Our world today is so interconnected that the collapse of the subprime mortgage market in the U.S. has led to a global financial crisis on a scale not seen since the Great Depression. Here’s a round-up of how the countries around the world are dealing with the economic meltdown.

Europe

The 15-country eurozone is officially in recession for the first time since its formation in 1999. From French President Nicolas Sarkozy’s newly announced economic summit to Iceland’s collective sigh of relief over a bailout (the International Monetary Fund’s first loan to Western Europe since Britain got a helping hand in 1976), Europe is struggling with its own brand of turmoil as the financial crisis tears through the continent.

But in the German cities of Eisenach and Bochum, residents are feeling a special empathy for the U.S. Both are home to Opel car plants, shut down as parent company General Motors pleads with Capitol Hill for a loan.

Opel has approached the German government in an attempt to secure liquidity should GM go bankrupt. German Chancellor Angela Merkel agreed to consider a loan, but immediately faced resistance even within her own party from lawmakers concerned that funds might find their way back to Detroit to prop up the ailing American parent company. All this comes at an inopportune time for Opel. Their Insignia model just won the title of European Car of the Year for 2009 — the first time in 22 years that a GM car has taken top honors. Perhaps the Insignia is a bit more stylish than 1987’s Opel Omega…

As the head of Europe’s second largest economy, French President Sarkozy announced a $25 billion investment fund yesterday. The bailout is part of a plan launched last month aimed at protecting French companies from foreign take-overs. Despite payback clauses and caps placed on executive pay, the bailout has angered France’s powerful unions who are staging massive strikes this week in air and rail travel, and postal and telecom services.

Sarkozy, who currently holds the rotating presidency of the E.U., has been so vocal about the excesses of laissez-faire capitalism and the necessity for better market regulation, that The Economist semi-jokingly questions whether the global financial crisis has turned him into a “closet socialist.” Sarkozy was instrumental in arranging the recent G-20 summit, but returned from Washington disappointed by its outcome. On Tuesday, he announced that he and former British Prime Minister Tony Blair will co-host another meeting of world leaders and financial experts in January 2009 in Paris to continue looking for ways out of the crisis.

In 2001, two-fifths of Turkey’s banks failed after an irresponsible lending spree. Taking over the banks and restructuring them cost the state a crippling 30 percent of GDP and plunged the economy into a deep recession, triggering one of the I.M.F.’s biggest-ever loans. At the G-20 summit in Washington last weekend, Turkish Prime Minister Reccep Tayyip Erdogan announced his country may be close to reaching an agreement to receive yet another emergency loan from the I.M.F. But Prime Minister Erdogan has warned the Turkish business community not to expect a government bailout this time: “Nobody should expect everything from the government. It’s not like the government is going to inject cash into the emptied safes of companies. Let me put it clearly, such a thing is out of the question.”

Asia

After months of avoiding the global financial crisis and years of excess money in the banks, Japan has also slipped into a recession. The world’s second largest economy has seen a recent appreciation of the yen and consequently, a decline in the demand for exports, especially among its most loyal customers. In the United States, the world’s largest auto market, the price of Japanese vehicles is rising and sales are dropping. Japanese car manufacturers Honda, Nissan and Toyota are reporting steep declines in sales and profits. Sony is also predicting a 59 percent plunge in profits due to deteriorating sales of gadgets and flat-screen TVs.

Prime Minister Taro Aso announced a $51 billion stimulus package last month, which included 2 trillion yen ($20.3 billion) in special benefits to all households. Aso hoped to encourage domestic consumption by distributing $600 to each family of four. Some economists predict that the worst is yet to come in Japan, but the bleak outlook hasn’t stopped Japanese consumers from snatching up an entire stock of diamond-encrusted mobile phones. Studded with 537 diamonds – a total of 18.34 carats – and a price tag of 13 million yen ($134,000 dollars), the line of 10 phones sold out within three days.

South Koreans have begun to fear a repeat of their 1997-1998 economic collapse, when the I.M.F. had to step in with a $58 million bailout. The government of South Korea responded to the current downturn by setting up a $30 billion currency swap with the Federal Reserve of the United States, which was designed to alleviate the pressure on the country’s banks. On November 14^th, China and Japan also agreed on a currency swap with South Korea, contributing $4 billion and $15 billion respectively.

Despite a slowdown in garment exports and tourists, Cambodian Prime Minister Sun Hen sees the silver lining. At a summit with Thailand and Vietnam earlier this month, Sen said, “’The rich people in Europe, the buyers in America, will not buy expensive clothes produced in Europe anymore but the cheaper goods produced in Cambodia and Vietnam.”

In the first weeks of the global financial crisis, China — the world’s fastest growing economy and largest holder of foreign-exchange reserves — was hopeful the slowdown would pass it by. But figures released in mid-October showed growth dipping to its lowest in five years, down from 11.9 percent last year to 9 percent this quarter, confirming that no nation is immune. With foreign exports and investments shrinking, Chinese unemployment is on the rise, and could reach up to 2.7 million laid-off workers by January 2009. Time Magazine calls it “China’s worst nightmare,” due to the labor unrest that might result. This week, Chinese authorities issued an order to companies in the big manufacturing regions of Shandong and Hubei provinces: they must now seek government consent in order to fire more than 40 people at a time. To shore up domestic growth and market confidence, on November 9 President Hu Jintao announced a 2-year $586 billion stimulus package — four times as large as America’s current bailout plan — focused on tax reform, increased spending on education, health, and housing, and major infrastructure projects such as roads, railways, airports, and the power grid.

China suffered from two major recessions in the past 30 years, in the aftermath of the Tiananmen uprising in 1989 and during the Asian financial crisis in the late 1990s, when it last adopted a big stimulus plan. The Economist argues that this time China might “genuinely avoid a hard landing: the underlying economy, while far from perfect, is in better shape, and the government has more room to boost its spending… [M]ost economists think the stimulus package will be enough to keep growth at 7.5-8 percent for the year as a whole. If so, of the world’s eight biggest economies, China will be the only one to enjoy any growth next year.” Chinese consumers may help keep the rest of us afloat.

As the West increasingly relies on China to help it weather the storm, geo-political compromises may be in the offing. The U.K. is rumored to have secured a Chinese donation to the I.M.F. by agreeing to reverse its century-old position on Tibet: since late October, Briatin no longer recognizes Tibet as an autonomous entity but rather as a part of the People’s Republic of China.

The Middle East and Central Asia

Iranian hardliners have hailed the economic crisis as divine punishment for the perceived greed and corruption of the West and its allies. “The oppressors and the corrupt will be replaced by the pious and believers,” according to Iran’s firebrand President Mahmoud Ahmadinejad, who sees the downturn as signaling “the end of capitalism.”

He’s not the only one to see this crisis as a turning point in the culture war between East and West. Dubai’s once-booming economy has been hit hard, but some see the downturn as a chance to save the local culture. Traditional Bedouin culture has been all but lost in Dubai’s rush to become an international center of business, media and tourism. “The city needs to slow down and relax,” says Abdul Khaleq Abdullah, a political science professor at United Arab Emirates University. “It’s good for the identity of our country.”

The U.S. is expected to spend close to $200 billion on the ongoing wars in Iraq and Afghanistan this year alone. With the economic crisis wreaking havoc in the homeland, something has to give. Peter Beinart, a Senior Fellow at the Council on Foreign Relations says that “the economic environment is making a speedy drawdown of U.S. troops [in Iraq] more likely.” That might sound like good news to some. But experts warn that the financial crisis might fuel instability in fragile nations from the Middle East to Pakistan. On November 15th, a struggling Pakistan reluctantly accepted a $7.6 billion loan from the I.M.F. But still, there is fear that economic troubles will hinder Pakistan’s ability to fight the Taliban insurgency in the country’s tribal regions.

Africa

Last month, former U.N. secretary general Kofi Annan said that we cannot use the global financial crisis as “an excuse for inaction” in combating poverty and food shortages in Africa. In times of financial crisis governments often renege on promises of financial aid. In fact, the U.N. Food Agency reported that only a tenth of 22 billion euros in food and agriculture assistance pledged to the U.N. for 2008 has actually been paid.

But there are some who feel the time is ripe for Africa to excel as an economic force. Kuseni Dlamini, the South African head of the multinational mining firm Anglo American, said that now is the “great era of opportunity for Africa to rise and shine in the global scheme of things and be met as an economic giant.” Kuseni cited Botswana as a “shining example” of a country that has managed its natural resources (diamonds) in a responsible way, which has delivered long term benefits in education, infrastructure and healthcare to the country. John Simon, U.S. ambassador to the African Union has called Africa “the new frontier” in the global economy.

According to Antoinette Sayeh, director of the I.M.F.’s African Department, growth in sub-Saharan Africa, the continent’s poorest region, will remain strong. Sub-Saharan Africa experienced one of its highest growth rates in decades in 2007, growing at a rate of 6.5 percent. In the midst of the global financial crisis, the I.M.F. projects that growth in sub-Saharan Africa will fall by only half a percent in 2008 and 2009. However, Sayeh warns that sub-Saharan Africa’s economic growth could weaken with a lower inflow of capital, i.e. through foreign aid, and a reduction in commodity pricing. The I.M.F. has also identified eight sub-Saharan African countries — Botswana, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda and Zambia – as having enough growth and investment to be considered emerging markets.

Latin America

With oil dropping below $50 a barrel, the Venezuelan economy may be at risk. More than 90 percent of export revenue and more than half of the government’s budget derives from oil. With these economic risks come political risks for a government whose extensive social programs are funded with oil revenues. Venezuela holds regional elections on Sunday, November 23, and economic troubles could reduce outspoken President Hugo Chavez’s hold on power. Among other challenges, Chavez allies will have to compete with Chavez’s ex-wife, Marisabel Rodriguez (she has since married her tennis coach).

Like Venezuela, Mexico relies heavily on oil revenues. The country also relies on remittances sent home by Mexican migrants abroad. Both have declined in response to the international financial crisis. In August, the collapse of the U.S. housing market (which employs many Hispanic immigrants in construction jobs) and increased illegal immigration raids contributed to a 12 percent drop in remittances, the largest monthly drop on record. Fortunately, September figures were more optimistic. Mexico receives the third-largest amount of remittances worldwide, and receives by far the largest amount coming from migrants based in the U.S. Interestingly, the decline in remittances has not been seen (pdf) in other Latin American countries that rely on them.

Mexico is also strongly connected to U.S. investment, which could prove problematic in weathering the financial crisis. Colombia, perhaps the strongest U.S. ally in South America, is less entangled with investments, but will be affected now that U.S. banks are reducing loans to developing countries. In addition, a trade agreement that would open some areas of trade between Colombia and the U.S. could be threatened by the the recent U.S. election. One outcome of the 2008 U.S. election was the ascendance of legislators advocating “fair trade” platforms, as opposed to “free trade” platforms. President-elect Obama, for example, has advocated for stronger labor protections in the Colombia agreement, citing violence against Colombian labor leaders. President Bush and out-going Republicans, however, have pushed for the deal to be signed as soon as possible.

The Planet

There may be some surprise winners and losers in the financial crisis, but the outlook for the planet seems to teeter back and forth between the two poles. U.N. climate honcho Yvo de Boer fears renewable energies and conservation will suffer from sinking oil prices, while countries will spend less money on protecting the environment as they fork over cash to rescue banks. Validating his concerns, at a recent E.U. summit, some Eastern European countries talked about backing away from CO2 emissions targets, citing the expense. Italian Prime Minister Silvio Berlusconi added, “We do not think that now is the time to be playing the role of Don Quixote, when the big producers of CO2, such as the United States or China, are totally against adherence to our targets.”

But what’s bad news for some may actually make climate change activists pleased. With high rates of unemployment and foreclosure, populations are commuting less and shifting away from areas of suburban sprawl. Until the economic downturn, California was not set to meet its ambitious and trend-setting greenhouse gas emissions target. Now it seems as though they’re back on track. Less consumer demand likely translates into lower energy use – fewer road trips, fewer flights and a greater willingness to utilize public transportation. And, as the Christian Science Monitor reports, “One silver lining of the financial crisis is that investment decisions may not be as short-term as they have been.” Renewable energy and green technology projects might attract investors as safer bets for the long term.

WIDE ANGLE has also reported on the economic crisis in Ireland and Argentina.

Sources: BBC News Country Profiles: Colombia and MORE TERRIBLE THAN DEATH: VIOLENCE, DRUGS AND AMERICA’S WAR IN COLOMBIA, Robin Kirk, 2003.

CIA World Factbook: Colombia
http://www.cia.gov/cia/publications/factbook/geos/co.html
The CIA’s dossier on Colombia. Basic information on population, economic indicators, trade, and crime.

Colombia – A Country Study
http://lcweb2.loc.gov/frd/cs/cotoc.html
The Library of Congress’ collection of historical materials on Colombia, prepared in 1988 for the U.S. Department of the Army by the Library’s Federal Research Division.

U.S. Department of State: Bureau of Western Hemisphere Affairs
http://www.state.gov/p/wha/
The U.S. State Department’s information page on policy issues in the Americas, including information on the Andean Regional Initiative and U.S. support for Plan Colombia.

BBC News: The Global Drug Trade
http://news.bbc.co.uk/hi/english/static/in_depth/world/2000/drugs_trade/default.stm
An archive of BBC News reports and interactive features investigating drug production, trafficking and use.

Economic Perspectives: Electronic Journal
http://usinfo.state.gov/journals/ites/0501/ijee/ijee0501.htm
The U.S. State Department’s electronic publication detailing efforts in the fight against money laundering.

Casa de Nariño
http://www.presidencia.gov.co/
The official Web site of the office of the Colombian presidency.

FARC-EP
http://www.farcep.org
The Web site of the Fuerzas Armadas Revolucionarias de Colombia (FARC), the largest and most powerful of Colombia’s left-wing guerrilla organizations.

Revista Insurreccion: ELN Colombia
http://www.eln-voces.com
The Web site of the Ejército de Liberación Nacional (ELN), the smaller of Colombia’s two major leftist armed groups.

Colombia Libre
http://www.colombialibre.org
The Web site of the Autodefensas Unidas de Colombia (AUC), the umbrella organization that governs Colombia’s right-wing paramilitary groups.

Defensoría del Pueblo Colombia
http://www.defensoria.org.co
The official Web site of the office of the Defensoría del Pueblo, the Colombian Government’s human rights ombudsman.

United Nations High Commissioner for Refugees
http://www.unhcr.ch/
The Web site of the UN’s office of refugee affairs, with extensive information on Colombia’s internally displaced population.

Colombia Journal
http://www.colombiajournal.org/
The homepage of journalist Gary Leech’s “Colombia Journal”, an independent publication with a mix of reporting on Colombian politics and US foreign policy in Colombia.

CIP: Colombia Program
http://www.ciponline.org/colombia/
Homepage of the Center for International Policy’s Colombia Program, an independent advocacy group promoting demilitarization and respect for human rights; hosts an extensive collection of resources on Colombian issues.

Carol Marin: Ambassador Grossman, welcome to WIDE ANGLE.

Marc Grossman: Thank you very much.

Carol Marin: Maria Cristina, what do you think her odds are of winning and more than that surviving?

Marc Grossman: Well, first of all, let me say that I thought that the pictures and the story that you have about Maria Cristina are just absolutely gripping. And they are exactly the reason that we want to help in Colombia. And I think her chances of succeeding are good because there’s a new feeling in Colombia about the issues that she cares about. There’s a lot of backing from the United States. And so we support what she’s doing. We support what Colombians are doing and as I say, my hats off to her. What a courageous story you have here.

Carol Marin: So our tax dollars are going into Colombia, and some of them are going her way for her program.

Marc Grossman: Oh, absolutely. We spend a lot of tax dollars in Colombia. You have to remember Colombia’s a country that’s two and a half times the size of California, 45 million people. It’s a very important country to the United States. We spend a lot of money there, and we spend money all across the board. We spend it on human rights; we spend it on the rule of law; we spend it on protecting people like the people you saw in your film; and we also spend it to support the fight against narco-terrorism.

Carol Marin: We spend ten million dollars a week in Colombia. It’s fifth behind Israel and Egypt and Iraq and Afghanistan. What is it about this country that makes it so important to us?

Marc Grossman: Well, again, like as I say, Colombia is a huge country, 44 million people. They’re one of the oldest democracies in our hemisphere, and you have people in Colombia who are fighting for democracy. What are they fighting? They’re fighting narco-terrorism. They’re fighting kidnapping. They’re fighting murders. They’re fighting all of the things that we really see in this world that ought to be combated, and we try and help them do that.

Carol Marin: But, at the base of that, some people would argue when you use the term narco-terrorism, it’s an easier sell than if you said we’re fighting poverty. We’re fighting a class war in which there are very few rich elite and very many poor peasants. Are we at the base of this, actually though, engaged in trying to reverse a class war?

Marc Grossman: No, I think what we’re trying to do is allow Colombians to make choices about their own lives. And, if you look at the past two or three years since President Uribe has been in and what has happened? More Colombian military forces, many more tax dollars now come from Colombians than they did two years ago. They’re making a much larger contribution to this fight than they were in the past. And also I think it’s really worth noting that among the things that are important to us in Colombia as they’re important to Colombians is the amount of narcotics that come from Colombia. Ninety percent of the cocaine, 50 percent of the heroin coming into the United States are either grown, processed, or passed through Colombia. It’s a very important thing for us and so when you say, what are we doing there, we’re trying there to have Colombians make a possibility of their own choices — to have a democracy

Carol Marin: And, yet when you say more and more tax money is being collected, the question might be compared to what. One study that I looked at said that of the tax dollars being spent only about 780,000 of the rich actually pay taxes against millions and millions who pay nothing at all. So is it not a failed state?

Marc Grossman: Well, I don’t think it’s a failed state. And one of the things I think is very important for you to do and for our viewers to do is to recognize that we’re on a path here. Nobody said — I certainly wouldn’t say — that everything is perfect in Colombia. There’s a lot more to do in terms of defeating narco-terrorism. There’s much more to do in terms of human rights. There’s more to do in terms of the economy. Again if you compare where we are today to where we were three or four years ago, I think there’s a lot of progress and, in particular, on the contributions that Colombians themselves make to this war. One of the very first things that President Uribe did was he added a billion dollars in taxes on the wealthiest so that they make a contribution as well. More to do? Absolutely, but would I trade where I am today for where we were four or five years ago? Not a chance.

Carol Marin: Would you disagree then with the UN official who recently said, “Colombia is by far the biggest humanitarian catastrophe in the Western Hemisphere”?

Marc Grossman: I think to say it’s a catastrophe looks away from all the things that have been accomplished. Again, I want to be very clear here that I don’t say everything in Colombia is as Colombians want it or as we would want it. I don’t think they are as President Uribe would want it. But, again, if you look at the numbers: the number of kidnappings — down; the number of murders — down; the number of terrorist attacks — down. The number of internally displaced people — which was a huge number — is 50,000 people lower than it was a year ago. I think all of those are indicators that we’re on a path to making some progress.

Carol Marin: One of the other things that was said not very long ago was a statement by the U.S. drug czar, John Walters. Just a couple of months ago, he surprised a lot of people when he said, of the $3.3 billion that we have thus far spent in the last four years in Colombia, we haven’t made a dent in the cocaine trafficking.

Marc Grossman: Well, I think what he was talking about — we’ve talked about this a lot — is we haven’t seen any lowering in price here in the United States. And cocaine trafficking and cocaine production in Colombia is still a big problem. But, if you look at, again, the numbers, the number of hectares or acres that we’ve been able to take out of production in Colombia, that’s a number that has gone down 20, 21 percent each year over the past couple of years. So it’s something we have to keep at. One of the things [that most] interested me in the program and in the interview with Maria Cristina was when she says, “What about demand?” I think that’s a very important thing. One of the ways we have always started our conversations with Colombians is in recognizing that this demand is in the United States. And, so, money that has to be spent by Americans has to also be spent to deal with demand in our own country.

Carol Marin: It’s a little bit like asking whose drug problem is this, right?

Marc Grossman: It’s everybody’s drug problem.

Carol Marin: Because our demand is fueling –

Marc Grossman: Absolutely.

Carol Marin: — and stoking their supply.

Marc Grossman: Absolutely. Absolutely. Well, that’s why of the total amount of drug money in the United States, about 45 percent of it is spent here on demand reduction.

Carol Marin: Given the fact that people can get drugs from so many other parts of the world, how much sense does it make to focus so strongly on Colombia when Afghanistan is producing heroin at a record rate now. Peru is picking up some of the cocaine slack. What makes our policy so sensible, therefore?

Marc Grossman: Well, I don’t think you can look at this in terms of the drug war in the world and say we have a choice. I mean, we have to do a lot in Afghanistan because as you say, it is now and going to be a drug-producing country for a very long time. We’re making a huge effort there. The British in fact, have the lead in Afghanistan to do something about narcotics, but we’re supporting them 100 percent. And then you look at Colombia, and Colombia is sort of the key to all of this. It’s the pin in all of this. And when you say, for example, Peru, Bolivia — one of the things we’ve tried to make sure over the past two or three years is that the money that we spend isn’t just on Colombia because you don’t want to solve that problem in Colombia and then have that problem appear in Bolivia or in Peru. And so we have not just Colombia money that we’re spending, but what we call the Andean Regional Initiative. And it’s very interesting to me because I was worried that we’d make progress in Colombia and what they call the balloon effect would happen either in Peru or Bolivia. But over the last two years that’s not what happened — two years ago 8 percent reduction in cultivation in Peru and Bolivia, and 16 percent this last year. So, so far we haven’t seen the balloon effect.

Carol Marin: Though some critics will give you a fight on that, won’t they? The belief that, in fact, the way you produce cocaine varies. It gets smarter. The science gets better. You can produce less at a higher quality. So, you don’t quite need the quantity. There are some who believe, in fact, that Bolivia is producing more because Colombia is eradicating some. So, does everyone agree on this?

Marc Grossman: I don’t know if everyone agrees. All I can tell you is that the numbers that we have and what it is that we see. And, when we see first an 8 percent reduction and then a 16 percent reduction, we think we’re on the right path. And, again, eradication is not the full answer to this question. I mean, you talked earlier in your questions about poverty. And, it’s not just about eradication. It’s also about alternative development. And, it’s about the fact that we’re trying to give people — and the Colombian government, the Peruvian government, and the Bolivian government — an alternative because you can’t just go in and spray. And, then say to people, “Well, good luck.”

Carol Marin: What are you going to eat tomorrow?

Marc Grossman: You’re exactly right. But that’s why we have 50, 60 thousand acres now that used to be under the cultivation for cocaine that is now in lots of different kinds of crops.

Carol Marin: But, if you look at the breakdown, it seems by at least one analysis, that 79 percent of U.S. money is going to police and military kinds of actions. And, only about 7 percent deals with the sort of cultivation alternatives, and about 14 percent in humanitarian aid. So, how great is our emphasis on creating an economic alternative?

Marc Grossman: Well, I think it’s very large. I mean of the 500 to 400 million dollars that we spend, a lot of that money goes to alternative cultivation, as we were talking about before, human rights, justice, houses, all the kinds of things that we’re doing to try to make Colombia a democratic society. But no question — we spend a lot of money supporting the Colombian police and the Colombian military because at base if there’s no security in Colombia, if narco-terrorism wins in Colombia, then all the rest of that money and all the rest of those objectives really go by the wayside. The other really important thing is that it isn’t just about the money that we spend. One of the most important things we do in Colombia is what’s called the Andean Trade Preferences Act. That’s not aid, that’s trade. That’s offering more goods produced in Colombia to come into the United States. And, in the cut flower industry and in many other industries now, people are employed. And, when they’re employed they don’t have to look to narco-terrorism as an alternative.

Carol Marin: You know that part in the film when Maria Cristina says, “I don’t want any leaks here,” and, you see the faces around the table. And, I don’t know any of those individuals but I did have to wonder — which of them honestly was going to abide by that. And, it turns out someone didn’t. Talk to me a little bit about corruption within the Uribe government.

Marc Grossman: Well, I think there’s a lot of corruption in society in Colombia. It’s one of the things that President Uribe and his most senior advisors have had to work against. And, it goes back to this question of whose drug problem is it? Because, again, demand for drugs around the world corrupts societies. And, one of the reasons that we got to keep working in Colombia is that we own some of the moral responsibilities here. But corruption is a problem. Corruption’s a problem I think everywhere in the hemisphere.

Carol Marin: Given our great concern and our huge investment in Colombia, it was in 2003 that, for the very first time, we committed troops. And, we did so because we were protecting an oil pipeline. Is oil a principal interest of ours in Colombia?

Marc Grossman: Well no, I think to be fair, we did not commit troops to protect an oil pipeline. What we did was after the 11th of September we went to Congress and we said to Congress, do you think that we ought to expand what we’re doing in Colombia in terms of training and, should we not spend some time and some effort training a Colombian brigade to protect the Caño-Limon pipeline. And after extensive consultation with Congress, Congress did give us that additional flexibility.

We spent about $100 million to train this unit, which is by the way, vetted through the human rights process so all the people in that are people known to us and are vetted. And so, our forces there did not get committed in terms of combat or did not get committed in any other way but to the training of that brigade. And, so far that brigade has produced a lot of results.

Carol Marin: At the same time, when you say oil, you bring in a level of cynicism of what our real interest in Colombia is. If you took away the drugs –

Marc Grossman: Uh-huh

Marc Grossman: Well, I think so. And, of course, you can’t take away the drugs, and you can’t take away the oil. Drugs exist and the oil exists. And, Colombia is I think our seventh or eight largest seller of oil to the United States. And one of the interesting things that seems to me that’s happened is since we trained this unit and the numbers of attacks on that pipeline have gone way down, what do you know, another 350, 400 million dollars worth of tax revenue that comes from the oil goes into the Colombian government’s accounts. What do they use that on? Well, they use it on education and they use it on security. And we’ve also asked — and the Colombians have asked — Occidental Petroleum, which runs that pipeline, to make big investments in the neighborhood so the people can also participate in economic growth. So it’s all part of a whole. And one of the things I think when people look at the Colombia project that we have, or our Colombian policy, they want to take this piece or this piece, or this piece. And in fact, we are trying to run a policy that’s very well unified. You’ve got to fight the drugs to work on democracy. There’s no success in Colombia unless there’s real democracy and human rights. There’s no democracy and human rights unless there’s a really successful economy. So all these things are related and that’s why we try to run our Colombian policy in a unified fashion.

Carol Marin: Depending upon whose estimate you subscribe to, there are those that believe that up to 80 percent of the country is really run by either leftist guerrillas or rightist paramilitary, and not by the government itself. Is that in fact the case?

Marc Grossman: Well, two years ago or three years ago when President Uribe came to office, the numbers I think are exactly right. There are 1,098 counties in Colombia and, at the time, about 200 of those didn’t have a police station, hadn’t seen a police station in years. And one of the things that President Uribe has done is say, we’ve got to expand and put out the writ of the Colombian government all around Colombia. Today, these years later, all of these counties now have police stations and all of them have a government presence. So I think there’s more and more government presence every day in Colombia. For example, four years ago, the FARC, one of these narco-terrorist groups…

Carol Marin: The leftist guerillas.

Marc Grossman: Whatever they are. One of these narco-terrorist groups had a huge plot of Colombia that was theirs. One of the things that the former president did, I think very courageously, before the end of his term was, he said, that’s it — we’re not giving over our territory to these people anymore. So they got rid of that thing called the despeje. So more and more of Colombia is under Colombian government control and influence.

Carol Marin: At the same time, these things get complicated. As you know, in the United States we would like to extradite more and more people that we consider narco-terrorist or drug lords. At the same time, President Uribe is trying to negotiate a kind of amnesty. And part of the deal, at least for the paramilitary, is no extradition. So are we at loggerheads with Uribe about how to handle this?

Marc Grossman: No. Since President Uribe has come into office, he’s extradited about 120 people to the United States.

Carol Marin: But there are many more –

Marc Grossman: Absolutely.

Carol Marin: — that could go?

Marc Grossman: But if you look at the numbers before Uribe and now with President Uribe, that number has gone up a lot. So let’s give credit where credit is due. And yes, they’re in negotiations with the ELN. And I hope someday –

Carol Marin: Another leftist group.

Marc Grossman: Another leftist group. They are in negotiations with the AUC, the right-wing group. And I’d like to see these groups being taken off the battlefield. What we have said to President Uribe though is, those people who are indicted in the United States, for whom we have extradition requests, we’re going to stick with those extradition requests so please be clear about that.

Carol Marin: At some point do you ever say to yourself, who’s the enemy? Is it the left-wing guerillas, is it the right-wing paramilitary or people who are corrupt within the Uribe government? Who is the enemy in Colombia?

Marc Grossman: Well, the enemy in Colombia, for me anyway, this isn’t such a hard question. The enemy in Colombia is narco-terrorism. And you know the United States keeps a foreign terrorist organization list. The FARC, the ELN, and the AUC — all are designated foreign terrorist groups by the United States. So for us, it’s an equal opportunity deal here.

They’re all bad. They’re all terrorists. I believe they’re all involved in narco-terrorism. And the other enemy are those people who are the enemies of democracy who don’t want to see Colombia develop, who would like Colombia to still have corruption. And I think, all of those people, over time, will go by the wayside. But of all the problems I deal with, Colombia is one of those that actually has great clarity because, it’s no matter to me whether it’s the FARC, the ELN, or the AUC, they’re all the enemy of democracy in Colombia.

Carol Marin: That word ‘terrorist’ has taken on new meaning since September 11th. When we say it these days, we normally link it to an al-Qaeda connection. But in Colombia we’re really talking about domestic groups that grew out of some sort of revolution or sense of revolution or Marxism, or in the paramilitary case, defending drug lords who had the money. So is it proper to be talking about this in a terrorist context that we now use that term?

Marc Grossman: I think so. I think to say that terrorism only can be defined by people flying airplanes into buildings on the 11th of September excludes the recognition that in rest of the world, people have been fighting terrorism for years and years and years. I mean, in Colombia, the FARC holds three Americans. And they held Americans for over a year.

Carol Marin: Defense contractors.

Marc Grossman: It’s outrageous. And to me that’s terrorism. So I don’t have a problem considering them terrorists, and we were very quick to put these organizations on the foreign terrorist list.

Carol Marin: At the same time they hold, I think, for 2 1/2 years, Ms. Betancourt who was a presidential candidate in Colombia. There are what? 800 people being held hostage in that country?

Marc Grossman: Right.

Carol Marin: Right now.

Marc Grossman: It’s astonishing and even though I said earlier that the numbers of kidnappings were down, the number of people kidnapped and who are kidnapped is way too high. And one of the things I know our European friends a couple of years ago tried to tell the FARC and the ELN and the AUC is at a minimum, stop kidnapping people. There’s no moral base for this whatsoever. But, you know –

Carol Marin: But there’s a financial base. You kidnap them, you ransom them, you support your various interests. Correct?

Marc Grossman: That’s what I would call terrorism.

Carol Marin: Where do you see this ending? There’s one more year left in this particular program –

Marc Grossman: Yes.

Carol Marin: Vis-à-vis Colombia. Are we going to renew it? Do we have another 3.3 billion that we need to put in for another five years? Where does it end?

Marc Grossman: Well, I think I’d like to see it end when Colombians, as I say can make their own choices. And Colombians have defended their democracy. And Colombians don’t have to get up every morning like the person in your film worried about the FARC and the ELN and the AUC and when they can breathe a little bit more freely. To the extent we can help them do that, but this is a Colombian problem, not an American problem, but to the extent we can help them do that, I think we will continue. Obviously we will have to make decisions into the future about how to consolidate Plan Colombia, how to continue on with Plan Colombia. But, if I’m right, and all the reasons that I gave you about why Colombia is important to the United States, I can’t imagine that we would walk away from Colombia, especially at this time when, I think anyway, we’re on the verge of some serious success.

Carol Marin: At the same time, we’re over extended or very extended, depending upon how you look at it, in any number of other fronts right now. And in some ways, it goes back to the question, doesn’t it, have we abdicated our own responsibility and our supply issues, our demand issues? It is we who are buying those drugs. It’s we in this country who are consuming huge quantities of cocaine and heroin. Have we taken a look at ourselves closely enough?

Marc Grossman: Well, again, as I say, we always begin conversations with Colombians, either in public or in private, and the president always does by saying this drug problem is an American problem. We consume this poison and we consume this filth and so that’s why we have a moral connection to this. And I don’t know, maybe we haven’t looked at ourselves enough, but this is certainly, partially our responsibility. And that’s one of the reasons that we have a moral responsibility to Colombia.

When you talk about over extended though, I mean, one of the things we’ve tried to do in Colombia is kind of leverage our advantage and leverage our resources. Congress has said there’s only so many American military people can be in Colombia at one time. That’s fine with us. Because we’re not fighting. There are no Americans in combat in Colombia. We are training Colombians to take this job on for themselves.

Carol Marin: Is it harder to fight a war if you say, our real enemy is poverty, our real enemy is quality of life than it is to say, our real enemy is narco-terrorism? Is it a harder sell?

Marc Grossman: But I mean that’s not what we’re saying. What we’re saying is –

Carol Marin: And, you took away the oil, would we still care as much about Colombia? We would still invest as much in Colombia?

Carol Marin: No, but you know what I’m saying — in this war where we’re really talking about terrorism and we focus so hard on it, especially post-9-11.

Marc Grossman: Well, with respect though what we’ve done in Colombia is we’ve said, Colombia is a democracy. Colombians are fighting for their democracy. And they have to do that by having a functioning economy, exporting to the United States, having human rights, having democracy, and being able to defeat narco-terrorism. Again, I think you only fall into that trap if you will, when you divide this up, and I don’t want to be divided up.

We have a policy toward Colombia that’s connected. And it says, you’ve got to fight poverty to be successful, you have to have democracy to be successful, you have to have human rights to be successful, and you have to defeat narco-terrorism to be successful. It’s related. They’re not in separate pots.

Carol Marin: Do you think we try to make it too simple?

Marc Grossman: We?

Carol Marin: We. The media. Do you think in trying to discuss it we try to categorize it, and pigeon hole it more than it can be? Is that what you’re saying?

Marc Grossman: No, I don’t say that. I mean, for example, if you –

Carol Marin: It would be okay if you did.

Marc Grossman: No, but I mean, you watch the program that you’ve already produced. I mean, her challenge is not just to do one thing every today. Her challenge is to help President Uribe create all of these conditions for a democracy in Colombia.

Carol Marin: Do you feel, when you saw that film, that she was winning or she was hanging on?

Marc Grossman: Oh, I think she’s winning. Again it’s a hugely courageous story, and I have nothing but admiration for her. But again, you’d have to ask her. If you ask me, would I trade where we are today, for where we were five years ago in Colombia, I wouldn’t trade you for a moment. And so that leads me to believe that as hard as her life is, and as challenging as it is, and as dangerous as it is — which you all fairly point out — she is on the leading edge of the fight to really protect democracy in Colombia.

Carol Marin: What’s the report card on President Uribe. How is he doing?

Marc Grossman: I think President Uribe is doing very well. Again he has met a number of his obligations that seem to me that are most important. One that we were talking about before, he has levied more taxes on the rich in Colombia. He’s asked more people to serve in the Colombian military. He’s extended the authority of the Colombian government now to all of the counties in Colombia. And he’s done some very important things for us, too, which is he talks very clearly about human rights and that there is no acceptable link between people in government and the AUC. That was a debatable proposition for some time but he’s been very clear about this — that that relationship has to be broken.

Carol Marin: Are you confident that he has no connection to drug lords? There was a ‘91 report out of our own government that raised questions.

Marc Grossman: Yeah, I saw that. I don’t believe that.

Carol Marin: You think that he’s clean.

Marc Grossman: I do.

Carol Marin: He doesn’t have much longer unless they change the rules in Colombia and give him another term. Can he finish his work? Can you start again with a new person? If he has to leave do you have a new one in mind? I know it’s a democracy. But the United States does have a fair amount of influence.

Marc Grossman: No, but it’s not for me to choose how Colombians govern themselves. It’s not for me to choose who is the president. We will work with a government of Colombia. We’ll work with a democratic government in Colombia. Because just as you asked me; where does this all end, will we continue? This is a Colombian fight, and I can’t believe they’d want to give it up either.

Carol Marin: What frustrates you about our policy?

Marc Grossman: What frustrates me is what frustrates me about everywhere is that you want to go faster. You want to do better. You want to provide more for the United States and, therefore, for people who are fighting for democracy. So I come to work every day, and I just want to go faster and do more.

Carol Marin: You’ve traveled to Colombia how many times?

Marc Grossman: About six or seven times now in the past few years.

Carol Marin: And going back there in another couple of weeks?

Marc Grossman: Absolutely.

Carol Marin: When you go, what do you see? What kind of Colombia do we see through your lens?

Marc Grossman: Well, let me tell you one of the things that surprises me whenever I go to Colombia. And that is that each time when I visit Colombia, I always make time to meet with the human rights groups and the democracy groups and the church because I think it’s very important that we hear their voices as well.

And one of the most interesting things that I have found is that in every one of those meetings, what do you hear? You hear people say, ‘Stay engaged. It’s right for America to be here.’ And specifically they ask for more and more training of Colombian military forces. Because they know that the forces that we train understand human rights and understand democracy and understand their role in a democratic society. And I’ve been very interested over these six or seven times, and usually I see the same people, so I can judge what they are thinking and where they have come to. And not ever does anyone say, take your money, it’s wrong.

Carol Marin: Get out of town?

Marc Grossman: No, they want more. They want you to train more Colombian military units, to be involved more in their society. I think that’s a very interesting thing and something that always gives me a real cause for optimism.

Carol Marin: So when you’re there, through your eyes, what do you see as their greatest challenge?

Marc Grossman: Their greatest challenge is security. Their greatest challenge is to defeat narco-terrorism.

Carol Marin: Above and beyond the poverty issue? Security trumps economy?

Marc Grossman: Well, I think again, they’re all related. You won’t have real security until there is a functioning economy. And you won’t have a functioning economy until there’s real democracy in Colombia. Again, all these things are related. You can’t put them into kind of this silo and this silo and this silo. It won’t work.

Carol Marin: Suppose you eradicate all the drugs in Colombia, all the coca plants, all the opium poppies. Does the war end?

Marc Grossman: Well, I think the war would radically diminish because the FARC, the ELN, and the AUC are funded by narcotics. So what you have now are three kind of international narcotics conglomerates who spend their money on weapons. And so absolutely. One of the things we’d like to do is take the money out of their pockets. And if the money’s out of their pockets, they’d buy less guns, and they’d buy less mortars, and they can do less things. And as you see with the AUC, and I hope also with the ELN they’ve got to come and say alright, let’s talk.

Carol Marin: At the same time you still have a very tiny group of very rich and a very large group of very poor. Doesn’t that fuel the war too?

Marc Grossman: I don’t think so in this case. I don’t say that the FARC or the ELN or the AUC don’t take advantage of people who are outside of society. But I don’t think that the reason there is the FARC, the AUC and the ELN is because of that disparity. And one of the things that we’ve tried hard to work on is to create real economic development in Colombia and as I said to you in a previous question we’ve got the Andean Trade Preferences act, which has been a huge advantage to Colombians and we’re also trying to get more investment into Colombia from American sources. And I think you’ll see economic life there pick up. Again, the last couple of years, 3 percent growth, 3 1/2 percent growth. Colombia is coming back.

Carol Marin: How is that policy toward Colombia changed since 9-11?

Marc Grossman: I think the most important change since 9-11 has been our recognition that what we’re doing with is narco-terrorism and that we needed to expand our capacity in Colombia to defeat narco-terrorism. So what we did after 9-11 is we went to Congress and we said, would you give us some additional flexibility? Would you give us some more authority so that we can train a brigade to protect this Caño-Limon pipeline because that’s terrorism too. And Congress, I think, after September 11th felt that that was a good argument and a right argument. They gave us that flexibility, and I think we’ve succeeded there. So I think 9-11 sharpened the issue of Colombia. And it sharpened the issue so people aren’t whispering, it’s narco-terrorism. People now will say to you, it’s narco-terrorism.

Carol Marin: Is it our economic interest that we protect the most or theirs by our aid?

Marc Grossman: By our aid?

Carol Marin: Yes.

Marc Grossman: We’re protecting Colombian democracy, which is tied up with their economic interests. Again, I think it’s important not to put these things into silos.

Carol Marin: I don’t mean to pigeon hole it. But, at the same time, those are very real pressures. I mean, oil is in our economic interests. A healthy Colombia, you can argue, is in our economic interest. And so when we devise a strategy of foreign policy, aren’t we first looking at what’s in it for us, as well as what’s in it for them?

Marc Grossman: Well, our job is to look at it — my job anyway — from the American point of view. I’m spending American tax dollars. We have Americans there. We have Americans held hostage in Colombia. So we think about what is our responsibility. And our responsibility is to promote and protect the interests of the United States. And I believe that in this case, a successful Colombia — successful politically, economically, all of the ways we’ve talked about [such as] human rights, democracy — is profoundly in the interests of the United States.

Carol Marin: At the same time I think there are critics whom you have heard in the past and I have heard, who say that under the broad banner of terrorism we have a lot more latitude these days to do some of the military things we really want to do but couldn’t before. Is that possibly an outgrowth of 9-11? That terrorism and fighting terrorism gives us more latitude in what we do militarily there or in our military support there?

Marc Grossman: Well, that’s it. That’s exactly what happened. After 9-11 we went to Congress and we said, we need more flexibility.

Carol Marin: But I don’t mean to be argumentative here. But taking the eye off the economic ball a bit –

Marc Grossman: See, I disagree with you. You want to put me in a position that I can only do one thing at one time. And that’s not right. I can expand my training of Colombian military units to protect the Caño-Limon pipeline, and, at the same time, lobby Congress for an extension of the Andean Trade Preferences Act, and, at the same time, work to get Colombia into the World Trade Organization, and, at the same time, work to protect intellectual property rights for American friends in Colombia, and, at the same time, work on democracy and human rights. So we are capable of doing more than one thing at one time. That is what we are doing, and I would argue to you that if you only did one thing at one time you’d doom yourself to failure.

Carol Marin: Is Colombia a failed state?

Marc Grossman: No, Colombia is not a failed state. Colombia is a state that’s in a struggle for its democracy.

Carol Marin: Why do you think so many agencies, so many analysts still call it that?

Marc Grossman: I have no idea. You’d have to ask them. But what I see is, we had a presidential election, we had a peaceful transition to President Uribe. President Uribe has a 70, 75 percent approval rating. He’s done a lot of things here. And so what I see in Colombia is a society committing itself to defend itself. And I see a society that says; we want to live in a democracy. We don’t want to live in a society run by the FARC, the ELN, and the AUC. And we’re prepared to fight for it.

Carol Marin: That is an astonishing approval rate, isn’t it?

Marc Grossman: It is. I think people in Colombia know what the stakes are. And if their choice is I can live in a democracy or I can live in a society run by the FARC, the ELN, and the AUC –

Carol Marin: The leftists and the rightists.

Marc Grossman: — I choose democracy.

Carol Marin: What specifically is the U.S. doing exactly on behalf of economic development?

Marc Grossman: Well, again, I think the most important thing we’re doing is we are supporters of the Andean Trade Preferences Act.

Carol Marin: Would you decode that for me?

Marc Grossman: I’d be glad to. The Andean Trade Preferences Act allows certain sectors in Colombia, textile sector for example, the cut flowers sector in Colombia, to export goods into the United States at low or sometimes zero tariff rates so that they become more competitive. And they’re allowed to do more, make more economic development. I’ll give you an example. Twenty years ago, the cut flower industry in Colombia exported about 200, 250,000 dollars worth of flowers to the United States. That business is now a 600 million dollar a year business. And 80 percent of the people who work in the cut flower business in Colombia are rural women. And so we want Colombians in that sector and in other sectors to be able to sell their goods in the United States. We want you to buy these things so that they don’t have to go into the drug business to feed their families. So we have really focused on the Andean Trade Preferences Act. It was interesting, a couple of years ago, it lapsed for six or seven months while Congress had to renew it. And Colombian businesses and American businesses really hurt. And when we were able to get it renewed there was an immediate uptick in business between Colombia and the United States.

Carol Marin: At the same time, if I sold you a bunch of flowers or a bag of cocaine, the price differential would be pretty astonishing, right?

Marc Grossman: Well, that’s right. But that’s why we are also trying to get people out of the cocaine business because it isn’t just flowers. As I say, we have thousands and thousands of acres in Colombia now under alternative development.

They’re growing things that I hope people in the United States will buy someday, coffee for example. Colombian coffee is one of the great coffees in the world. I know Colombians are working to make sure more people who go to Starbucks or places like Starbucks buy Colombian coffee. And why not?

Carol Marin: You know that the eradication the U.S. is doing and helping doing has also eradicated some regular crops. There’s been some displacement of peasants and farmers. What do we do to solve that?

Marc Grossman: As soon as we hear about it, we pay. We pay people compensation. We move them. And we’ve gotten better and better at this over the years — the intelligence of where these things are, the maps, all these kinds of things. So again, four years ago we were perhaps doing more of this than we are today, but now, if we do make a mistake, we’re the first people to admit it and we pay compensation.

Carol Marin: In the United States do you think Colombia is really on anybody’s radar? I mean we see Afghanistan, we see Iraq. Do we, as Americans, see Colombia?

Marc Grossman: I don’t know. I hope that your program will help people do that. Cause again you have a very courageous person as the center of your film. Certainly where I sit, people are worried about Colombia and think about Colombia. In Congress, we have many, many supporters in the Congress for our policy toward Colombia. And I think there are a lot of people. There are a lot of people who see Colombia and I hope more of them will.

Carol Marin: Ambassador Grossman, thank you very much for being with us on WIDE ANGLE.

Marc Grossman: Thank you very much for the chance.

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Maria Cristina Chirolla is a compelling woman in her mid-fifties: dazzling smile, coiffed hair, dark suit. It’s hard to believe there is a price on her head. We are in her office in the attorney general’s building in Bogotá, a bomb-proof concrete bunker. Chirolla is the head of the unit fighting money laundering — the estimated four billion pounds that Colombia’s drug traffickers make every year in profit.

Surrounded by aides and a press spokesman, she talks about their new policy of seizing the properties and businesses of drug traffickers. With generous aid and advice from the U.S., they are making real progress in the war on drugs, re-establishing the rule of law; this is the official story of success in the drugs war, a story questioned by the simple market fact that the price of drugs has done little but drop since the war began.

Glancing around, I see a familiar face over her desk. “Why do you have Kafka on the wall?” I ask. Chirolla smiles but goes on with her story. Half an hour after we leave, my producer Guillermo’s mobile rings. It is Chirolla inviting herself to dinner. She turns up at our hotel in jogging pants, the makeup gone. “I’ll just have a soup, I am on a diet.” Passionate, committed, and frightened — for three hours she overwhelms us with her honesty about the scale of the problem. “How can we destroy an industry that generates enough money to enable the drug cartels to have private armies? How do we fight people who can afford the best lawyers and financial advisers? For 25 years, billions of dollars have been laundered back into the legal economy at every level and we can no longer trace the difference.” She unravels the nightmare that is government in Colombia. You can trust no one. The traffickers have people everywhere from the very top to the very bottom — their money can bribe almost anyone. And if they cannot buy, they kill — a habit that has turned Colombia into one of the most dangerous places on earth. An assassin can be hired for 60 pounds a hit. When every kilo of cocaine sold on the streets of the U.S. has a 30,000-dollar profit margin, 60 pounds seems like not much to pay for a life.

We are filming Chirolla when she hears that two men have been caught planning to assassinate her. The hit should have taken place when we were with her, traveling on what was supposed to be a secret mission to raid the property of a trafficker. “Everything leaks here,” she moans. Days later she learns that a terrorist cell has been set up by drug traffickers to target her. The cell is based in an army officer’s club in Bogotá.

Why does she do the job? “Because Colombia needs honest people. It is so hypocritical: my country is seen as the world center of violence and corruption — but the money comes from a demand for drugs in the United States and Europe.” The price of her honesty is a life of almost constant fear. Once again, at the heart of the battle with cocaine is U.S. dollars.

Plan Colombia, the biggest U.S. aid package to any country outside the Middle East, has seen almost 3 billion dollars poured into largely military resources over the past five years. The plan’s initial aim was to destroy the cocaine industry at its source, as in Peru, but now an astute right-of-center Colombian government has persuaded President Bush to let them use the money in their long-running battle with the left-wing FARC guerrillas, on the grounds that they are involved in the cocaine trade. So the war on drugs is cleverly drawn into the war on terror. But the causes of Colombia’s civil war have nothing to do with drugs. The war has being going on for over half a century, and huge swathes of the country are outside government control. You cannot drive safely between most cities.

Rooted in the revolutionary politics of 50 years ago, the war is still described in terms of left and right. In most of the rest of Latin America such full-scale ideological conflicts died away with the Cold War. In Colombia cocaine money keeps that war alive. The various factions have taken over from the big cartels — the right-wing paramilitaries even more than the guerrillas. The paramilitaries are the real controllers of the drug trade and getting to meet them involves negotiating permission to enter their territory.

After a flight to the north and a long drive through glorious cattle country, we are greeted at a ranch by a local commander — code name Zero 8 — accompanied by his pet leopard. Zero 8 is from an educated landowning family. His brother, I learn later, is a senator in Colombia’s congress. Zero 8 won’t appear on camera but we are free to film the 300 armed troops parading on the football pitch. “We provide our 25,000 troops with proper pay and even holiday leave,” he says proudly. He reminisces about how he joined the paramilitaries to defend his family farm from the guerrillas. The paramilitaries are allies of the government, he argues, rooting out left-wing subversion. I recall the reports of massacres and murders of trade unionists that have been laid at their door.

After dark, their leader turns up, surrounded by Uzi-toting bodyguards. Salvatore Mancuso, wearing a white linen shirt, Rolex, revolver, and dangerous smile, is exactly how I imagined a major trafficker. While his subordinates are shy about their involvement with cocaine, Mancuso is not: ‘Seventy percent of our troops are in territories that we have taken from the guerrillas in which drug trafficking takes place — so 70 per cent of our money comes from our tax on drug trafficking.” Like Chirolla, Mancuso believes cocaine is a gringo problem visited on Colombians from outside. “If they did not demand it, we would not supply it.”

And supply it they do. Back with Maria Cristina Chirolla, we travel in a confiscated fast-boat powered by three 250 horsepower engines. The naval officer in charge describes how “this boat packed with cocaine leaves the Colombian coast worth 100,000 pounds and arrives in Mexico worth some 10 million”. He explains how planes hop at tree level across Central America and “of course there is the specially made submarine which is working a route up the Pacific coast”. It is made clear that the paramilitaries control these routes north.

Despite this, the government is now in peace talks with the paramilitaries. The Colombian congress invited Salvatore Mancuso to address them on the subject of the war against subversion. Under government protection, he turned up in his suit to address the Congress on his troops’ achievements. He did not mention drugs. Some of his men are now taking advantage of a new law giving a sort of amnesty — but none of the money made and few of the crimes committed have to be admitted. While a wanted drug trafficker addresses the Colombian Congress, and the U.S. administration claims Plan Colombia is a success, a million Colombians are displaced and the price of cocaine on Western streets stubbornly remains the same. That price is determined by supply. In his book COCAINE, Dominic Streatfield quotes the monetarist Milton Friedman: “I do not think you can eradicate demand. The lesson we have failed to learn is that prohibition never works. It makes things worse not better.”

Streatfield quotes the extraordinary statistics involved in fighting cocaine and drugs. Here are a couple: over the past 15 years, the U.S. has spent 220 billion dollars trying to stop its people getting hold of drugs. In the U.S. almost 20 percent of the prison population is inside for drugs offences. Thirty years of the war on drugs have achieved almost nothing except to make a few people fantastically rich, to arm our inner cities, to criminalise a generation of users, and to leave tens of thousands of Latin Americans dead. As our cocaine maker in Peru happily told us: “People want our cocaine because it is good and, for a while at least, makes them happy.”

by Mary Roldán

September 16, 2004

In a 2004 television ad campaign intended to raise people’s awareness about the plight of two million Colombian citizens, black-and-white images of displaced people float like ghosts. A homeless mother asks an impassive, oblivious female driver for money, while business-suit-clad pedestrians barrel briskly along crowded city streets, indifferent to the pleas of these desperate wanderers, selling fruit, chewing gum, or cheap gewgaws. “Somos desplazados” (we are displaced) read the crude cardboard signs that bear silent witness to this humanitarian tragedy.

These people — some five percent of Colombia’s 42 million people — make up the largest internally displaced population in the Western hemisphere, and the largest in the world in a country not officially at war. Many of the displaced are Afro-Colombians or people of indigenous descent, others simply farmers or small-town residents — the majority women and children — who had made their homes in areas marked by continuing struggles over land, resources and labor, where the government has historically exercised little control.

While rural Colombians have long suffered the consequences of an inequitable distribution of land and wealth — at mid-century, half of Colombia’s land was owned by three percent of its population — the current situation has its roots in the period of extended civil conflict known simply as “La Violencia” (the violence), that grew out of a struggle for power between the country’s Liberal and Conservative Parties in the 1940s and 1950s. Two hundred thousand Colombians died, more than a million lost their properties, and nearly two million were forced to migrate during the ensuing violence. La Violencia eventually came to encompass both criminal banditry and socially motivated peasant mobilizations, and in some cases, provided the nucleus for the emergence of armed guerrilla groups such as the FARC.

With the rise of the cocaine trade in the 1970s, newly minted narco-millionaires invested illicitly obtained profits in massive land purchases, often in the very areas where longstanding conflicts between guerrillas, ranchers, and multinational companies were concentrated, further destabilizing the lives of Colombia’s peasants. To protect their assets from guerrilla extortion, traffickers recruited, armed and paid private security forces, many of whom evolved into paramilitary operatives. Rural inhabitants in particularly contested parts of the Colombian countryside became the unwitting obstacles — or reluctant participants — in the expanding territorial struggle between insurgent groups and government forces.

A Bolivian baby chews on a coca leaf. Coca can be harvested for legal purposes such as chewing and pharmaceutical use as well as for cocaine production.

BBC News: Country Profile: Bolivia
http://news.bbc.co.uk/2/hi/americas/country_profiles/1210487.stm
The news organization’s broad overview of Bolivia, featuring a timeline of the nation’s history; data on Bolivia’s population, languages, and economy; and a profile of the country’s current president, Gonzalo Sánchez de Lozada.

Library of Congress: Country Study: Bolivia
http://memory.loc.gov/frd/cs/botoc.html
From a series of books prepared by the Federal Research Division of the Library of Congress. Features articles and information on Bolivia’s history, economy, government, transportation, national security issues, foreign relations, natural resources, manufacturing, justice system, and more.

BBC News: Bleak Future for Bolivia’s Economy
http://news.bbc.co.uk/1/hi/business/1400337.stm
Traces a crash in the Bolivian economy that began sometime in the late 1990s, and the government’s response to the crisis. Suggests the situation was exacerbated by the government’s unwillingness to recognize the problem early on.

Bolivia Web
http://www.boliviaweb.com/
“The Largest Bolivian Community on the Web” includes features on Bolivian history, cooking, photographers, poets, maps, travel information, and more. Links are provided to sites with information on Bolivia’s government, education system, economy, and the latest Bolivian news.

Guardian Unlimited: Let Latin America Find its own Path
http://www.guardian.co.uk/argentina/story/0,11439,769413,00.html
An article addressing recent economic troubles in Latin American countries, including the crisis in Argentina, riots in Uruguay, Peru, and Paraguay, and the history of free market economies in region.

Washington Post: Bolivia Articles
http://www.washingtonpost.com/wp-dyn/world/americas/southamerica/bolivia/
A collection of articles dating back to 2000 featuring the POST’s coverage of Bolivia, as well as related regional news stories. Includes additional resources on Bolivia.

Washington Post: Colombia’s Civil War
http://www.washingtonpost.com/wp-dyn/world/issues/colombiareport/
A collection of articles featuring the POST’s coverage of Colombia, with particular attention paid to the nation’s role as a key battleground in the U.S.-sponsored war on drugs.

In 2006 Chinese military spending surpassed that of Japan for the first time, while as late as 1999, Chinese military spending was only half of that of Japan. (Source: www.sipri.org)

Global military expenditures for select countries in 2006, as percentage of gross domestic product (GDP)

While the U.S. spends 4% of its GDP on its military, Japan’s spending has only recently surpassed 1% of its GDP.