The FARC began to invade the Colombian army and police by capturing

police stations and military bases. In 1996, the FARC made a surprise

attack and took over the Colombian military base at las Delicias

(Putumayo), killing and capturing more than 100 soldiers. Attacks from

the FARC were intensifying in 1997 and 1998, which showed a capable

army that could unbalance the political, social and economical aspectsof the country.

The low presence of the government in many parts of the country

helped the armed groups to take control of rural areas, making even

harder the situation of Colombia. In 1995, 58% of Colombias

municipalities contained a guerrilla presence, compared with the 17%

ten years earlier. At the same time a quarter of the municipalities did nothave presence of police. In many rural areas or small towns the


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The use of cocaine leaf, marihuana and other plants, had been part of

the life style of many indigenous in South America, but the world drug

demand during the decades of 1940 and 1970 increased the production

in Colombia. In that period of time Colombia had emerged as a major

supplier to the United States. By the end of that decade 70% of the

marihuana reached United States coast. In the 1980s, Colombia was

catalogued as the major narcotics trafficker center. Between 30,000 and

50,000 small farmers along Colombias Caribbean coast became

dependent of marihuana cultivation for their livelihood. Also around

50,000 Colombians made a living from it.

This was an important source of wealth to the Caribbean coast, its

population was generating income, comforts and economic stability from

its production and distribution. The port cities of Barranquilla, Santa

Marta and Riohacha, experiences prosperity, meanwhile the Guajira

was in a dramatic upsurge in drug related violence, police disintegration

and their judicial institutions were falling apart because the corruption an

bribery. The food production was declining because the thousand

hectares were converted to marihuana cultivation. Many legitimate

businesses such as banks, hotels, restaurants, airlines and casinos

were bought by narcotraficantes or Mafiosos and were used for

laundering illicit profits.

After that Colombia implemented prohibition laws to suffocate the

negative effects of drugs to the society and also to punish the agents

that cultivate, posses, commercialize and distribute them. But eventhough their efforts to retain this illegal production, many factors helped

the increase of these cultivations such as the increasing demand, the

internal conflict and the insurgence of guerrillas and paramilitaries. The

control of national territory by the guerrillas helped them to cultivate

drugs and generating incomes by its distribution.

The cocaine trade followed the same footsteps of the marihuana

traffickers. In the late 1960s, a small cocaine network, in control of exile


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Cuban criminal organizations based in Miami, jumped out. Smuggling

was carried out largely by individual carries or mules, which

transported few cocaine kilograms in commercial airlines.

In the 1970s, the demand of cocaine in the United States increased

rapidly, but the limited raw coca suppliers production in Colombia were

increased with the coca paste that was imported from Bolivia and Peru,

then it was refined in kitchen laboratories and finally smuggled into the

United States. In addition Carlos Lehbder and Jorge Luis Ochoa worked

with Medellins criminal networks to transform the cocaine transportation

system from small activities such as mules into huge airlift operations.

Font: http://redalyc.uaemex.mx/pdf/861/86100806.pdf

Many drug cartels in Colombia, started to buy bigger and betterairplanes and boats for transporting drugs, they bought more

sophisticated electronic communications devices and radars to escape

detection, and also paid big amounts in bribes for protections. Also they

installed their own middlemen in Miami so they could coordinate and

move drugs easily into United State territory.

By the early 1980s, the marihuana traffic was being left a side by thecocaine trade. Cocaine also generated criminal organizations that were

more profitable, vertically integrated, hierarchical in structure, and more

ruthless in their systematic use of bribery, intimidation and assassination

that the marihuana traffickers. Drug mafia provoked new levels of

violence in Colombia such as the relying on paid assassins, known as

sicarios. The drug traffickers not only fought among themselves but also

launched a campaign of murder and intimidation against Colombias

government authorities. In that period this drug traffickers effectively
http://redalyc.uaemex.mx/pdf/861/86100806.pdfhttp://redalyc.uaemex.mx/pdf/861/86100806.pdf


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paralyzed the countrys system of justice and helped to the devaluation

of life, converting murder and brutality into a regular source of income.

The marihuana money was concentrated along the Caribbean coast, but

cocaine money was being spread into the major metropolitan areas

specially were the drug cartels where such as Barranquilla, Medellin and

Cali. Not being enough with the enormous economic power, the drug

traffickers reached out for a large quota of political power. In addition to

corrupting the political and economic systems, drug trafficking was

generating a growing domestic drug problem in Colombia.

2.3.1. Drug Cartels

With the prohibition of drugs in Colombia, producers and

traffickers formed armed clandestine cartels. During the

increase of the demand in the 1980s, the cartels expanded and

organized in criminal groups usually lead by one or more

capos (leaders). Some of these organizations started a warwith the Colombias government to try to avoid the extradition

treaties with United States. This caused many terrorist acts

against the civilian population, and also extended to wars

between cartels. In the decades of 1990 and 2000 several of

these cartels infiltrate the State institutes and also made

alliances with groups outside the law such as the guerrilla and

the paramilitaries.

2.3.1.1. Medelln Cartel

It existed since the 1970s decade and disappeared in

1993. Until that year it controlled 95% of the cocaine

shipments from Colombia to the United States, Mexico

and Spain. It was catalogued as the most dangerous

criminal organization of the planet, because its leader


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Pablo Escobar was catalogued one of the 5 richest

men in the world in 1985. This cartel ended when the

Colombian police killed Pablo Escobar, but this gave

free way to the Cali cartel to control the market. Its

principal members were Pablo Escobar maximum

leader, Gonzalo Rodrguez Gacha, Carlos Lehder, and

the brothers Ochoa (Fabio, Jorge Luis and Juan

David).

2.3.1.2. Cali Cartel

The brothers Miguel and Gilberto Rodrguez Orejuela

formed this cartel. In their golden period, the North

American authorities pointed this cartel because they

were responsible of sending 35% of the cocaine that

reached their country. For this reason, it was

catalogued the most dangerous criminal organization

of Colombia after the Medellins cartel fall. It existed

since 1985 until 1995, when the Rodrguez Orejuela

brothers were captured.

2.3.1.3. Norte del Valle Cartel

Its principal operations are in the North of the Valle del

Cauca, the southeast of Colombia. In 1990 it had an

important increase after the fragmentation of theMedellins and Calis cartels. This cartel had a great

impact in 2008 when his boss Wilber Varela alias

Soap was killed on January 28. It is known as one of

the most powerful organizations engaged in the

business of drug trafficking. Currently is led by

brothers Luis Enrique and Javier Antonio Calle Serna,

alias The Comba.


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Between 1989 and 1999 corruption in Colombia summed 3.5 billion

USD in frauds and a loss of 1% in its GDP. Other aspects that

corruption has affected are the loss of credibility in the Colombian

government and politicians. The tight bonds between politicians and

drug traffickers has made even more difficult to stop corruption in the

country. In some cases this alliance facilitate the operation and

management of drug crops.

Even though the government tries to control the corruption the results

are insufficient, this has caused a big trouble to Colombian society

because they see corruption as major problem for doing business. This

chart shows how was corruption since 1998 until 2010.

Font: http://revistasupuestos.uniandes.edu.co/?p=1755

According to the Perception of Corruption index 2011 Colombia ranks

80 with a score of 3.4. where 0 means that a country is perceived as

highly corrupt and 10 means that a country is perceived as very clean.3

Levels of corruption have increases steadily since 2009 and they

continue getting worse because the General attorney and the

comptroller discovered corruption at almost every level of the

government. In 2009 48,000 government officials were being

investigated for corruption (800 government officials and 30 governors).

Colombias modern corruption takes place mostly in business between

3http://cpi.transparency.org/cpi2011/results/#CountryResults
http://revistasupuestos.uniandes.edu.co/?p=1755http://revistasupuestos.uniandes.edu.co/?p=1755


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By the other hand other factors that contributed to Colombias crisis

was the sudden outflow of capital from the country and the region due

the financial crisis of Asian (1997) and Russia (1998), among others.

This reduced significantly the access to external credit and made

difficult to maintain levels of domestic spending and the financing

imbalance of the current account.

Real interest rates rose into extraordinary levels in Colombias

macroeconomic history during the last decades and aggravated the

debt problems of the different agents. The result was a contraction in

domestic spending; despite the negative supply shocks associated

with sharp increases in real wages and nominal devaluation, inflationfell from 20.7% in June 1998 to 9.2% in December 1999. In fact, the

only component of domestic spending that increased was government

consumption, while private consumption and public and private

investment reported a dramatic drop.7

The result was a process of macroeconomic adjustment that combined

increases in interest rates, higher devaluation, fall in international

reserves and contraction of economic activity. The current account

balance as a percentage of the GDP passed from a deficit of 6.7% in

the first quarter of 1998 to a surplus of 1.2% in the last quarter of 1999.

The economic difficult conditions faced by Colombia, particularly since

mid-1998 were the result of adverse external environment and

inadequate macroeconomic management in previous years but also

the new administration of Pastrana was responsible for deepening intothe recession. The economy was weak due two factors, first the

implementation of the new "fiscal adjustment program" (characterized

by having higher taxes, cuts on the public investment and increases in

operating costs) and second the lack of rapidity in decision-making.

7http://www.nuso.org/upload/articulos/3211_1.pdf


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CHAPTER 4

PRESIDENCY OF ANDRS PASTRANA

4.1. PLAN OF GOVERNMENT

In 1998 Colombia was living one of its worst crisis after the

presidency of Ernesto Samper. Guerrillas and Paramilitaries

increased their power and extended their illicit activities. Also the

relationship with United State was broken after they knew that

Samper was accused of having drug trafficking money in his

campaign.

In June 1998 Andrs Pastrana was elected as president of

Colombia. Pastrana inherited a number of grave problems among

these was the guerrilla war, carried out by aggressive and well-

financed left-wing rebel groups and a powerful narcotics industry,

whose illicit drug money infiltrated almost every level of society.

Pastrana based his campaign on a peace process with the FARC;

this was a very attractive appeal that favored him with all the

citizens. During nearly all of his administration he made changes in

the reform of the armed forces that resulted in considerable

improvements in force strength, morale, and capability. Pastranas

point of focus throughout the period was the peace negotiationsand, while he permitted military operations to go forward, his

central objective was to pressure the FARC to engage in talks,

without elaborating a military plan to bring that about.

During his government he passed the National Development Plan

1999-2002, Change for building peace, in which he established

four main strategies:


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reasons, later it was known that the real reason for his absence

was that he didnt want to send the wrong message that the

peace was near. But later the real reasons learned that did not

make the appointment because her presence would "send the

wrong message that peace was near." The same day, the

second in command of the FARC and a spokesman for the

negotiating table, Raul Reyes gave a speech called "Agrarian

Reform of the guerrillas."

Talks between the FARC and the Pastranas Government

began officially in January 1999 only to be suspended by the

FARC two weeks later, resumed in April, suspended in July,

and then continued in a stop and go pattern for another year

and a half. This gave a clear idea that the FARC was using the

Zona de Despeje as a command and control center for

operations, zone in which they were stationing thousands of

troops, having an industrial scale coca production and was a

holding point for kidnapping victims. Eventually, the FARC

continued their military action against the Colombian territory, it

was becoming more frequent the kidnappings, assassinations,

and attacks on civilians. The lack of meaningful progress in the

peace talks turned public opinion against the Despeje and

Pastranas popularity started to decrease. Pastrana finally

declared an end to the peace process on February 20, 2002,

and ordered Colombian forces into the Despeje.

4.2.3. Results

The failure of the peace process was probably predestined.

Since the beginning the process was judge severally because

the permissibility of president Pastrana to the FARC. By the

other hand the FARC judged that it had the military and political

advantage over the government and in fact had no intention ofdemobilizing under any circumstances. One of their purposes


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9 The price tag for Plan Colombia was $7.5 billion, $4 billion to

be provided by Colombia and $3.5 billion requested from

foreign assistance, including from the United States.

Even though the plan had many criticisms, its results were very

successful. Plan Colombia proved to be a positive factor in

reversing Colombias decline and also it helped restore the

effectiveness and credibility of the state. By the other hand it

also promoted a closer and more positive relationship between

the United States and Colombia.

4.3.2. Financing

Between 2000 and 2005, Plan Colombia received $2,800

million dollars, and with the support of the Defense Department

its total average amount was $4,500 millions dollars. The Plan

Colombia funding included $860 million specifically for

Colombia this was the largest amount being some 403 millionfor a massive counternarcotics effort in the Caquet and

Putumayo departments. This support also included two more

counternarcotics battalions that were equipped with 16 UH-60

Black Hawk and 30 UH-1H Huey helicopters.

This package also included $115,6 million for the Colombian

Police, $58,5 million for economic aid and alternative

development projects (counter-drug effort in Putumayo), $47,5

for assisting displaced people, $53,5 million for improving

human rights and $3million to support the peace process that

was on track. In 2005, the Bush Administration asked for

9 Countering Threats to Security and Stability in a Failing State; Lessons from Colombia; A Report

of the CSIS Americas Program, Plan Colombia page 15.

http://dspace.cigilibrary.org/jspui/bitstream/123456789/26495/1/Countering%20Threats%20to%20Security%20and%20Stability%20in%20a%20Failing%20State%20-

%20Lessons%20for%20Columbia.pdf?1


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program included the fumigation and eradication of 1300 square

km of coca plantation in 2003. This has prevented the

production of 500 metric tones and also denied the income of

around $ 100 millions of Colombian pesos to the drug traffickers

and illegal organizations.

4.3.4. Results

Plan Colombia didnt achieve the expected results that were

initially proposed. For cultivations the goal was to reduce them

around 50% through 2000 and 2006. According security

agency CIA (Central Intelligence Agency) the cultivation of

poppy and the production of heroin decreased by 50% but coca

cultivation increased by 15%. The reason of this increase was

because coca farmers started to cultivate in remote places

inside the jungle to avoid the eradication. The cocaine

production increased by 4% during the same period but

according to data from the Office of National Drug Control

Policy, ONDCP, the production of cocaine didnt maintain the

same parallel growth of coca crops due the impact of manual

eradication in the area.10

According to the U.S. authorities, Colombia improves their

safety through its anti-narcotics strategy, military and police

actions and finally other efforts such as programs for

demobilization. With this plan and the next president during2000 and 2007, the Colombian government reports that the

number of kidnappings and killings had reduced to 1/3, and

there were no more oil pipelines attacks.

10United States Government Accountability Office GAO: Plan Colombia
http://www.gao.gov/new.items/d0971.pdfhttp://www.gao.gov/new.items/d0971.pdfhttp://www.gao.gov/new.items/d0971.pdfhttp://www.gao.gov/new.items/d0971.pdf


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Font: http://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdf

One of the mayor components of the policy was the

demobilization and reincorporation of guerrilla andparamilitaries to a civil life. The objective was to reduce

the number of members of the illegal armed groups and

give them a flexible alternative to restart their life and

recuperate their families.

During the year of 2003 the total amount of members

that left this groups were around 2,538, increasing by80% the number of rehabilitated members compared to

2002.

Font: http://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdf
http://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdfhttp://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdfhttp://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdfhttp://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdfhttp://www.colombiaemb.nl/es/seguridad/resultados_politica_usa_diciembre1.pdf


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Also with the generation of national and international

trust and confidence the GDP indicators increased

notoriously since ex president Pastrana.

Font: http://www.colombiaemb.nl/es/seguridad/documents/ResultadosGobiernoUribe.pdf

As Uribe announced in his campaign program, the

recovery of the countrys trust and the perception of

national security had a positive effect in the reactivation

of the economy. Colombia has been increasing its

growth of GDP since 2002.

The increase in the GDP for 2007 was of 7,5%; the

reason of the increase of Colombias economy is due

the construction that expanded 18,96%. In second place

was the manufacture industry that increase 13,30% and

in third place was commerce that reached an increase

of 11,53%. The good behavior of the internal demand

was reflected in the house buying, cars and appliances

goods.


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Because the global financial crisis and the weakening

demand for Colombias exports, its economy only grew

2,5% in 2008 and 0,4% in 2009. After experience that

crisis, the Colombias economy rebounded to around

4.4% in 2010. 17

5.2.2.3. Unemployment rate

In terms of unemployment, during the last 10 years

Colombia has been on top of 10%, this related with the

other countries of South America is really high as seenin the table 1. 18 But also the chart show that since Uribe

was in the presidency the rate slowly decreased from

18,1% to 14,8% in a 2-year period. A rise in 2009 due

global crisis made that the rate increase 1,5% and

slowly decreases to 12,4% in 2010.

Font: http://razonpublica.com/index.php/econom-y-sociedad-temas-29/2362-panorama-

del-empleo-en-colombia-.htm

17 http://www.indexmundi.com/colombia/economy_profile.html18 http://razonpublica.com/index.php/econom-y-sociedad-temas-29/2362-panorama-del-

empleo-en-colombia-.html
http://razonpublica.com/http://razonpublica.com/


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Another change that helped the security was the creation of one

new army division, (with a second one in 2005), one new fixed

territory brigade, and two new mobile brigades with 10 counter-

guerrilla battalions that were assigned in Villavicencio (Meta) and

the in Bogot.20 For a major expansion and control, eight new

territorial brigades were created covering larger areas of the

country. The army added five new high-mountain battalions of

1,200 soldiers each to control key mountain passes during 2002

2005, a special battalion to protect energy infrastructure, and in

2002 seven companies assigned to patrol roadways. By the other

hand there was a particular attention to improve logistics support

and intelligence capabilities. In 2003, the government created

four new military intelligence and counter-intelligence centers and

two new intelligence units in support of operations.

The result of these changes has caused a great impact in

Colombia because since Uribe took office there was a creation of

a considerably more effective army. Also the size of the National

Police has increased and expanded into territories were there

was no presence of authority. Since 2002, 168 new police

stations and 146 substations have been created; this has helped

to consolidate security control over areas recovered from the

insurgents.

In terms of air mobility, new helicopters were included making it a

key ingredient for was against FARC. In Pastranas period theairlift capability was very small, there was an estimated of 20

functioning helicopters. With Plan Colombia new aircrafts were

added such as UH-60L Black Hawk and UH-1N Huey helicopters

to support the Counter-Drug Brigade. By 2008, Colombia

20 P

2009


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5.4.2. Paramilitaries

When Uribe started his administration, his main interest was to

start talks about demobilization but at the same time increasethe military pressure. From the governments point of view, the

demobilization of the paramilitaries would eventually eliminate

one of the major sources of violence and human rights abuses

and it will also disrupt criminal activity, and undercut the drug

industry.

In December 2002, the AUC declared a unilateral cease-fire tofacilitate talks but over the time this agreement was constantly

violated. In 2003, talks with the government began and Uribe

submitted an alternative sentencing law to Congress covering

the terms of demobilization. This law provoked an immediate

commotion in domestic and international circles for its kindness

and lack of transparency so the administration quickly pulled it

back.

With the continued violence and drug trafficking, Uribe in August

2004 threaten to stop talks and move militarily against the AUC

(even though the cease-fire) unless the group agreed to be

concentrated in a 142-square-mile zone in Crdoba department

where they would demobilize under the verification of a mission

organized by the Organization of American States.25

During 2004, Colombian forces killed and captured more

paramilitary fighters than in any year; this showed that the

government was serious about the demobilization. The AUC

25

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agreed to Uribes terms and in late 2004, 2,500 fighters turned

in their weapons.

In July 2005, the Congress passed the Justice and Peace Law

(JPL). This legislation wanted to generate a balance between

rapid demobilization and providing punishment for grave crimes

and offenses they had committed. This had little support from

Colombia and international circles because they were offering

the paramilitaries anything to encourage its demobilization. This

was hardly criticized because it was not an amnesty but instead

stipulated criminal penalties with reduced sentences for those

who admitted to having committed grave crimes. This law would

apply only to paramilitary leaders who fully confessed to their

crimes.

During 2005 and 2006, some 32,000 paramilitary fighters

demobilized and gave up in their weapons. The most difficult

challenge has been the application of the JPL and the

reinsertion process for ex-paramilitaries because leaders

testimony has resulted on information regarding past crimes.

When paramilitary leaders knew that they would in fact spend

time in prison, they encouraged many fighters to provide

unneeded testimony so they could freeze and halt the process.

The Uribe administration eventually extradited 17 top

paramilitary leaders to the United States on drug-relatedcharges when they refused to their commitments under the JPL

to cooperate. Even though all the scandals of this law, the

paramilitaries demobilize many armed men causing an

important effect on lowering levels of crime, violence, and

human rights abuses.

The government created the office of High Commissioner forEconomic Social and Economic Reintegration of Armed Groups


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(ACR); this program will help with the difficult process of

returning paramilitaries to a normal life. The ACR tracked and

monitored some 95% of demobilized persons in the

reintegration program and provided a health or educational

benefit.

When the paramilitaries started to demobilize many of them left

mid-level leaders that carry out their business for them. When

this mid-level leaders knew that their chiefs would not return

from prison or where extradited, they started to create their own

criminal bands such as Aguilas Negras, Rastrojos, Cuchillo

gang, Traquetos (some of them contain as many 5,000

members) and other groups that included AUC units that never

demobilized, former paramilitaries who later returned to crime,

or new recruits with no paramilitary background. These groups

have become one of the many challenges that Colombia will

face in the next years.

5.5. Foreign Direct Inversion (FDI)

Uribes administration proposed an investment based on social

responsibility, which combined private initiative with social

responsibility expressed in three basic areas: first a transparent

relationships between investors and the state, this mean the

respect of the contracts, concessions, taxation and conflict

resolution, second a solidarity with the community and third asocial responsibility demonstrated through a friendly worker

relationships.

With all the improvements that Uribe did and with the

democratic security policy, Colombia could restore the

confidence in the country as a destination for foreign

investment. Todays FDI is three times higher than 7 years ago


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and Colombia was one of the best performers in the region in

2009.26

The government highlighted that Colombias economy is the

fourth largest in Latin America, the income per capita raised 2,3

times and the FDI increased 50% in the last 8 years (the rest of

Latin America grew 20%).27

Font:

http://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20in

gles.pdf

The FDI in Colombia was US$6,760 million in 2010, 5% less

than in 2009 but in a general picture it was above the historic

average of the decade. This was mainly by the high

international prices of minerals and petroleum; these two

sectors concentrated 67% of the net positive revenue reportedby Colombia over the last year.28

26http://www.colombiaemb.nl/es/seguridad/documents/ResultadosGobiernoUribe.pdf27http://www.bbc.co.uk/mundo/economia/2010/08/100802_colombia_uribe_gobierno_balance_economia.shtml

28http://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdf
http://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdfhttp://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdfhttp://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdfhttp://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdfhttp://www.investincolombia.com.co/Adjuntos/209_Reporte%20de%20Inversion%20en%20ingles.pdf


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Rate of extreme poverty

font: http://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-

politica-de-la-democracia.pdf

As for inequality, it was not possible to find GINI indicators that

were comparable in time; the reason was due the changes in

the methodology of calculation of this index. However, PNUD

recently produced a Human Development Report in which

Colombia ranks as the fourth most unequal country in the world

after Haiti and Angola. 29

The new measurement includes aspects such as education,

health, employment, life conditions in the childhood and youth

and housing characteristics. So with the new methodology of

poverty measurement, the results showed that poverty has been

continuously declining.

In the period 2002 to 2010, poverty fell 12.2 percentage points

from 49.4% to 37.2%. In 2009 the decline was 3 percentage

points from 40.2% to 37.2%. In addition, the poverty of the 13

main metropolitan areas of the country has had a pronounced

29http://hdr.undp.org/en/media/HDR_2011_ES_Complete.pdf
http://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-politica-de-la-democracia.pdfhttp://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-politica-de-la-democracia.pdfhttp://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-politica-de-la-democracia.pdfhttp://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-politica-de-la-democracia.pdfhttp://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-politica-de-la-democracia.pdf


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reduction; it decreased 12.7 percentage points from 35.9% in

2002 to 23.2% in 2010. In rural areas the reduction has been

lower compared with the total evolution of the country. Between

2002 and 2010 rural poverty fell 10.6 percentage points from

60.9% to 50.3%. However, in 2010 the reduction was important,

4 percentage points from 54.3% in 2009 to 50.3% in 2010. The

incidence of extreme national poverty, showed a decline of 5.3

percentage points between 2002 and 2010 from 17.6% to

12.3%. The trend in the last year was positive. The extreme

poverty rate fell 2.1 percentage points from 14.4% in 2009 to

12.3% in 2010. In urban areas, the reduction in this period was

4.2 percentage points from 12.3% in 2002 to 8.1% in 2010. In

the 13 largest cities, the incidence of poverty has reached levels

below 5%, from 7.4% in 2002 to 4.6% in 2010 this means a

reduction of 2.8 percentage points. But the greatest reduction is

observed in rural areas that were reduced by 7.3 percentage

points, going from 32.8% to 25.5% between 2002 and 2010.30

The GINI coefficient nationwide has remained around 0.56. In

2010 it recorded a slight increase in inequality, rising from 0,557

to 0,560. In urban areas the GINI coefficient shows a coefficient

of 0.54, it had a minor increase between 2009 and 2010 from

0,534 to 0537. In the 13 main areas the coefficient passed from

0,548 to 0,528 in the last 8 years. The rural area has the highest

GINI reduction of 5.4 points between 2002 and 2010 going from

0,524 to 0,470. In 2008 Colombias GINI was 0.59, one of thehighest, if not the highest of the planet.31

The statement and the Evolution of Multidimensional Poverty

results indicate a reduction in the national multidimensional

30http://www.resistencia-

colombia.org/index.php?option=com_content&view=article&id=1118:jimy-rios&catid=20&Itemid=6131http://www.semana.com/nacion/desigualdad-extrema/153207-3.aspx


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poverty analyzed in the same period. The percentage of poor

people nationwide IPM was reduced by 29 percentage points

between 1997 and 2010, from 60% to 31% in this period.

Between 2008 and 2010 the incidence of multidimensional

poverty fell by 4 percentage points from 35% to 31%. In urban

areas there was a multidimensional poverty incidence of 24% in

2010, 27 percentage points lower than in 1997 and 3 points

below 2008. In rural areas the incidence in 2010 was 53%, more

than twice the percentage of poor people than in urban areas.

With all these problems, the national government promised to

reduce monetary poverty to 32%, extreme monetary poverty to

9.5% and multidimensional poverty to 22% by 2014.32

In 2010 the number of poor people according to the

Multidimensional Poverty Index (MPI) was 13.9 million. Between

2008 and 2010 the number of poor people by IPM fell to 1.5

million. So, between 2009 and 2010, the national poverty went

from 40% to 37.2% and the extreme poverty fell from 14.4% to

12.3%. With the previous methodology it went from 45.5% to

44.1% and from 16.4% to 14.8% respectively. It can be

concluded that the poverty decreased but not inequality. This

can be explained due a higher growth, lower unemployment and

monetary support.

5.7. Corruption

In terms of corruption the balance for Colombia in 2009 wasnt

good, this does not show any improvement. By contrast, in

recent years has deteriorated. This was revealed by the Index of

Corruption Perception 2010 (ICP) published by International

Transparency, in which the country appears with a rating of 3.5

32

http://www.resistencia-colombia.org/index.php?option=com_content&view=article&id=1118:jimy-

rios&catid=20&Itemid=61


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on a scale of 0 to 10 where 0 is the highest perception of

corruption and 10 the lowest.

In 2009, Colombia had a rate of 3.7 and was number 75 in the

world rankings, in 2008 the score was 3.8 and ranked 70.

According to a report released by Transparency for Colombia,

for 2010 Colombia fell from 75 to 78 among 178 countries. The

situation has brought concerns because during the last 7 years

before the report Colombia maintained its score that was 70.

And this rank does not show any improvement for 2011

because Colombia occupies number 80 within 183 countries

evaluated and is in the group of poor graded. Colombia

achieved a score of 3,4 over 10, this means one tenth less than

the measurement reported in 2010.33

The measurements of National Transparency Index also

revealed that of 138 public entities assessed in 2007-2008, only

four were located at low risk of corruption, while 41% was at

medium risk and 17% in high and very high risk of corruption.

With in this study, Colombia looses almost 4 billions of pesos

due corruption, and according to the corruption index Colombia

is located with a rank of 3,5 (being 5 the lowest) and has a level

of impunity in 4.5.

In previous studies of the Americas Barometer in Colombia, the

problem of corruption had taken secondary place between theconcerns of Colombians. However, in 2011 the percentage of

people who point out corruption as the most serious problem

facing the country increased dramatically. Other studies made

by Electoral Observation Mission, MOE, and the Observatory of

Democracy at the University of the Andes corroborated the

gravity of this. The study reported that of 157 opinion leaders

33http://www.elespectador.com/impreso/politica/articulo-314323-colombia-otra-vez-rajada-percepcion-sobre-corrupcion


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surveyed, 25% said that corruption is the most important

political problem that currently has the country followed by the

concentration of power in the executive with 20%, and

uncertainty about the third presidential term with 17%. The

graphic below shows that between 2010 and 2011 the

proportion went from 4% to 12%; by 2011 corruption appeared

in third place among the specific problems, only overcome by

violence (21%) and unemployment (20%).

Font: http://www.vanderbilt.edu/lapop/colombia/2011-Colombia-Cultura-

politica-de-la-democracia.pdf

This increase is related to the multiple scandals that have

erupted through Uribes government. One of these involves

Andres Felipe Arias, who was Minister of Agriculture during the

Uribes government. He is in prison for acts related to the

irregular granting of loans that were originally intended to

promote agricultural projects but according to reports, this

money ended in the hands of large owners that had contributed

to the campaign for the nomination of the Conservative Party of

Arias. Another of his ministers of Agriculture was involved in the


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"plundering" of hundreds of hectares of land from farmers in the

northwest of the country that ended in the hands of large

companies. Another event that has had great resonance with

corruption involves the intelligence agency, the DAS. During

Uribes period, illegal actions were done such as tracks, traces

and illegal harassment against politicians, judges, activists and

journalists who oppose to his government. These facts were

added to the processes developed in recent years against

politicians, mostly members that accompanied President Uribe,

that were linked to paramilitary groups. Another case of

corruption during the Uribes administration was the deviation of

hundreds of millions of pesos from payers to accounts of

functionaries from the office of tax administration known as

DIAN. It was also discovered the scandal of false positives. The

government of ex President Uribe and in its time the Minister of

Defense Juan Manuel Santos (formal President) measured the

outcome of the fight against illegal groups by the number of

deaths. This situation led that some of the militaries kill innocent

people and the catalogued them as terrorists so they can show

results.

So it can be concluded that corruption is one of the main

problems of Uribes governance and that has impacted the

society. As mentioned before, corruption has become a growing

concern among Colombians and is having a great impact in the

confidence within the country and foreign countries.

5.8. Public Administration

In the presidency of Uribe it was created an instrument that

helped face the difficulties in the previous years. This instrument

was the Renovation Program of Public Administration (PRAP)

that was included as part of the National Development Plan


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2002-2006, in this part of the plan it talked about the need to

make an advance on a State Reform, in addition to

administrative reform this contemplated changes to justice and

the political regime. Act 790 of 2002 gave the president

extraordinary powers to reorganize the administrative structure

such as the abolition or merger of ministries and administrative

departments and the creation of entities.

PRAP's strategy was defined in a short term, there were created

the vertically reform interventions which means the redesign of

entities belonging to the administrative sector. These

interventions were aimed both at increasing efficiency in fulfilling

the mission of the institutions function as reducing operating

costs. Each intervention was classified into one of the following:

changes in plant or structure, merger, creation or liquidation

Vertical Reforms

Reform of public entities

The restructuring of the State can be measured by indicators

of the fiscal impact of the reform and indicators of results, in

terms of number of: Reformed bodies, number of job cuts and

savings by reducing payroll, and number of processes

liquidation.

Indicators of fiscal impact

The State reform process has contributed to save around $

24.7 billion pesos; this is equivalent to a fiscal impact of

5.36% of GDP. These savings are re-presented in lower

pension liabilities for the abolition of fees and pension reform,

improvements in the operational balance of public entitiesand in profits from the sale of assets and public Banks.


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The document also indicated that in the period 2002-2010

despite Uribe's reform that was seeking to stop the growth of

expenditure and pressures on fiscal stability, the balance of

external debt, rather than decline, increased passing from U.S.

$ 22.838 million in 2002 to U.S. $ 62,114 million approximately

in 2010. Besides, the so-called 'fiscal gap' also increased by the

end of 2009 it was at $ 9 billion. By the other hand the PRAP

also sought to strengthen the Directorate of Legal Defense of

the Nation that is in charged by the Ministry of the Interior, by

the end of Uribes period this goal was also not fulfilled.35

35 http://www.elespectador.com/impreso/politica/articulo-259433-antecedente-de-reforma


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CHAPTER 6

NEW PRESIDENCY OF JUAN MANUEL SANTOS

6.1. Presidency

Juan Manuel Santos is the actual president of Colombia for the period

2010 -2014. In previous years he was part of the liberal party until

Uribe developed the party of the U, afterwards he was the minister of

defense for 2006 until 2010 during Uribes presidency. Santos had a

clear idea that if the third reelection of Uribe would not happen he

would enter in competition with the other candidates for the

presidency. As president, Santos has highlighted five "locomotives" to

stimulate economic growth: extractive industries, agriculture,

infrastructure, housing, and innovation. His biggest challenges for his

presidency are inequality, underemployment, and drug trafficking, also

Colombia's infrastructure requires major improvements to sustain

economic expansion.

Since the beginning of his campaign, Santos based his government in

the continuation of the Democratic Security Policy, implemented during

eight years by the ex president. Santos had another big challenge his

relationships with its neighbors presidents of Ecuador and Venezuela

were very poor due his statement of the attack of the camping of Raul

Reyes in Ecuadors territory when he was the defense minister.Another crack in the relationships was the military agree of Colombia

and United States that caused great polemic with president Hugo

Chavez (Venezuela).

With his first months of presidency, the FARC launched an attack to a

prestigious radio station saying that the attack was the welcome to the

new president. The president Santos responded, There is a feelingamong many people that this (the guerrilla attacks) is something they


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want to welcome the new government. If that is welcoming, you will

see the answer to that welcome. After some months of planning and

developing operations Sodoma, in September 19 2010, the armed

forces and policy members bombed a camp of the 48 front of the

FARC in which died a big commander Jorge Briceo Suarez alias

Mono Jojoy.

Another big issue in Colombia is the displacement so in August 2010,

Santos introduced unprecedented legislation to better distribute

extractive industry royalties and compensate Colombians who lost

their land due to decades of violence.

Santos period has had many challenges one of them was that in 2010,

Colombia experienced its most severe flooding in decades, with

damages estimated to exceed $6 billion.

Santos administration continues to pursue free trade agreements with

Asian and South American partners, a trade accord with Canada was

started in 2011 and also that year it was signed the trade agreement

with the United Sates, but the negotiated trade agreement with the EU

has yet to be approved by the EU parliament. With the Improvement of

the relations with Venezuela, the worries about restrictions on bilateral

trade have ease. Also as a great goal, in October 2011 Colombia

signed a free trade agreement with United States.

6.2. Economy

In terms of the economy, Colombia has a better picture due FDI and

new strategies and projects made by the president. Colombia has

been increasing its GDP since the last fall because of the world crisis

as seen in the chart bellow:


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Font: DANE

Colombia experience a fall in its GDP from 3,5% in 2008 to 1,7% in

2009 but then it had a significant recovery to 4% in 2010 and later one

5,9 by 2011. In 2011 all the national sectors register positive rates.

The sectors that had the biggest increase were mining, transport,

storage and communications, the sectors that had a lower increase

were electricity, water and gas supply. During the same year there wasan increase in the exports by 21,5%, the exports by 11,4%, and a total

consumption to 5% compared with 2010.36

In terms of security, the member of the guerrilla groups that were

captured, killed or demobilized show a decreasing tendency from

5,474 en 2009 to 4,673 in 2010 and 3,932 in 2011. The guerrilla

actions were in 2009 a total of 161, dropped to 128 in 2010 and

increased in 151 in 2011. A big concern is the attacks to the

installations that were from 9 in 2010 to 20 in 2011. This indicates that

the conflict is increasing its impact on safety generating a big concern,

considering its symbiosis with drug trafficking. On other terms,

homicide continues the downward trend. Go from 15,817 in 2009 to

15,459 in 2010 and 14,746 in 2011, but the kidnapping comes with a

growing trend: it goes from 213 in 2009 to 282 in 2010 and 307 in

36http://www.dane.gov.co/files/investigaciones/boletines/pib/presen_PIB_IVtrim11.pdf


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attracted more FDI having an increase of 30.2% in the first quarter of 2012. In

terms of GDP it increased from 4% in 2010 to 5,9% in 2011. Another

economic indicators that increased were exports by 21,5%, and imports

11,4%. The security and homicides have showed a decreasing tendency, but

the guerrilla actions and kidnappings showed an increase.

For 2012, the economic outlook report from BBVA highlighted that the local

economy will grow about 5% in 2012; within the report it also showed that

inflation will remain stable and will end by the year at 3.4%.


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