Order Code RL31383
CRS Report for Congress
Received through the CRS Web
Andean Regional Initiative (ARI):
FY2002 Supplemental and FY2003 Assistance
for Colombia and Neighbors
April 23, 2002
K. Larry Storrs
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Nina M. Serafino
Specialist in International Security Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Andean Regional Initiative (ARI):
FY2002 Supplemental and FY2003 Assistance
for Colombia and Neighbors
Summary
Congress is considering President Bush’s requests for new funding and additional
authority to provide assistance to Colombia and six regional neighbors in a
continuation of the Andean Regional Initiative launched in 2001. As of April 19,
2002, FY2002 funds for Colombia’s military and for aerial fumigation are on hold
until certain certifications are made regarding human rights and safety as required in
the FY2002 Foreign Operations Appropriations Act (P.L. 107-115).
On February 4, 2002, President Bush submitted a FY2003 budget request that
would provide $979.8 million for the Andean Regional Initiative (ARI), with $731
million in counternarcotics assistance under the Andean Counterdrug Initiative (ACI).
This request includes $537 million in ARI funding for Colombia, with $439 million
in ACI funding and $98 million in Foreign Military Financing (FMF) to train and
equip a Colombian army brigade to protect an oil pipeline in northeastern Colombia.
It also includes $186.6 million in ARI funding for Peru (with $135 million in ACI
funds); $132.6 million in ARI funding for Bolivia (with $91 million in ACI funds); and
$65.1 million for Ecuador (with $37 million in ACI funds). Lesser amounts were
requested for Brazil, Panama, and Venezuela.
On March 21, 2002, the Bush Administration proposed an Emergency FY2002
Supplemental for counter-terrorism purposes that included a request for $4 million
of State Department international narcotics control (INC) funding for Colombia
police post support, $6 million of FMF funding for Colombia and $3 million for
Ecuador for counter-terrorism equipment and training, and $25 million of
Nonproliferation, Anti-Terrorism and Demining funding for counter-kidnapping
training in Colombia. Also included in the submission were requests to broaden the
authorities of the Defense and State Departments to utilize FY2002 and FY2003
assistance and unexpended Plan Colombia assistance to support the Colombian
government’s “unified campaign against narcotics trafficking, terrorist activities, and
other threats to its national security.” Proponents of the Administration’s requests
argue that, in the context of the global war on terrorism, Colombia and the region
should be supported with counter-terrorism assistance before Colombia’s violence
worsens and endangers other countries. They note that the country’s leftist guerrillas
have demonstrated little willingness to negotiate peace. Critics argue that
counterinsurgency and anti-terrorism assistance would thrust the United States into
a major guerrilla conflict on the side of the Colombia armed forces with links to
rightist groups guilty of extensive human rights abuse.
Another aspect of the Andean Regional Initiative was President Bush’s request
in 2001 for the extension and broadening of the Andean Trade Preferences Act
(ATPA) to give duty free or reduced-rate treatment to the products of Bolivia, Peru,
Ecuador and Colombia. While the House passed H.R. 3009 in late 2001 to extend the
ATPA through 2006, action by the full Senate is still pending. When President Bush
met with Andean leaders during his trip to Peru on March 23, 2002, extension of the
Andean Trade Preferences Act was a major topic of discussion.

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Contents
President Bush’s Andean Regional Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Past Request for FY2002 Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Hold on Certain FY2002 Funding for Colombia . . . . . . . . . . . . . . . . . 3
Current Request for FY2003 Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Request for Emergency FY2002 Supplemental Aid . . . . . . . . . . . 5
Pending Request for Extension of Andean Trade Preference Act (ATPA) . 6
Situation in Colombia and Neighboring Countries . . . . . . . . . . . . . . . . . . . . . . . 6
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Funding and Requests for Colombia . . . . . . . . . . . . . . . . . . . . . . . . . 11
Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Funding and Requests for Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Bolivia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Funding and Requests for Bolivia . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Funding and Requests for Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Funding and Requests for Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Funding and Requests for Venezuela . . . . . . . . . . . . . . . . . . . . . . . . 18
Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Funding and Requests for Panama . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Major Legislative Activity in 2002 on Andean Regional Initiative Issues . . . . . 19
Foreign Relations Authorization, FY2002-FY2003 . . . . . . . . . . . . . . . . . 19
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Extension of Andean Trade Preference Act (ATPA) . . . . . . . . . . . . . . . . . 21
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix A. Map Showing Andean Regional Initiative Countries . . . . . . . . . . 22
Appendix B. U.S. Assistance to Colombia FY2000-FY2003 . . . . . . . . . . . . . . 23
Appendix C. Bush Administration’s Andean Regional Initiative (ARI) FY2002
Request and FY2002 Allocations by Purpose and by Functional Accounts 25
Appendix D. Andean Regional Initiative (ARI) FY2003 Request by
Purpose and Functional Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

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Andean Regional Initiative (ARI):
FY2002 Supplemental and FY2003
Assistance for Colombia and Neighbors
In 2002, Congress is considering President Bush’s request for additional funding
and additional authority to provide assistance to Colombia and six regional neighbors
in a continuation of the Andean Regional Initiative that was launched in 2001.1 The
region has been viewed as important primarily because it produces virtually all of the
world’s cocaine and increasing amounts of heroin. Moreover, the stability of
Colombia and the region is threatened by Colombia’s longstanding guerrilla
insurgency and rightist paramilitary groups, which are both believed to be largely
funded by “taxes” on illegal narcotics cultivation and trade.
President Bush’s Andean Regional Initiative
Past Request for FY2002 Assistance
The Andean Regional Initiative (ARI) was launched in April 2001, when the
Bush Administration requested $882.29 million in FY2002 economic and
counternarcotics assistance, as well as an extension of trade preferences and other
measures, for Colombia and six regional neighbors (Peru, Bolivia, Ecuador, Brazil,
Panama, and Venezuela). Of this amount, $731 million was designated as
International Narcotics Control (INC) assistance in a line item in the budget request
known as the Andean Counterdrug Initiative (ACI). A central element of the program
has been the training and equipping of counternarcotics battalions in Colombia.
According to the Administration, the distinctive features of the program,
compared to Plan Colombia assistance approved in 2000,2 are that a larger portion of
the assistance is directed at economic and social programs, and that more than half of
1This report draws from CRS Report RL31016, Andean Regional Initiative (ARI): FY2002
Assistance for Colombia and Neighbors, by K. Larry Storrs and Nina M. Serafino, which
provides more background on the ARI and covers congressional action in 2001.
2“Plan Colombia” refers to the $1.3 billion in FY2000 emergency supplemental appropriations
approved by the 106th Congress in the FY2001 Military Construction Appropriations bill
(H.R. 4425, P.L. 106-246) for counternarcotics and related efforts in Colombia and
neighboring countries. There was no limitation on the fiscal year in which the funding could
be obligated or spent; see Appendix C for a chart on the obligation of this and other funding
to Colombia in FY2000 and FY2001. For more detail, see CRS Report RL30541, Colombia:
Plan Colombia Legislation and Assistance (FY2000-FY2001).

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the assistance is directed at regional countries experiencing the spill-over effects of
illicit drug and insurgency activities. Another aspect of the initiative was President
Bush’s request for the extension and broadening of the Andean Trade Preferences Act
(ATPA) expiring in December 2001, that would give duty free or reduced-rate
treatment to the products of Bolivia, Peru, Ecuador and Colombia. This was a central
topic when President Bush met with Andean leaders at the Summit of the Americas
meeting in Canada in April 2001.
In a mid-May 2001 briefing on the Andean Regional Initiative, Administration
spokesmen set out three overarching goals for the region that could be called the
three D’s – democracy, development, and drugs. The first goal was to promote
democracy and democratic institutions by supporting judicial reform, anti-corruption
measures, human rights improvement, and the peace process in Colombia. The
second was to foster sustainable economic development and trade liberalization
through alternative economic development, environmental protection, and renewal of
the Andean Trade Preference Act (ATPA). The third was to significantly reduce the
supply of illegal drugs to the United States from the source through eradication,
interdiction and other efforts.3 Under consideration by the Congress in 2001, critics
of the initiative argued that it overemphasized military and counter-drug assistance,
and provided inadequate support for human rights and the peace process in Colombia.
Supporters argued that it continued needed assistance to Colombia, while providing
more support for regional neighbors and social and economic programs.
By the end of 2001, Congress approved, in the Foreign Operations
Appropriations Act (H.R. 2506/P.L. 107-115), $625 million for the ACI, $106 million
less than the President’s ACI request. Also included were a series of conditions and
certification requirements relating to human rights and to the controversial aerial
eradication spraying (also known as aerial fumigation) program to destroy illicit coca
crops, and an alteration of the cap on military and civilian contractors serving in
Colombia.
As detailed in the February 2002 budget submissions, the Bush Administration
has allocated $782.82 million in FY2002 assistance to the ARI, of which $645 million
was for the ACI account, including $20 million transferred from the general
International Narcotics Control account.4 While the House passed H.R. 3009 in late
2001 to extend the Andean Trade Preference Act through 2006, action in the Senate
was not completed.
Hold on Certain FY2002 Funding for Colombia. As of mid-April 2002,
all assistance provided to the Colombian armed forces under the FY2002 and prior
foreign operations appropriations acts was on hold, awaiting the Secretary of State’s
certification to Congress that the armed forces were meeting three human rights
3See U.S. Department of State International Information Programs Washington File, Fact
Sheet: U.S. Policy Toward the Andean Region, and Transcript: State Department Briefing on
Andean Regional Initiative, May 17, 2001, also available at the following website
[http://usinfo.state.gov/regional/ar/colombia/].
4See CRS Report RL31016, Andean Regional Initiative: FY2002 Assistance for Colombia
and Neighbors, for details on the aid conditions and levels of assistance.

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CRS-3
conditions, as required by Section 567(a) of the FY2002 Foreign Operations
Appropriations Act (P.L. 107-115).5 Under provisions of that act, funds for aerial
coca fumigation programs are also on hold until the Secretary of State reports to the
appropriations committees that such fumigation is being carried out under EPA
regulatory controls applicable in the United States, that the chemicals and their
manner of application do not pose unreasonable risks to or result in adverse effects
on people or the environment, that the spray is in accordance with Colombian law,
and that compensation procedures are in place for damages. The Administration will
lose authority to continue aerial fumigation spraying in Colombia after June 10, 2002,
unless and until alternative development programs have been put in place. According
to State Department officials, these matters are still under study.
Current Request for FY2003 Assistance
On February 4, 2002, President Bush submitted a FY2003 budget request for the
Andean region that would provide about $979.8 million for the Andean Regional
(ARI) Initiative, including $731 million in counternarcotics assistance under the
Andean Counterdrug Initiative (ACI), with some ACI funds being used for social and
economic programs. The FY2003 request is similar to the FY2002 request, except
that the Administration is requesting $98 million in Foreign Military Financing (FMF)
for Colombia to train and equip a Colombian army brigade to protect the Cano-Limon
oil pipeline in northeastern Colombia. The request marked a sharp break with
previous policy towards Colombia, as it was the first request for military assistance
provided specifically for a purpose other than counternarcotics operations. The
Administration is also requesting $1 million each for Bolivia, Ecuador, Panama, and
Peru in FY2003 FMF funding.
Requested FY2003 foreign operations funding of $979.8 million for ARI,
including $731 million for ACI, is to be distributed as follows in descending order:6
! Colombia: $537 million in ARI funding, including $439 million in ACI funding
and $98 million in FMF funding.
! Peru: $186.6 million in ARI funding, including $135 million in ACI funding
and $1 million in FMF funding.
! Bolivia: $132.6 million in ARI funding, including $91 million in ACI funding
and $1 million in FMF funding.
5These criteria are (1) that the Colombian Commander General is suspending soldiers and
officers credibly alleged to have committed gross violations of human rights or to have aided
or abetted paramilitary groups; (2) that the Colombian armed forces are cooperating with
civilian prosecutors and judicial authorities in prosecuting and punishing in civilian courts any
members credibly alleged to be involved in such offenses; and (3) that the Colombian armed
forces are taking steps to sever links with paramilitary groups and to execute outstanding
orders for the capture of their members.
6Other funding, for Department of Defense activities in the Andean Region, is requested as
part of the DOD counternarcotics account, which funds DOD counternarcotics activities
worldwide. A breakdown of intended allocations of that account does not become publically
available until after DOD funds are appropriated.

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! Ecuador: $65.1 million in ARI funding, including $37 million in ACI funding
and $1 million in FMF funding.
! Brazil: $29.5 million in ARI funding, including 12 million in ACI funding.
! Panama: $20.5 million in ARI funding, including $9 million in ACI funding and
$1 million in FMF funding.
! Venezuela: $8.5 million in ARI funding, including $8 million in ACI funding
Proponents of the Administration’s request argue in the context of the post-
September 2001 war on terrorism that Colombia and the region should be supported,
and they have urged the Administration to seek expanded authority to provide support
for an expansion of activities.7 On March 6, 2002, the House passed H. Res. 358
expressing the sense of the House of Representatives that “the President, without
undue delay, should transmit to Congress for its consideration proposed legislation,
consistent with United States law regarding the protection of human rights, to assist
the Government of Colombia protect its democracy from United States-designated
foreign terrorist organizations and the scourge of illicit narcotics.”

Critics argue that the new request would expand the U.S. military role in
Colombia, now strictly limited to counternarcotics, into a problematic
counterinsurgency one. Critics who emphasize human rights considerations argue
that such a role would inevitably involve tolerance of the linkages between the
Colombian military and paramilitary groups which are responsible for gross violations
of human rights. (A particular concern is the lifting of human rights conditions
concerning paramilitary groups in the FY2002 supplemental request, see below.)
Others, who believe U.S. military power should not be committed unless it can be
effective, warn that the proposed assistance falls far short of that required to have any
significant effect on the situation in Colombia. Many also worry that the United
States is slowly being drawn into a Vietnam-like morass, providing assistance to a
government that does not have the credibility and political will to pay for and
successfully wage its own war, and conclude a just peace.
7For critical comments, see statements on the Center for International Policy’s Colombia
Project website [http://www.ciponline.org/colombia/] under CIP Analyses, under U.S.
Military and Police Aid (especially Other Groups’ Analyses) and under U.S. Government
Information (especially Legislators). For supportive comments, see statements on the same
website under U.S. Military and Police Aid (especially Other Groups’ Analyses), and U.S.
Government Information (especially statements from Officials and Legislators).

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Current Request for Emergency FY2002 Supplemental Aid
On March 21, 2002, the Bush Administration requested $27.1 billion in
Emergency FY2002 Supplemental Assistance, which was mostly to support
Department of Defense and Homeland Security counter-terrorism efforts, but would
also provide additional funding and authorities relating to Colombia and the Andean
Region. Included in this submission was a request for $4 million of INC funding for
Colombia police post support, $6 million of FMF funding for Colombia for
infrastructure security and $3 million for Ecuador for counter-terrorism equipment
and training, and $25 million of Nonproliferation, Anti-Terrorism and Demining
funding for a counter-kidnapping program for members of Colombia’s police and
armed forces.
The submission also included a request for up to $100 million in Department of
Defense funding for defense articles, services, and training to be used worldwide “to
support foreign nations in furtherance of the global war on terrorism, on such terms
and conditions as the Secretary of Defense may determine . . . “ and for $30 million
to assist “indigenous” forces. Although the request contained no indication that the
Administration intended to use any of these funds for Colombia or any other ARI
country, critics feared the precedent that would be set by granting such assistance.
Such funds, they argued, could be used by the Department of Defense to carry out
foreign security assistance programs free of the Congressionally-mandated controls
on State Department programs.
The supplemental submission proposes to broaden the authorities of the Defense
and State Departments to utilize FY2002 and FY2003 assistance and unexpended
Plan Colombia assistance to support the Colombian government’s “unified campaign
against narcotics trafficking, terrorist activities, and other threats to its national
security.” According to the Administration’s explanation, these provisions “would
allow broader authority to provide assistance to Colombia to counter the unified
‘cross-cutting’ threat posed by groups that use narcotics trafficking to fund their
terrorist and other activities that threaten the national security of Colombia.”
Such a change would allow the Administration to expand the scope of U.S.
assistance, particularly military assistance, to Colombia, allowing State and Defense
department funds to assist the Colombian government to counter any threat to its
national security. The immediate, and widely discussed, effect of this change would
be to allow the U.S. government to broaden the circumstances under which it
currently shares intelligence with Colombian security forces, providing intelligence not
only for counterdrug operations, but also for military operations against the
Colombian guerrillas and paramilitaries. The change would also permit the Plan
Colombia helicopters and other equipment that the United States has provided to be
used for such purposes.
The “Leahy Amendment” conditions in the foreign operations and defense
appropriations legislation forbidding assistance to military and police units credibly
alleged to engage in gross violations of human rights would continue to apply, as
would the current caps of 400 each on the number of U.S. civilian contractors and
U.S. military personnel in Colombia. The Administration’s proposed legislation does
not include conditions like those of Section 567 of P.L. 107-115, the FY2002

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CRS-6
Foreign Operations Appropriations Act, which has stiffer provisions regarding human
rights violations by security forces, and also requires the armed forces to address the
continuing links of some of its members with illegal rightist paramilitary groups. Nor
does it mention the continuation of P.L. 107-115 conditions regarding aerial
fumigation spraying and alternative development.
For further discussion on U.S. policy towards Colombia, see the section on
Colombia, below.
Pending Request for Extension of Andean Trade Preference
Act (ATPA)
Another aspect of the Andean Regional Initiative was President Bush’s request
in 2001 for the extension and broadening of the Andean Trade Preferences Act
(ATPA) that expired in December 2001, that would give duty free or reduced-rate
treatment to the products of Bolivia, Peru, Ecuador and Colombia. The countries are
looking for parity with Central American and Caribbean preferences, provided in the
U.S.-Caribbean Trade Partnership Act approved in 2000, in order to prevent a
diversion of trade and investment from the Andean region to Central America or the
Caribbean.8 While the House passed H.R. 3009 in late 2001 to extend the ATPA
through 2006, action by the full Senate is still pending. Without congressional action
the Act expired on December 4, 2001, but on February 15, 2002, the Administration
implemented a 90-day deferral of duties to stay increased tariff burdens. When
President Bush met with Andean leaders during his trip to Peru on March 23, 2002,
extension of the Andean Trade Preferences Act was a major topic of discussion.
Situation in Colombia and Neighboring Countries
The Andean Regional Initiative is designed to provide assistance to seven
countries in the broadly defined Andean region9, or what the Administration has called
the Andean Ridge: Bolivia, Brazil, Colombia, Ecuador, Panama, Peru, and Venezuela.
The ARI built on the Clinton Administration’s 2000 “Plan Colombia” legislation,
which sought to address the increasing cultivation of coca and heroin crops in
Colombia through the creation of a Colombian Army counternarcotics brigade, and
sharply increased assistance for eradication and alternative development programs in
the country’s two southern provinces of Putumayo and Caquetá, the region where
illegal coca production and a leftist guerrilla presence was expanding most rapidly.
The ARI expanded assistance to help counter possible spill-over effects in six nearby
8For information on ATPA see CRS Report RL30790, The Andean Trade Preference Act:
Background and Issues for Reauthorization, by J.F. Hornbeck. For information on the U.S.-
Caribbean Trade Partnership Act and other regional free trade agreements, see CRS Issue
Brief IB95017, Trade and the Americas, by Raymond J. Ahearn.
9Panama and Brazil are not normally considered to be part of the Andean region; Bolivia is
an Andean country but it does not share a border with Colombia. For usage of the term
“Andean Ridge” see citations under Plan Colombia on the website of the State Department’s
International Information Programs [http://usinfo.state.gov/regional/ar/colombia/].

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CRS-7
countries: Peru and Bolivia, where past successes in reducing cocaine production
could be threatened by expected progress in eradicating crops in Colombia; Ecuador,
the most exposed neighbor because of its border with Colombia’s Putumayo province;
and Brazil, Venezuela and Panama, where the threat is primarily confined to common
border areas with Colombia. In early 2002, there is increased concern among
Colombia’s neighbors as the Colombian conflict escalates following the breakdown
of peace talks between the government and the country’s largest leftist guerrilla
group.10
The region is important to the United States not only because it includes the
three major drug producing countries (Colombia, Bolivia, and Peru) where virtually
all the world’s cocaine and 60% of the heroin seized in the United States are
produced, but also two major oil producing countries (Venezuela and Ecuador) which
supply significant quantities of oil to the United States and are members of the
Organization of Petroleum Exporting Countries (OPEC). While the designated
countries have diverse trading relationships, the United States is the major trading
partner by far for all of them. For the five traditional Andean countries (Colombia,
Venezuela, Ecuador, Peru, and Bolivia) the Andes mountain range that runs through
South America poses geographical obstacles to intra-state and inter-state integration,
but the countries are linked together in the Andean Community economic integration
pact. The ARI countries are some of the most heavily populated in Latin America,
including the first (Brazil), third (Colombia), fifth (Peru), sixth (Venezuela), and
eighth (Ecuador) most populous. Although Colombia and Venezuela have largely
European-Indian mixed race (mestizo) populations, Bolivia, Peru, and Ecuador have
significant indigenous populations.
Colombia
Colombia’s spacious and rugged territory, whose western half is transversed by
four parallel mountain ranges, provides ample isolated terrain for drug cultivation and
processing, and contributes to the government’s difficulty in exerting control
throughout the nation. With a population of 40.3 million, Colombia is the third most
populous country in Latin America after Brazil and Mexico, with a largely mixed race
(mestizo) population. It is known for a long tradition of democracy, but also for
continuing violence, including guerrilla insurgency dating back to the 1960s, and
persistent drug trafficking activity. Negotiated settlements were achieved with some
of the guerrilla groups in the 1980s, but fell apart by 1990 when former guerrilla
leaders and members participating in political activities were assassinated. Recent
administrations have had to deal with a complicated mix of leftist guerrillas, rightist
paramilitary (or “self-defense”) forces, both associated with many groups of
independent drug traffickers.
10For more information on the reactions of Colombia’s neighbors to events in Colombia, as
of mid-2001, see Judith A. Gentleman. The Regional Security Crisis in the Andes: Patterns
of State Response. Publication of the Strategic Studies Institute, U.S. Army War College, and
the Dante B. Fascell North-South Center, University of Miami. July 2001. This can be
accessed on the web through publications on Latin America at [http://carlisle-
www.army.mil/usassi/welcome.htm].

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CRS-8
President Andres Pastrana was elected and inaugurated in 1998 for a four year
term largely on the basis of pledges to bring peace to the country by negotiating with
the guerrillas, strengthening the Colombian military and counternarcotics forces, and
seeking international support for these efforts and other reforms to address the
country’s unusually serious economic difficulties.11 Months after he was inaugurated,
Pastrana’s administration initiated peace talks with the country’s largest guerrilla
group, of some 17,000 - 20,000 combatants, the Revolutionary Armed Forces of
Colombia (FARC), and subsequently participated in more informal tripartite talks with
representatives from the smaller 3,000 - 5,000 member National Liberation Army
(ELN) and civil society groups.
In 1999, President Pastrana, with U.S. assistance, developed a $7.5 billion plan
called Plan Colombia, with $4 billion to come from Colombia and $3.5 billion from
international donors, but funding from Colombia and the international community fell
far short of those goals. In response to Colombian requests, the Clinton
Administration developed and the U.S. Congress approved a $1.3 billion package of
assistance in 2000, also called Plan Colombia assistance. Some $860.2 million or
67% of this assistance was to support programs in Colombia, with $416.9 million for
helicopters, training, and other assistance to three Colombian Army counternarcotics
battalions. This plan was targeted mainly at Colombia and expenses for big ticket
items were weighted toward support for counternarcotics activities, although there
was funding for alternative development and governance programs (mostly to support
counternarcotics objectives) and human rights programs, and conditions to encourage
an improvement in the military’s human rights performance.12
President Pastrana’s term expires in August 2002. The two leading candidates
in the May 26, 2002 elections to succeed him (with a possible run-off in June) are
independent Alvaro Uribe, and the Liberal Party candidate Horacio Serpa. Colombia’s
next President is likely to take office amid a still escalating conflict with the FARC,
intensified by Pastrana’s decision on February 20, 2002, the day after the FARC and
the government had exchanged cease-fire proposals, to terminate the peace talks with
that group. Pastrana’s decision was prompted by the FARC’s hijacking of an airliner
and kidnapping of a Colombian Senator on the plane, the fifth national legislator to
be taken in eight months. The decision took place in the midst of an intensification
of guerrilla actions, including infrastructure sabotage. Days later, FARC kidnapped
another Colombia Senator who is also a presidential candidate with a small following.
The new President most likely will face decisions concerning the continuation of
the U.S.-supported “Plan Colombia” eradication and alternative development program
in Putumayo and Caquetá, which is highly controversial in both Colombia and the
United States. The eradication spraying by the U.S. funded counternarcotics brigade
11For information on the multi-faceted conditions in Colombia, see CRS Report RL30330,
Colombia: Conditions and U.S. Policy Options, by Nina M. Serafino.
12For information on U.S. “Plan Colombia” assistance in FY2000-FY2001, including all
Congressional action and congressionally imposed conditions, see CRS Report RL30541,
Colombia: Plan Colombia Legislation and Assistance (FY2000-FY2001), by Nina M.
Serafino. This report also contains charts detailing U.S. assistance to Colombia since 1989.

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CRS-9
in Putumayo beginning in December 200013 caused social and political turmoil in
Colombia, with critics alleging it destroyed legal crops as well as illicit coca, and
caused people and animals to suffer ill health. Another problem is the Colombian
government’s failure to deliver much of the promised $800 worth of farming inputs
to the 38,000 families in 33 municipalities who signed voluntary eradication pacts.
According to accounts in early 2002, less than a third of those families have received
any compensation and many are still growing coca. Reports also indicate that many
Putumayo farmers do not intend to voluntarily eradicate coca before the July 2002
deadline14 This has led many, including U.S. government officials, to conclude that
the alternative program is, at best, in great difficulty.
In a February 2002 report, the U.S. General Accounting Office pointed out that
AID’s expansion of alternative development projects to coca-growing areas in 2001
face “serious obstacles,” most importantly inadequate security in coca-growing areas,
where the Colombia government lacks control, and the government has “limited
capacity to carry out sustained interdiction operations.”15 The GAO report cast doubt
whether AID would be able to fulfill its goal of achieving dramatic reductions of
11,500 hectares (almost 29,000 acres) in coca cultivation in 2002 through voluntary
eradication of coca crops. Another difficulty is that the soil in Putumayo has been
found to be too poor to support the number currently farming in that province if all
were growing legal crops. The State Department reportedly has decided to shift some
funds from alternative development to infrastructure projects that would provide jobs
elsewhere.16
Some policymakers argue, however, that neither the eradication nor the
alternative development program should be abandoned, but that they should be given
the time and conditions necessary to work. In its response to the GAO, incorporated
as an appendix to the GAO report, AID pointed out that alternative development
programs do not achieve drug crop reduction on their own, and that the Colombia
program was designed to support the aerial eradication program and to build “the
political support needed for aerial eradication efforts to take place.” It claimed that
the 84,000 hectares (over 207,000 acres) of coca that were sprayed in Colombia in
2001 represented a level unprecedented in new eradication programs. Despite this,
the State Department announced in March 2002 that coca cultivation in Colombia had
increased 25% in 2001, although in December 2001 the Colombian government had
estimated a 25% drop in cultivation that year.17
13The two Army counternarcotics battalions funded by Plan Colombia were trained and
operating by the spring of 2001. The first commenced operations in December 2000.
14Susannah A. Nesmith. Anti-drug Crop Plan in Doubt, Study Says Cocaine Growers in
Colombia Seen with Few Choices. The Boston Globe. April 4, 2002. p A24.
15U.S. General Accounting Office. GAO-02-291. Drug Control: Efforts to Develop
Alternatives to Cultivating Illicit Crops in Colombia Have Made Little Progress and Face
Serious Obstacles. February 2002.
16T. Christian Miller. In Colombia, Anti-drug Plan Has Come a Cropper. Los Angeles
Times. March 29, 2002. p 1.
17See Reuters dispatch. Colombia’s Coca Up, U.S. Says. The New York Times. March 9,
(continued...)

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CRS-10
The current U.S. policy focus on counternarcotics programs has become
increasingly controversial for reasons beyond implementation difficulties. On the one
hand, this focus is viewed by some policymakers and analysts as insufficient to
provide the support needed by a friendly democracy under siege by powerful armed
forces fueled by drug money. Proponents of the Administration’s requests, in keeping
with the sense of the House resolution (H. Res. 358) mentioned above, argue in that
in the context of the global war on terrorism, Colombia and the region should be
supported with counter-terrorism assistance before the situation becomes even more
dangerous, particularly when the guerrillas have demonstrated little willingness to
negotiate peace.18 They favor expanding the scope of military assistance to strengthen
the ability of Colombian security forces to combat the leftist guerrillas and to expand
their control throughout rural areas, thereby undercutting the rationale and support
for paramilitary groups. Those who favor an expanded military approach do not
necessarily favor continuing the eradication and alternative development programs
under current circumstances, however. Some argue that these programs, particularly
the forced aerial eradication, contribute to a counterproductive distrust of, if not
hostility toward, the Colombian government, alienating people whose support is
needed for counterinsurgency operations. Some also argue that substantial assistance
should be provided to improve civilian government institutions and expand their
presence throughout Colombia.
Some analysts and policymakers who would like to expand military aid
nonetheless argue that further military assistance should not be provided until the
armed forces have adhered to current conditions on assistance requiring that they
break ties to the paramilitary groups and end human rights abuses. They fear that
paramilitary groups, with their alleged ties to drug production and trafficking, may
become influential in Colombia’s national politics.19 This, they argue, is itself a
significant threat to U.S. security interests. In addition, some also believe that any
expansion of U.S. involvement should await a greater commitment by Colombia’s
government and elites to the war effort, including a larger budget for the Colombian
military.
Opponents of military aid attribute the problems of the counter-drug program
to what they view as its emphasis on a repressive and military approach to curbing
17(...continued)
2002, p. A5, and Letter to the editor by Robert S. Weiner. The Colombian Coca Crop. The
Washington Post. March 13, 2002, p. A28. The State Department attributed one-third of
the increase to the inclusion of a area that had not been surveyed in 2000 because of cloud
cover.
18For supportive comments, see statements on the same website under U.S. Military and Police
Aid (especially Other Groups’ Analyses), and U.S. Government Information (especially
statements from Officials and Legislators). For critical comments, see statements on the
C e n t e r f o r I n t e r n a t i o n a l P o l i c y ’ s C o l o m b i a P r o j e c t w e b s i t e
[http://www.ciponline.org/colombia/] under CIP Analyses, under U.S. Military and Police Aid
(especially Other Groups’ Analyses) and under U.S. Government Information (especially
Legislators).
19See: Joseph Contreras. The Paramilitary Effect. Newsweek International. April 8, 2002.
[http://www.msnbc.com/news/731960.asp].

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CRS-11
drug production. They would halt aerial fumigation spraying of coca crops and
counter-drug aid to the Colombian army, arguing that coca farmers cannot be
expected to abandon coca farming voluntarily until adequate economic alternatives
are in place. They fear that forcing such farmers to give up coca growing will only
drive many to the ranks of the armed groups or to become displaced persons
dependent on the state, perpetuating Colombia’s current economic difficulties and
violence. Instead, many urge that current policy be replaced by one that focuses
largely on economic and social aid to combat the conflict’s root causes, curbs the still
rampant human rights abuses by paramilitary groups, provides vigorous support for
a negotiated end to the fighting in Colombia, and increasingly emphasize illicit drug
demand reduction in the United States. They also maintain that the emergency
supplemental proposal, in particular, with its request for authority to provide
assistance to help Colombia counter its many threats, would involve the United
States in a major guerrilla conflict of indeterminate duration, i.e., in a
counterinsurgency campaign.20
Funding and Requests for Colombia.
! Under the P.L. 106-246 Plan Colombia funding, Colombia received $860.3
million. Of that, $424.9 was State Department funding and $91.8 was
Department of Defense funding to assist Colombian military anti-drug efforts
through interdiction support and the training and equipping of the Colombian
counternarcotics battalions. The remaining $435.4 was State Department
funding for assistance to the Colombian police, economic and alternative
development assistance, assistance for displaced persons, human rights,
administration of justice and other governance programs.
! Under ARI allocations for FY2002, Colombia received $380.50 million
(rather than the $399 million requested), with $243.50 million in
counternarcotics assistance, and $137 million in economic and social programs.
! Under the Emergency FY2002 Supplemental request, Colombia would receive
$4 million of INC funding for police post support in areas of weak government
control, $6 million of FMF funding for counter-terrorism equipment and
training, and $25 million of Nonproliferation, Anti-Terrorism and Demining
funding for counter-kidnapping training.
! Under the FY2003 request, Colombia would receive $537 million in ARI
funding, including $439 million in ACI funding, and $98 million in FMF
funding to train and equip a Colombian army brigade to protect an oil pipeline
in the country.
Peru
Peru, which shares its northern border with Colombia, is the fifth most populous
country in Latin America, with 27.5 million inhabitants (45% indigenous, 37%
20Christopher Marquis. U.S. to Explore Aid to Colombia, Citing Threat of Terrorism. The
New York Times. March 3, 2002. p A6.

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CRS-12
mestizo, and 15% of European descent). Peru’s new President, Alejandro Toledo,
was inaugurated on July 28, 2001, following two-round presidential elections in April
and June 2001. His election and inauguration ended a period of political uncertainty
since the constitutionally questionable third term re-election in June 2000 of President
Alberto Fujimori. Although President Fujimori had considerable support during his
presidency (1990-2000) for restoring the economy, defeating the guerrilla insurgency,
and reducing drug trafficking activity, he was criticized for corruption, human rights
violations, and authoritarian tendencies. He suddenly resigned and fled into exile in
November 2000, following allegations of corruption associated particularly with
security chief Vladimiro Montesinos. Acting President Valentin Paniagua governed
during a transition period that included the well regarded presidential elections.
President Toledo, a longtime anti-Fujimori opposition leader, was elected on
June 3, 2001, with 53% of the vote, against former left-leaning Peruvian President
Alan Garcia with 47%.21 President Toledo has promised to end corruption and to
stabilize the economy, and most observers worry that the expectations of the
populace, especially poor, indigenous groups, are almost impossible to achieve. The
President has labeled drug trafficking a national security problem for Peru and has
established a drug czar for the country to better coordinate counternarcotics
initiatives. When President Bush visited Peru on March 23, 2002, the two Presidents
agreed to enhance cooperation on counternarcotics and counter-terrorism issues.
Representatives of Peru and the United States launched an investigation into the
circumstances and procedures leading to an incident on April 20, 2001, in which a
Peruvian military plane shot down a small plane, killing an American missionary
woman and her infant daughter, after a CIA surveillance plane had indicated that the
small craft might be involved in drug trafficking activities. As a result of this accident,
U.S. surveillance of drug-related flights in Peru and Colombia was suspended pending
clarification of procedures. The State Department released the report of the U.S.-
Peruvian investigative team on August 2, 2001, concluding that “communications
systems overload” and “cumbersome procedures” played a role in the accident.
President Bush indicated during his March 2002 trip to Peru that talks were
continuing on appropriate procedures before the renewal of the anti-drug surveillance
flights.
Peru is viewed as a success story in counternarcotics efforts because six years
of joint U.S.-Peru air and riverine interdiction operations, aggressive eradication
efforts, and alternative development programs have reduced coca production by 70%.
However, coca production remained constant in 2001 and there are reports of rising
prices for coca and increased growing of poppies. Peruvian spokesmen have worried
about spillover effects of illicit drug activities from Colombia into Peru, and a possible
increase in coca production. They have denounced illicit plantings of coca and
poppies in Peru, and international trafficking of arms through Peru to FARC guerrillas
in Colombia. Responding to press reports that FARC forces have penetrated into
Peruvian territory, Peruvian officials stated in early 2002 that there are no permanent
FARC forces in Peru, but they concede that they may cross temporarily into border
21For more details, see CRS Report RL30918, Peru: Recovery from Crisis, by Maureen Taft-
Morales.

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CRS-13
areas. Because of these threats, Peru has moved military bases from its border with
traditional rival Ecuador, where tensions have diminished, to the border with
Colombia. The March 20, 2002 bombing of a shopping center near the U.S. Embassy
in Lima, three days before President Bush’s visit to Peru, raised fears of a resurgence
of guerrilla groups. At the conclusion of the presidential visit, the two Presidents
agreed to cooperate on counternarcotics and counter-terrorism issues.
Funding and Requests for Peru.
! As part of the FY2000 Plan Colombia emergency supplemental funding, Peru
received $25 million for KMAX helicopters for the Peruvian National Police,
and benefitted from regional interdiction funding .
! Under ARI allocations for FY2002, Peru received $194.87 million (rather than
the $206.15 million requested), with $119.87 million in economic and social
programs, and $75 million in counternarcotics aid.
! Under the FY2003 ARI request, Peru would receive $186.6 million, including
$119.6 million in economic and social programs, and $67 million in
counternarcotics and security assistance. Peru is not mentioned in the FY2002
supplemental request.
Bolivia
Landlocked Bolivia shares no border with Colombia, but its significant gains in
reducing illegal coca production could be threatened, in part, by success in controlling
production in Colombia. With a population of 8.3 million (roughly 55% indigenous,
and 45% mestizo and European), Bolivia is the eleventh most populous country in
Latin America. President Jorge Quiroga assumed the presidency on August 7, 2001,
when President Hugo Banzer, whom he served as vice president, resigned because of
cancer. He cannot, by law, run for his own term in the June 2002 elections.
With a large indigenous population, Bolivia experienced a significant social
revolution under one party in the 1950s with sweeping land reform, universal suffrage,
rural education, and nationalization of the country’s important tin mines. A period
of military control ran from the mid-1960s to the mid-1980s and was followed by a
series of ineffective and largely corrupt governments with linkages to drug traffickers.
Beginning in the mid-1990s, reformist governments in Bolivia carried out major
privatization programs and reforms, and put the country on a sound economic
footing. Bolivia is actively involved with the Andean Community, and is an associate
member of the Southern Common Market (Mercosur) formed by Brazil, Argentina,
Paraguay and Uruguay.

When elected in 1997, President Banzer set a goal in his “Dignity Plan” of
eliminating illegal coca cultivation and narco-trafficking during his five year term. In
support of Bolivia’s counternarcotics efforts, the United States has provided
significant interdiction and alternative development assistance and it has forgiven all
of Bolivia’s debt for development assistance projects, and most of the debt for food
assistance. Bolivia, like Peru, has been viewed by many as a counternarcotics success
story, with joint air and riverine interdiction operations, successful eradication efforts,

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CRS-14
and effective alternative development programs reducing illegal coca cultivation to the
lowest level in five years, with a net reduction of approximately 70% between 1996
and 2001.
Since mid-2001, however, the program has suffered reverses, according to the
State Department’s International Narcotics Control Strategy report (INCSR) for
2001. Although Quiroga had promised to carry out the Dignity Plan program, he has
relented after violent protests by coca growers in the Yungas and the Chapare
regions. The latter was once the country’s primary illegal coca-growing region. Much
of the illegal commercial crop had been eliminated there, but some has been replanted.
The INCSR states that coca cultivation in Bolivia, which had dropped steadily from
48,600 hectares (120,000 acres) in 1995 to 14,600 hectares (36,000 acres) in 2000,
had risen again to 19,900 hectares (49,000 acres) as of June 1, 2001.
The General Accounting Office, in its February 2002 report (GAO-02-291)22,
notes that U.S. and Bolivia officials attribute the Quiroga government’s faltering
commitment to crop elimination to a weakened governing coalition. Their statements
also point to the possibility that, with the approach of the June 2002 elections, some
members of the coalition may be fashioning political arrangements with the well-
organized cocaleros (coca growers), who have their own political party. In addition,
critics, and even some who have supported the program, claim that while eradication
has been successful in dramatically reducing coca cultivation, it has hurt the overall
economy.
Funding and Requests for Bolivia.
! As part of the FY2000 Plan Colombia emergency supplemental funding,
Bolivia received $25 million for regional interdiction assistance and $85 million
in alternative development assistance.
! Under ARI allocations for FY2002, Bolivia received $122.96 million (rather
than the $143.48 million requested), with $74.46 million in economic and
social assistance, and $48.50 million in counternarcotics aid.
! Under the FY2003 ARI request, Bolivia would receive $132.6 million,
including $82.6 million in economic and social programs, and $50 million in
counternarcotics and security programs. Bolivia is not mentioned in the
FY2002 supplemental request.
Ecuador
On Colombia’s southern border, Ecuador is the most exposed of Colombia’s
neighbors because it is situated adjacent to southern Colombian areas that are guerrilla
strongholds and heavy drug producing areas With a population of 13.2 million,
Ecuador is the eighth most populous country in Latin America. While roughly 65%
of the population is mixed race mestizo, about a quarter is indigenous. Ecuador is led
22Drug Control: Efforts to Develop Alternatives to Cultivating Illicit Crops in Colombia Have
Made Little Progress and Face Serious Obstacles, op. cit., p 25.

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CRS-15
by President Gustavo Noboa, the former Vice President who took office in January
2000, after an uprising by elements of the military and indigenous groups. He is the
fifth president in five years, with several of the previous Presidents leaving office as
a result of corruption charges. The country experienced hyperinflation and depression
in the late 1990s, leading to dollarization (the establishment of the dollar as the official
currency) in early 2001. Since then the economy has rebounded, with a growth rate
of 5.9% in 2001, and a projected growth rate of 4.5% for 2002.
According to press reports, Colombian guerrillas pass into Ecuadoran territory
for rest, recuperation, and medical treatment, and there are reports that Colombians
are buying ranches and farms in the Ecuadoran border region, possibly for drug
cultivation. Ecuadoran officials say they have uncovered and destroyed several small
cocaine processing labs in the area. The Ecuadoran border region is experiencing a
constant flow of Colombian refugees into the poor areas, and fighters with Colombian
paramilitary organizations have been arrested for running extortion rings in
Ecuadorian border regions. The FARC has been accused of kidnapping people in
Ecuador, although the FARC denies the allegations.23 Ecuador reinforced its northern
border with Colombia in early 2002 as Colombian anti-guerrilla operations intensified
following the breakdown of the peace talks, and Ecuador was said to be seeking
additional international assistance.24
Funding and Requests for Ecuador.
! As part of the FY2000 Plan Colombia emergency supplemental funding
Ecuador received $20 million in U.S. assistance, of which $12 million was to
support drug interdiction efforts, and $8 million was for alternative
development assistance. Another $61.3 million has been allocated for the
construction of a Forward Operating Location in Manta, Ecuador for
counternarcotics aerial surveillance.
! Under ARI allocations for FY2002, Ecuador received $46.86 million (rather
than the $76.48 million requested), with $31.85 million in economic and social
programs, and $15 million in counternarcotics aid.
! Under the Emergency FY2002 Supplemental request, Ecuador would receive
$3 million of FMF funding for counter-terrorism equipment and training.
! Under the FY2003 ARI request, Ecuador would receive $65.1 million,
including $43.1 million in economic and social programs, and $22 million in
counternarcotics and security assistance. Under the Emergency FY2002
Supplemental request, Ecuador would receive an unspecified amount of FMF
funding for counter-terrorism equipment and training.
23For more information, see CRS Report RS20494, Ecuador: International Narcotics
Control Issues, by Raphael Perl.
24See Ecuador Wants Money to Strengthen Border; Guerrilla Infiltration Concern Grows After
Military Action Against FARC, Financial Times, March 8, 2002, p. 10.

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Brazil
Brazil’s isolated Amazon region, populated largely by indigenous groups, forms
Colombia’s southeastern border. With a population of 174.5 million, Brazil is the
largest and most populous country in Latin America, with most of its 174.5 million
inhabitants concentrated in the more developed southeastern areas of the country and
along the Atlantic coast. The country is led by President Fernando Henrique Cardoso
who is approaching the end of his second and final term. He is credited with leading
the country into a period of growth after ending years of inflation with his Real Plan
and also weathering a financial crisis with IMF assistance in late 1998 and 1999. New
presidential elections are approaching in October 2002, with the governing coalition
splitting apart, raising doubts about the government’s ability to carry out needed
reforms and to maintain current economic policy. Brazilians have long been
concerned about the sparsely populated territory in the huge Amazon region, and they
have been fearful historically of foreign designs and intervention in this territory.
Brazil is not an illicit drug producing country, but it is a growing transit area for
cocaine moving from the Andean Ridge to Colombia. In an effort to exercise control
over this vast territory Brazil has constructed a $1.4 billion sensor and radar project
called the Amazon Vigilance System, or SIVAM from its acronym in Portuguese, and
it has offered to share data from this system with neighbors and the United States.
It has established a military base at Tabatinga, with 25,000 soldiers and policemen,
with air force and navy support, and has launched Operation Cobra with heightened
vigilance to deal with spillover effects from Colombia. Press accounts suggest
evidence of Colombian drug traffickers encouraging indigenous communities in Brazil
to plant coca, Brazilian drug traffickers linked to Colombian traffickers, and FARC
incursions along the border. In one example in late 1998, the FARC captured a city
on the Colombian border, forcing Colombian troops to withdraw into Brazilian
territory, before recapturing the city. In another example, a plane from Suriname with
arms for FARC guerrillas was discovered when it was forced to make an emergency
landing in Brazil. In another more recent example, FARC forces crossed into Brazil
in early March 2002 and exchanged gunfire with Brazilian military forces.25
Funding and Requests for Brazil.
! Brazil received only a small amount of Plan Colombia assistance, but under
ARI allocations for FY2002 Brazil would receive $18.63 million (rather than
the $26.18 million requested), including $6 million for counternarcotics and
security, and $12.63 million for economic and social development.
! Under the FY2003 ARI request, Brazil would receive $29.5 million, including
$12 million for counternarcotics and security, and $17.5 million for economic
and social programs. Brazil is not mentioned in the FY02 supplemental
request.
25See Brazil: Incidents with FARC on Border with Colombia Viewed, BBC Monitoring
Americas, March 9, 2002.

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Venezuela
Venezuela, Colombia’s eastern neighbor, is the United States’ fourth largest
supplier of crude oil. With a population of 23.9 million (of largely mestizo stock),
Venezuela is the sixth most populous country in Latin America. The country is
presently led by President Hugo Chavez, a former disgruntled military leader and a
populist, who was initially elected in late 1998 on a campaign to rewrite the
constitution, rid the country of corruption, and more adequately meet the needs of the
people. During 1999, at Chavez’s request, Venezuelan voters approved the creation
of a National Constituent Assembly, elected members of the new assembly, and
approved the newly written constitution which lengthened the presidential term and
expanded presidential powers. On July 30, 2000, in a so-called mega-election,
President Chavez easily won election to a new six year term of office.26 Because of
his previous attacks on the legislature and other institutions, many observers fear that
he has authoritarian tendencies somewhat like those of former President Fujimori in
Peru.
Chavez has established close ties with Fidel Castro and other leftist leaders, and
he often employs anti-U.S. rhetoric. He has denounced Plan Colombia as a U.S.-
dominated military strategy, he has denied the United States overflight rights over
Venezuela territory, and there have been reports that he has friendly relations with
Colombian guerrillas. Following the September 2001 terrorist attacks on the United
States, Chavez criticized U.S. military action in Afghanistan, saying that the United
States was “fighting terror with terror,” and he visited Libya, Iran, and Iraq,
prompting President Bush to exclude him from his March 2002 meeting with Andean
leaders in Peru.27 In recent months Chavez’s popular support has fallen and there
have been street demonstrations against him, calls for his resignation by retired and
active duty military officials, and disputes with the national oil monopoly over his
appointments. In late March 2002, a Colombian military official claimed that the
FARC guerrillas had a camp in Venezuelan territory from which they launched an
attack, but Venezuela has rejected this claim and demanded clarification.28
After massive opposition protests and military pressure, President Chavez was
removed from office on April 12, 2002, and business leader Pedro Carmona was
designated as head of an interim government, but Chavez returned to power on April
14, 2002 following street protests and dissatisfaction with Carmona’s hardline anti-
democratic measures. Criticism of the United States for appearing to recognize the
Carmona government and for having had contacts with opposition groups make it
likely that tensions between the United States and Venezuela will continue.
26For more details, see CRS Report RS20978, Venezuela under Chavez: Political Conditions
and U.S. Relations, by Mark P. Sullivan; and Scott Wilson, “Chavez’s Unfinished
Revolution; Venezuelan’s Accomplishments Fall Short of His Rhetoric,” Washington Post,
May 21, 2001, p. A1.
27See Peter Slevin, Political Crisis in Venezuela Worries White House, Washington Post,
February 23, 2002, p. A18.
28See Fabiola Sanchez, Chavez Demands Colombia Clarify Claim, Associated Press Report,
April 2, 2002.

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CRS-18
Venezuela is a major transit route for cocaine and heroin from neighboring
Colombia to the United States and Europe. In 2001, some coca fields were located
and eradicated, and processing labs were detected and destroyed. Despite various
policy disagreements with the United States, the Chavez government has cooperated
with the United States in counternarcotics efforts.
Funding and Requests for Venezuela.
! While Venezuela received only a small amount of Plan Colombia assistance,
under the final ARI allocations for FY2002, Venezuela would receive $5.5
million (rather than the $10.5 requested), including $5 million in
counternarcotics and security aid, and the remainder in economic and social
development programs.
! For Venezuela, $8.5 million was requested in ARI funding, all but $500,000
of which is ACI funds. Venezuela is not mentioned in the FY02 supplemental
request.
Panama
Panama is separated from Colombia along its southern border by the difficult and
environmentally sensitive wetlands and rain forest of the “Darien Gap.” Here, the
16,000 mile Pan American highway (stretching from Alaska to the tip of southern
Chile) is interrupted for a 60 mile stretch. A part of Colombia until 1903, Panama is
now the twentieth most populous country in Latin America, with a population of 2.8
million (of largely mestizo and West Indian origins).

Panama’s history has been heavily influenced by its strategic location and the
transit of commerce through the Panama Canal in the center of the country, where the
major cities are located. It is led by President Mireya Moscoso, elected and
inaugurated in 1999, who has been dealing with economic difficulties in Panama, and
with Panama’s new responsibilities for the Panama Canal since the U.S. withdrawal
on the last day of 1999. Despite considerable effort in the period leading up to the
U.S. withdrawal, Panama was unwilling to allow the United States to retain a formal
military presence in Panama for counternarcotics surveillance purposes.29 This forced
the United States to develop the Forward Operating Locations in El Salvador,
Aruba/Curacao and Ecuador as substitute locations for such activities. Panama has
been the scene of cross-border incursions by Colombian guerrillas and by Colombian
paramilitary groups. There is some evidence that paramilitary groups are being
founded in Panama, with support from Colombian groups, because of the perception
that the Panamanian government has left some areas unprotected. Shipments of small
arms for the Colombian guerrillas have been seized in Panamanian territory as well.
Panama is not an illicit drug producing country, but it is a major transshipment
point for illicit drugs, especially cocaine, smuggled from South America, and it is a
major site for money-laundering activity. In recent years Panama has cooperated with
29For more detail, see CRS Report RL30981, Panama-U.S. Relations, by Mark P. Sullivan
and M. Angeles Villarreal.

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CRS-19
the United States in bilateral counternarcotics efforts, seizing significant amounts of
illicit drugs and enforcing recently passed anti-money laundering legislation. In early
2002, a comprehensive U.S.-Panama maritime anti-drug agreement entered into force.
Funding and Requests for Panama.

! While Panama received only a small amount of Plan Colombia assistance,
under allocations for FY2002, Panama is to receive $13.50 million (rather
than the $20.5 million requested), including $8.5 million in economic and social
development funding, and $5 million for counternarcotics and security
programs.

! For FY2003, the Bush Administration has requested $20.5 million in ARI
funding, including $9 million in ACI and $1 million in FMF monies. Panama
is not mentioned in the FY02 supplemental request.
Major Legislative Activity in 2002
on Andean Regional Initiative Issues
Foreign Relations Authorization, FY2002-FY2003
(Action commenced in 2001; to be completed in 2002)
House Action. The House International Relations Committee reported out
H.R. 1646 on May 4, 2001, with four reporting requirements on Colombia and a
prohibition on the issuance of visas to supporters of illegal armed groups in Colombia.
The bill was passed by the House on May 16, 2001, without additions or
modifications in that area. The required reports relate to the elimination of Colombian
opium, the effects of Plan Colombia on Ecuador, alternative development and
resettlement programs, and the Colombianization of counternarcotics activities.
Committee Action. H.R. 1646 was introduced by Representative Hyde on
April 27, 2001, with two reporting requirements concerning the elimination of
Colombian opium poppy crops and the effect of Plan Colombia on Ecuador (see
below for details). The measure was referred to the House Committee on
International Relations. When the Committee marked up the bill on May 2, 2001, it
adopted by voice vote two amendments offered by Representative Delahunt: the first
imposed reporting requirements on Department of State activities and on the
“Colombianization” of counternarcotics activities; the second prohibited the issuance
of visas to supporters of Colombian illegal armed groups (see below for details). The
bill was reported out amended (H.Rept. 107-57) by the Committee on May 4.
Floor Action. After floor consideration on May 10 and 16, 2001, with no
additional amendments on Colombia or the Andean region, H.R. 1646 was approved
by the House on May 16, and sent to the Senate on May 17, with the following
provisions relating to the Andean Regional Initiative:

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CRS-20
! Reporting Requirement Concerning Elimination of Colombian Opium.
Sec. 204 requires the Secretary of State, through the Bureau of International
Narcotics and Law Enforcement, to submit, not later than 60 days after
enactment, a report which outlines a comprehensive strategy to address the
crisis of heroin in the United States due to opium originating from Colombia,
including destruction of opium at its source.
! Reporting Requirement Concerning Effect of Plan Colombia on Ecuador.
Sec. 211 requires the Secretary of State, through the Bureau of International
Narcotics and Law Enforcement, to submit, not later than 60 days after
enactment, a report which outlines a comprehensive strategy to address the
spillover effect of Plan Colombia on Ecuador.
! Reporting Requirement on Department of State Activities in Colombia.
Sec. 213 (a) requires the Secretary of State to submit within 180 days of
enactment, and every 180 days thereafter, a report on State Department
funded and authorized activities in Colombia to promote alternative
development, recovery and resettlement of internally displaced persons, judicial
reform, the peace process, and human rights. This report would include
summaries of activities undertaken during the previous 180 days, estimated
timetables for the next period, an explanation of any delays in meeting planned
timetables, and an assessment of steps to be taken to correct such delays.
! Reporting Requirement on the “Colombianization” of U.S. Funded
Counternarcotics Activities. Sec. 213 (b) states that U.S. policy
“encourages” the transfer of counternarcotics activities in Colombia, now
carried out by U.S. businesses under agreements with the State Department,
to Colombian nationals, “in particular personnel of the Colombian antinarcotics
police, when properly qualified personnel are available.” It also requires the
Secretary of State to report within 90 days of enactment and subsequently not
later than March 1 on the counternarcotics activities carried out by U.S.
businesses under State Department agreements. The report must include the
names of such businesses, the total State Department payments to each
business, a statement justifying the agreement, an assessment of risks to
personnel safety and potential involvement in hostilities incurred by employees
of each such business, and a plan to provide for the transfer of these activities
to Colombians.
! Denial of Visas to Supporters of Colombian Illegal Armed Groups. Sec.
236 prohibits the issuance of visas to any alien who the Secretary of State
determines has wilfully provided direct or indirect support to either of the two
leftist guerrilla groups, the Revolutionary Armed Forces of Colombia (the
FARC) and the National Liberation Army (the ELN), or to the rightist United
Self-Defense Forces of Colombia (the AUC); or “has wilfully conspired to
allow, facilitate, or promote the illegal activities of any of those groups. A
waiver is provided for cases where a visa “is necessary to support the peace
process in Colombia, for urgent humanitarian reasons, for significant public
benefit, or to further the national security interests of the United States.”

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CRS-21
Senate Action. The Senate Foreign Relations Committee approved the Senate
version of the Foreign Relations Authorization for FY2002-FY2003 (S. 1401) on
August 1, 2001, and reported out the bill on September 4, 2001, with a requirement
for a report outlining a strategy to eradicate opium in Colombia.
Committee Action. The Committee on Foreign Relations reported out S.
1401 on September 4, 2001, with a provision in section 606, similar to a provision in
the House version of the bill, requiring the Secretary of State to submit to appropriate
congressional committees within 60 days after enactment a report that outlines a
comprehensive strategy to eradicate all opium at its source in Colombia.
Extension of Andean Trade Preference Act (ATPA)30
(Action commenced in 2001; to be completed in 2002)
House Action. On October 5, 2001, the House Ways and Means Committee
ordered reported H.R. 3009, the Andean Trade Promotion and Drug Eradication Act,
that would extend the ATPA through December 31, 2006. On November 16, 2001,
the House passed H.R. 3009, the Andean Trade Promotion and Drug Eradication Act,
which would offer expanded trade benefits to the Andean region through December
31, 2006.
Committee Action. On October 5, 2001, the House Ways and Means
Committee approved and ordered reported H.R. 3009, the Andean Trade Promotion
and Drug Eradication Act, that would extend the ATPA through December 31, 2006,
and provide duty-free treatment to selected apparel, tuna, and other products
previously excluded. The bill would also expand the conditions countries would have
to meet to remain eligible for program benefits.
Floor Action. On November 16, 2001, the House passed H.R. 3009, the
Andean Trade Promotion and Drug Eradication Act, which would offer expanded
trade benefits to the Andean region through December 31, 2006.
Senate Action. The Senate Committee on Finance reported out a version of
H.R. 3009 on November 29, 2001, but no floor action has been taken thus far.
Committee Action. On November 29, 2001, the Senate Committee on
Finance reported out an amendment in the nature of a substitute to H.R. 3009
(containing the substance of S. 525). This version would extend the ATPA through
February 28, 2006, and provide expanded benefits, but more limited benefits than the
House-passed version.
30For details on this legislation, see CRS Report RL30790, The Andean Trade
Preference Act: Background and Issues for Reauthorization, by J. F. Hornbeck.
Updated information can be found in the CRS trade electronic briefing book at
[http://www.congress.gov/brbk/html/ebtra1.shtml].

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CRS-22
Appendix A. Map Showing Andean Regional
Initiative Countries
(Colombia, Bolivia, Brazil, Ecuador, Panama, Peru, and Venezuela)

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CRS-23
Appendix B. U.S. Assistance to Colombia FY2000-FY2003
(Obligations and authorizations, $ millions)
Plan Colombia
Plan Colombia
FY2000
FY2001
FY02
(P.L. 106-246)
(P.L. 106-246)
FY02
FY03
Programs
Regular
Regular
Supplemental
FY2000
FY2001
Allocations
Request
Approps.
Approps.
Request
Supplemental
Supplemental
Economic
USAID Grantsa
Development Aid
4.0
0.0
4.0
0.0
0.0
4.0
0.0
Counternarcotics
State Department/INC accounta
50.0
48.0
0.0
380.5
439.0
State Department INC Air Wing
31.3
768.5
28.0
0.0
NA
NA
Department of Defense/Section 1004
90.6
150.0
83.2
NA
Department of Defense/Overlapping
6.6
4.6
5.0
NA
Sections 1004/124
Department of Defense/Section 1033 or
7.2
22.3
4.0
NA
Section 1033-type authority
Anti-Terrorism
25.0
0
Military
International Military Education and
0.9
0.0
1.0
0.0
1.2
1.2
Training (IMET)
Foreign Military Financingb
0.0
0.0
0.0
0.0
0.0
6.0
98.0
Drawdowns
Department of Defense/Section 506
drawdown authorized
0.0
NA
NA
Other Section 506 drawdowns (i.e.,
Departments of Transportation, Justice,
State, and the Treasury) authorized
TOTALS (of available numbers)
958.2
257.0
473.9
35.0
538.2
NA = Not Available.
Sources: This chart is compiled from a variety of sources. It includes direct U.S. foreign assistance (i.e., the categories usually counted as U.S. foreign aid, which are in italics), as well as the costs
of goods and services provided to Colombia from other U.S. government programs supporting counternarcotics efforts in Colombia. The United States also provides a small amount of Department
of Defense Excess Defense Articles (EDA) to Colombia. Other funds are spent in Colombia on counternarcotics and other activities that are considered part of U.S. programs: for instance, the Drug
Enforcement Administration (DEA) spends its own funds on joint operations in Colombia. Figures on FY2000 and FY2001 State Department INC funding provided January 10-11, 2001. Figures on

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CRS-24
DOD Sections 1004, 1004/124, and 1033 funding provided April 11, 2002. DOD Sections 124, 1004, and 1033 funding is taken from regional accounts and the FY02 allocations are estimates, and
can be shifted to respond to developing needs in other areas. This chart also provides a breakout from another central account that Congress appropriates as a lump sum, the State Department Air
Wing fund. There are other small central accounts where such a breakout is not available, and no attempt was made here to estimate such funds. Prepared by Nina M. Serafino, April 11, 2002.
a FY2000 non-DOD Plan Colombia supplemental funds were all assigned to the State Department International Narcotics Control (INC) account; the State Department is transferring them to the other
agencies carrying out programs in Colombia with those funds. The A.I.D. FY2000, FY2001, and FY2002 figures are all ESF. These U.S. AID figures do not include funds provided to AID from the
INC account. The Plan Colombia funding chart shows a breakdown of the uses of that funding. In the Bush Administration’s FY2003 budget request, the Administration estimates that of the $380.5
million allocated for FY2002, $243.5 million will be used for interdiction, and $137.0 for alternative development and institution building. For the FY2003 request, the anticipated breakdown of the
requested $439 million is $275.0 million for the former and $164.0 million for the latter. [http://www.state.gov/m/rm/rls/iab/2003/7809.htm].
b These requests did not specify whether they were grants or loans, but as recent FMF financing to Colombia has been grants, they are presumed to be grants.

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CRS-25
Appendix C. Bush Administration’s Andean Regional Initiative (ARI) FY2002 Request
and FY2002 Allocations by Purpose and by Functional Accounts
($ millions)
ARI FY2002 Allocations
ARI FY2002 Allocations
By Purpose
By Account
Total
Total ARI
ARI
International
Country
FY2002
FY2002
Economic/
Counternarcot
Narcotics Control
Develop-
Child
Economic
Foreign
Request
Allocations
Social/
ics and
(Andean
ment
Survival and
Support
Military
Governance
Security
Counterdrug
Aid
Diseases
Fund
Financing
Initiative)
Colombia
399.00
380.50
137.00
243.50
380.50
0
0
0
0
Bolivia
143.48
122.46
74.46
48.00
81.00
12.05
19.41
10.00
0.5*
Brazil
26.18
18.63
12.63
6.00
6.00
3.93
8.70
0
0
Ecuador
76.48
46.86
31.85
15.00
25.00
6.86
0
15.00
0
Panama
20.50
13.50
8.50
5.00
5.00
4.50
0
4.00
0
Peru
206.15
194.87
119.87
75.00
142.50
14.17
23.20
15.00
0
Venezuela
10.50
5.5
0.50
5.00
5.00
0
0
0.50
0
Totals
882.29
782.32
348.82
379.50
645.00
41.51
51.31
44.5
0.50
Source: Office of the Secretary of State. International Affairs Function 150 Fiscal Year 2003 Budget Request Summary and Highlights. February 2002. The ARI does not include
International Military Education and Training (IMET) funds. These will range in FY2002 from an estimated $170,000 for Panama to an estimated $1,180,000 for Colombia. Prepared
by Nina M. Serafino, February 12, 2002.
* The ARI for FY2002 also did not include Foreign Military Finance Funding (FMF). The small amount for Bolivia is included here, even though it was not specifically for
counternarcotics purposes, in order to facilitate comparisons with the FY2003 request, which includes FMF for Andean Regional Initiative countries.
Note: Totals may not add due to rounding.

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CRS-26
Appendix D. Andean Regional Initiative (ARI) FY2003 Request by Purpose and Functional Accounts
($ millions)
ARI FY2003 Request by Purpose
ARI FY2003 Request by Account
Total ARI
Country
FY2003 Request
Economic/
Counter-
International Narcotics
Development
Economic
Foreign Military
Social/
narcotics and
Control (ACI)
Aid*
Support Fund
Financing
Governance
Security
Colombia
537.0
164.0
373.0
439.0
0
0
98.0
Bolivia
132.6
82.6
50.0
91.0
30.6
10.0
1.0
Brazil
29.5
17.5
12.0
12.0
17.5
0
0
Ecuador
65.1
43.1
22.0
37.0
7.1
20.0
1.0
Panama
20.5
10.5
10.0
9.0
7.0
3.5
1.0
Peru
186.6
119.6
67.0
135.0
40.6
10.0
1.0
Venezuela
8.5
0.5
8.0
8.0
0
0.5
0
Totals
979.8
437.8
542.0
731.0
102.8
44.0
102.0
Source: Office of the Secretary of State, Resources, Plans and Policy. International Affairs Function 150 Summary and Highlights, Fiscal Year 2003 Budget Request. The ARI totals
do not include International Military Education and Training funds, which range in the FY2003 request from $200,000 for Panama to $1,180,000 for Colombia. Prepared by Nina
M. Serafino, Specialist in International Security Affairs, February 12, 2002.
* Includes funds previously cited under Child Survival and Diseases.

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