Washington, D.C.

Congressman Jim Kolbe [JK]: (In Progress) You have, I believe, the program. But let me acknowledge the fact that this program this morning is sponsored by six of our most distinguished think tanks in Washington and groups in Washington, the Association of American Chambers of Commerce of Latin America; the Council on Foreign Relations; the CSIS; Heritage Foundation; the InterAmerican Dialogue; and the Woodrow Wilson International Center for Scholars.

As it was noted at breakfast upstairs with the President, it is a testament, I believe, to him, as well as to the importance of Colombia in this country that there was a competition among organizations to sponsor him, and, happily, they agreed to join together in the sponsorship. To take a line from what the President said, he acknowledged that and said he hoped there would be just as much competition for assistance to Colombia as there is to listen to him. It is, as I said, a great pleasure for me, as a member of the United States Congress to be asked to introduce President Uribe. I have, as I’ve noted, the privilege of chairing the House Subcommittee on Foreign Operations, and in that capacity we fund most of the assistance programs for Colombia. Of necessity, over the last couple of years, I’ve learned more about Colombian internal politics as well as its struggle against illegal drug trafficking than I ever planned or expected. Congress does play a strong role in directing our policy with Colombia.

And frequently, our subcommittee has been at the very center of an often dynamic and heated debate. There are a few points I share often with my colleagues in Congress that I’ll also share with you today. While it’s true that Colombia is the source of 90 percent of the cocaine in the United States, it’s also true that the United States is the largest trading partner for Colombia in all of its legal goods and services.

Without question, it is in the interests of the United States to promote stability in Colombia by helping it address its long-standing problems, its political problems, the recent escalations of violence. Because Colombia shares a border with five other countries, instability in that country also threatens the stability of the entire Andean region. And while only three percent of the oil that is consumed in this country comes from Colombia, 14 percent of it comes from neighboring Venezuela. And, so, oil imports from South America play a vital role in our strategy to diversify the sources of petroleum for the United States.

The Colombian economy has faced a number of economic shocks that have limited its ability to contribute to the defense of its own people. Oil pipelines have been bombed. Price of coffee has fallen. Foreign investment in Colombia has dropped. These deteriorating economic conditions and the worsening employment, or unemployment, only encourages the narcotics industry in Colombia, and it becomes a vicious cycle. I believe that the role that has been played by the United States Congress has on the whole made U.S. policy with Colombia more effective, not all the time but, I believe, most of the time. Before this summer, the United States’ assistance to Colombia was focused primarily on counter-narcotics and interdiction.

Alternative development to illicit crops, strengthening the rule of law and assisting internally displaced persons. Prior to July of this year, U.S. assets and U.S. intelligence could be based only on counter-narcotics activities in Colombia. Following former President Pastrana’s decision to end the peace process in Colombia, it became clear that the imaginary line between counter-narcotics and counter terrorism could not be maintained. In negotiations this summer between the administration and Congress, we were able to arrive at a bipartisan, bicameral compromise, forging a change in policy that recognizes a simple reality.

Coca provides the revenue and the motive behind the violence committed by both the guerrilla and the paramilitary groups in Colombia. With the existing human rights conditions and limits on the number of U.S. personnel in Colombia still in place, this policy is not a major expansion of the U.S. role in Colombia’s civil war. Rather, it is a realistic approach to the situation in a nation that has suffered so much for so long. Now, Colombian military forces will be able to use existing assets to combat terrorists as well as narco-traffickers. In reality, they are one and the same. I’m concerned about the urgency of the current situation facing Colombia.

President Uribe’s leadership is desperately needed today, and I believe Colombia is fortunate to have his leadership. President Uribe was elected with a mandate unparalleled in modern Colombia history on a platform of combating terrorism and implementing fiscal austerity. When he was inaugurated just six weeks ago on August 7th of this year, he was welcomed, as we know, by the FARC with mortar attacks on the presidential palace. But he has not flinched in his determination to carry out the struggle against terrorism and drug trafficking. I have great personal admiration for President Uribe. All Americans have high hopes and expectations for his administration. This is his first visit to Washington since his inauguration and I hope you’ll join me in warmly welcoming him to Washington today (Applause), President Uribe.

Alvaro Uribe [AU]: Congressman Kolbe, I cannot find words to thank you for your interest in Colombia, for you confidence in our people, in our institutions, in our government. Please say to all the members of Congress about the gratitude we feel in Colombia because of your interest to help us to find ways to solve our problems. And I want to thank the Council on Foreign Relations, the Inter-American Dialogue, the Heritage Foundation, the Center for Strategic and International Studies, the Wilson Institute and the U.S.-Latin America Chamber of Commerce for coming together and co-sponsoring this event. Together these organizations represent a very broad spectrum of political thoughts and ideas. The challenges and difficulties Colombia faces today are enormously complex and complicated. There is no quick answer, no single solution or policy answer. So, I welcome the opportunity to engage in this dialogue with such an impressive cross-section of political and policy experts.

Colombia is going through difficult and challenging times. The security situation has deteriorated significantly. Economic growth is extremely low, and unemployment unacceptably high. The fiscal deficit seems to have stabilized. But the (Inaudible) at a high level. Our public debt to GDPVAU(?) is still increasing. Many Colombians that vote for a program that rests on that theorem believe that it is imperative to restore confidence in the ability of their government to produce an environment in which the average Colombian can lead a safe and prosperous life. During my administration, confidence enhancement will rest on three pillars.

Strengthening the military in order to enhance security, to restore law and order, reforming state institutions in order to have a leaner and more efficient executive branch and a more accountable and prospering legislature posturing a structural reform and make economic stability. In the medium term, we envision a build to cycle in which enhancing the military produces better security, more confidence, a safer environment for domestic and foreign investment, more growth and a more sustainable debt path. In the short term, it is a daunting task to simultaneously strike for enhancing the security apparatus, reducing the fiscal deficit and fostering growth.

We have to be extremely creative and understand that we require a combination of public expenditure adoption, a reallocation, fiscal revenue increase, and peace commitments from the international community. In all three fronts, we have made significant progress with regard to expenditure. The reform of the state began before I was inaugurated and will last for the remainder of my administration.

It will accommodate part of the increase in military expenditure and in social expenditure targeted to the poor. Ministries have been met. Diplomatic posts are being closed. And a rise of redundant institutions will be suppressed. We have presented to Congress an improved pension reform bill, by doing away with the special regimes, accelerating the transition process and changing key parameters, the reform to produce important effects is starting in 2004. Fiscal revenues have been increased, both through emergency measures and through ordinary legislation. A tax on net wealth has already been established. And increases in the income tax have been submitted to Congress. A referendum which includes a question to freeze operating public expenditures has been submitted to our Congress and will be submitted to our people. These changes will increase tax collections by at least two percent of GDP.

Regarding the international community, we have had fruitful approximations with the multilateral institutions and several governments. The latter have expressed their willingness to further open their markets to our products and in certain instances to increase the role impartially funding Colombia efforts to combat drug traffic and terrorism. We intend to avoid becoming net exporters of capital to the World Bank and IDP.

Conversations in that regard are moving fast and should be helped by an agreement with the IMF which should take into account the fact that Colombia has to be protected against regional contagion, while at the same time, receiving assurances that our balance of payment positions will be safeguarded during the initial phases of a program that I clearly see as self-sustainable in the medium term. In accordance with multilateral institutions, we support a structure of reforms introduced by the previous administration and have submitted to Congress several new ones. We support the fiscal responsibility law and have strengthened the pension reform law. We support the reform to the financial sector including making the supervisory agency more independent. We have introduced a labor reform that will make the labor market more flexible.

We are looking closely at our tradition of the laws governing the buying process in order to recuperate a framework in which most of the budget and not only a marginal part of it will be under their discretion of their government. We have designed a strategy that our firm commitment that markets will remain open for Colombia, because markets understand that we are addressing our most dire problems.

If markets were to react less favorably, my administration stands with me to introduce any additional changes in fiscal policy that are required for us to timely service all our financial obligations. Colombia’s greatest asset lies in that it has always honored, in timely all manner, all aid both with foreign as well as domestic creditors. Make no mistake that we will remain current in all our financial obligations. But we need to honor our social obligations. I want to repeat my thanks to the sponsor and to all of you. I consider it is more convenient to have an open dialogue for you and for me to be ready to take your questions and to do my best in order to answer them. Thank you, Congressman Kolbe, again.

JK: Mr. President, I know, on behalf of all of us, we appreciate your introductory remarks. A couple of announcements, before we go to questions. One I should have made at the outset that I notice everybody’s been very good. If you do have cell phones that are still on, would you please turn them off? This, unlike many of the Council meetings, this is an on-the-record session here today. However, the questions will be limited to the invited guests. The press will have their opportunity at another time to ask their questions.

If you have a question, when I call on you, please stand and state your affiliation so that we can understand who you’re with and ask your question very briefly of the President, and he will answer the question from the location where he is right now. And with that, the floor is open for questions from the audience. I know we’ll have somebody that will want to lead off here with a question. Yes. We do have traveling mics that will be brought to you for the question.

Audience [SJ]: Steve Johnson from the Heritage Foundation. I understand from your campaign promises and campaign agenda that you have embarked on a measure of Congressional reform which may include downsizing your Congress and making a unicameral body. How do you think that will play and work with the Congress that is now being faced with numerous measures to increase expenditures on internal security as well as institutional reform?

AU: In general thinking, I consider that my country is a very big bureaucratic state and a very small social state. My main idea is to destroy corruption, to destroy the pork politics barrel, pork barrel politics, as a way of doing politics. My idea is to reduce the bureaucratic state to save money and to put this money to increase social investment, to support the reactivation of our economy. Of course, we need to set up a good example. This is the reason I propose to freeze the salary of the President, the salary of the people of Congress, to put a limit to the pensions for top pension in the public sector.

The referendum imputes the downsizing of Congress, the elimination of pork barrel politics and other decisions. Up to now, the commission in Congress has approved the vast majority of these points except they prefer two chambers than one, and they do not prove the downsizing as the strong as was my idea. Now, we have more or less, we have 258 members in Congress.

In accordance with the census of Colombia population, which would have almost 400, the commission approved last week to submit to the public opinion through referendum a number of 214 in two chambers. This idea has to be discussed in both plenary sessions, in the Senate and in the House, and of course, I will insist to Congress to reduce this number even more. If we want to restore confidence in our economy, we need economic stability, security and transparency and confidence in our rules.

To help make economic stability, we need to solve the fiscal deficit problem. And to solve the fiscal deficit problem, we need to increase taxes, tax collection, and we need to reduce expenditures. And to reduce expenditures we need a good example from the top of the state. This is one of the reasons supporting my initial proposal of referendum.

JK: Another question. Yes, sir. Right here? Wait for the microphone. Just a second.

Audience [HW]: Yes. My name is Harrison Wellford from Latham and Watkins. Mr. President, yesterday, at the State Department, the Spokesman was asked whether or not controversy about Colombia’s alleged failure to respect international arbitration might keep it from qualifying for enhanced trade benefits under the Union Trade Reference Act. I know this is a problem that you inherited from the Pastrana administration. But as Congressman Kolbe knows, foreign assistance laws authorizing trade benefits have a mandatory criterion that recipients respect international arbitration. I’m wondering whether or not you’re going to be able to take steps to remove this impediment to enhance trade benefit for Colombia.

AU: We are ready to sign a bilateral agreement to protect foreign investment. We are ready to do it. Of course, you should understand that we have an independent judiciary system, and under our Constitution, under our legal system, the decisions of arbitrations, they have an additional stage at the judiciary system. This is what you have seen in many cases. The week before my inauguration, our judiciary system, they made a decision reforming a previous decision made by arbitration. We have to respect the independence of our judiciary system. And we have to create a framework that gives more confidence to the foreign investors. We are ready to it. Last week, my administration made very important decisions. For example, in the field of intellectual rights when we asked for eligibility for our exporters to have the opportunity to export to this country and under the rules of ADPA, this is because we are doing the best we can to protect the interest of U.S. exporters to our country. This is the case of pharmaceuticals. The decision we made the last week doesn’t have precedence in Colombia. In order to give clear hints of transparency, clarity, we must respect the rules and respect intellectual property rights.

JK: Yes, sir, here, and then we’ll go to the back. Just a moment.

Audience [JT]: I am John Thompson of the Illinois Institute of Technology. Mr. President, as you know, many Americans, and, therefore, their elected representatives are concerned about reports that allege that there is collaboration between senior members of your country’s military forces and illegal armed groups, most specifically the so-called paramilitary groups. I know that this is a subject about which you know very much. Would you please share with us your feelings and assurances as to why what we’re doing is the right thing with respect to this?

AU: Our strategy on security is based on our conviction that we need democratic security. This means security for all Colombians, security for peasants, security for entrepreneurs, security for journalists, security for human rights activists, security for people of the right, security for people of the left, security for all. This is the reason we call this strategy a strategy for democratic security, to provide Colombians with security regardless creed, ideology, social or economic status. Of course, we have to enlarge the Army and the police. While New York has 42,000 police officers, Colombia has 75,000. And please, keep in mind, Colombia has more than 1 million and 200,000 square kilometers, 44 million people. We have to enlarge the police and the army, and we have to provide them with a more effective legal framework for them to be more effective.

Of course, our policy on security needs to be sustainable. For this, policy needs to have public opinion support. For all that time this policy needs to be in place and to have public opinion support, this policy needs to observe human rights. It’s the only way for us to have a sustainable policy on security. Our commitment to observe human rights is absolute. Any criticism, any constructive criticism will be welcome. My government will take it. I will introduce changes to improve the situation of human rights whenever we need to do it. But with due respect, let me here put my stamp on this regard. Our army and our police have had a long traditional respect to our constitution, a respect to our elected governments.

They have been very responsible to react positively, constructively, when they have received criticism. They are making a great effort to improve in human rights. The Minister of Defense who is in my delegation is making an excellent job to introduce all, to train people in our police and in our army for them to be completely respectful of human rights. Be sure we are doing, we will do our best in this regard. But we need to be effective at protecting our people. We consider that we could be effective and at the same time be respectful of human rights. Effectiveness on human rights, respect, will go hand-in-hand to have a sustainable policy on security in my country.

JK: In the back there, there’s two hands up there. We’ll take both of them. There we go. We have a microphone back there. Yes, sir. Take yours, and then we’ll take the lady in front afterwards. Go ahead.

Audience [JC]: Mr. President, welcome back to Washington. My name is Jose Cardenas of the Senate Foreign Relations Committee. Over the past several weeks, we’ve seen an increase in military operations against the FARC and ELN that have resulted in rising casualties. The fear among many of us is that this is going to prompt retaliation by the guerrilla, the terrorist groups in the cities, in the urban areas. Could you tell us: How is your government preparing for this eventuality? Do you see the possibility that the increase in the military operations in the outer lands are going to result in perhaps an urban terror campaign by the FARC and the ELN?

AU: We do not only fight FARC and ELN. During these six weeks of my administration, the number of casualties on people ceased by government, people belonging to the AUC is larger than the number of the previous four years. My administration has a determination to protect our people, whoever the offender, regardless the offender. Of course, the fear just spreads (Inaudible Portion)—but if we keep, if we maintain our determination to stop terrorist groups finally they will be debilitated, and we will have opportunities to have a very fruitful dialogue, a dialogue with results in favor of peace agreements. We are making all the decisions to protect our urban areas the same that our rural communities. This is one of the reasons supporting our tax on net worth to enlarge our capabilities and to protect the people the urban and in the rural communities. Of course, terror is a permanent threat. But the weaker the government facing terror, the stronger the terrorist groups.

My role is to oppose it. We should not go back because of the threats against urban rural areas. We should always go forward to stop them, to fight them. This is the best way to protect Colombia’s peace. Never forget that we have in Colombia suffered every week terrorist attempts in our cities. In the year 2001, Cali, the second largest city in the country, suffers an average of one terrorist attack weekly. Terror in our urban areas is not new news. We have suffered terror in our urban areas during many decades. It is not time for us to withdraw our effort at getting these groups. It’s time for us to make our effort stronger to stop these groups.

I want not to appease these groups by receding our efforts. I want to provide our people to security by making our efforts stronger and stronger. This is not time for us to calculate more or less threat or less threat. It is time for us to protect our people with determination, with a permanent policy on security and, please, we need your understanding that Colombian government can no longer allow these terror groups to threaten our people. If we fight them in the rural communities, they will take revenge in the urban areas. We have to fight them in all our territory at the same time in the rural communities and in the urban areas. This is our duty to protect our fellow citizens.

JK: And right in front, we have a question there in front of her.

Audience [BA]: Bama Athreya from the International Labor Rights Fund. And actually, a very similar question. Could you please just elaborate a little further on the exact views of your administration towards the AUC.

AU: The same. We have to protect Colombians whoever the offender. If there is an incursion of guerrillas to cease any rural village, if there is an incursion of AUC to produce a mass killing in any area of the country, our police and our army, they have to go after the criminals, regardless if the criminals be AUC, FARC, or ELN. The main goal of our policy on security is protect our people, whoever the offender. When you look at statistics, I want to repeat, it is very important to look at the number of casualties, at the number of, quote, actions we have produced during our six weeks term.

JK: Question that we have in the back, and then one up front here.

Audience [RC]: Mr. President, I just want to say, you have been a very reliable ally in the (Overlap)

JK: Could you identify yourself?

RC: Robert Charles.

JK: Thank you.

RC: Former Congressional staffer. A very reliable ally in both the war on terrorism and counter-narcotics. And I have a difficult but specific question for you as you, particularly with Chairman Kolbe here. Can you identify for us, for this group and the larger audience the assets, the type of, the nature of the support and the importance of the support that you may need to succeed in the mission you’ve identified here, particularly as it relates to counter-narcotics and terrorism?

AU: Colombia has to destroy narcotics. This is the only way for us to take terror away from our country. I have supported Plan Colombia, because this is the first time we go from rhetoric to practical procedures, to practical actions. However, when Plan Colombia was put in place, the goal was to destroy 50 percent of Colombia production of cocaine. Our goal is to destroy 100 percent. Each year Colombia has sprayed 50,000 hectares. During my term, we have sprayed 25,000 hectares.

We will not stop. We will spray and spray. We will intercept. We will seize. We will do all the best every day and every night to destroy narcotics in Colombia. (Inaudible Portion)—we have to maintain Plan Colombia and to expand it. It is very important to have resources to fund practical projects, to substitute legal crops for illegal activities (sic). We have a problem with 80,000 Campesino families. My pilot project I want to undertake and I need the help of your government. It’s to reach an agreement with 50,000 Campesino families for them to eradicate illegal crops and to keep the forest recovery and to be paid for that. We have thought to pay $2,000 per family yearly.

It is very important to consider that our ecology has suffered a lot because of illegal crops. More than one 1,400,000 hectares of tropical jungle have been destroyed because of illegal drugs. One priority is to restore the jungle. Colombia is the second country in the world with self-water availability and one of the first seven in biodiversity. It is very convenient for ecological purposes to pay our peasants for them to destroy drugs and to recover the tropical jungle. Let me make a point regarding the coffee region. In the coffee region, we have a very high problem. There are roughly 17,000 hectares of coca intertwined with coffee trees. Very difficult to eradicate. We will do our best even to spray some places. But we need to give them incentives. Congressman Kolbe mentioned the fall of our coffee prices. One point is to give Colombian coffee in price the premium of its quality. This is one of the points we need to talk to your government and to your Congress. Whenever Americans begin to pay a premium for the quality of our coffee, this will be a very good stimulus for us to go to the coffee region with two tools. In one hand, the bomb to spray. In other hand, the incentive to call coffee producers: Please grow coffee. Don’t grow coca. And the final point I want to make to answer your question is that we need assistance on intelligence.

JK: Before I call on our final questioner, let me acknowledge the presence of two very distinguished and capable ambassadors from the Diplomatic Corps here: Ambassador Luis Moreno, the Colombian Ambassador to the United States and Ambassador Ann Patterson, the U.S. Ambassador to Colombia. Thank you very much for your presence here (Applause). And I believe our final questioner will be right here. Just hold on one moment for the microphone’s coming to you here.

Audience [BP]: Mr. President, Bill Price from the Council of the Americas. And we wanted to let you know that the reaction from your speech to our council in New York was very, very positive and remains so. But I wanted to ask a question, though, on the free trade of the Americas. If you could tell us a little bit about your ... for success in achieving (Inaudible) 2005.

AU: My government will support the agreement. We consider very important the step taken by the U.S. Government and by the U.S. Congress to approve of the ADPA as previous step for us to go forward and to speed up the agreement of free trade area for the Americas. But let me explain to you that we need political support in our countries. When you see the case of agriculture, the case of the fall of prices, for example, of coffee. The situation creates an environment anti-free trade. We want to create a positive political environment, not only in Colombia but in South

America, one emphasizing free trade. In South America, you see many elections for president and for people of Congress based on the issue of free trade or protection. If people do not consider free trade as a way to improve their standard of life, people want to support free trade. The case of agriculture is very important.

My answer is: Yes. My government will support free trade but with justice in every case. Keep in mind the necessity to introduce justice in the trade of agriculture. This is the final question. Let me say to you that my stand against violent groups in Colombia has a priority to protect our people. This is the reason we need to fight these violent groups. However, my government will do the best to open doors for a dialogue. The Secretary-General of United Nations has accepted action of good offices. I have to handle it with confidentiality. And all the groups in Colombia, FARC, ELN and AUCs, are invited to come to a dialogue.

The condition I put as candidate, and I want to repeat today, is that we need a cease of hostilities, otherwise it is impossible to have a dialogue with groups committing terror act. The only way for us and for the international community to understand that we try to dialogue with these groups is that they stop terror act. This is the reason I have asked for a cease of hostilities. And finally, I want to recognize and to—my testimony to yours, Congressman Kolbe, to applaud, applaud the excellent job of our two ambassadors. They are an example of going from rhetoric to practical decisions. Thank you very much (Applause).

JK: Mr. President, I know, I believe that your remarks and your responses of the question here today demonstrate the confidence that the Colombian people have placed in you in giving you this responsibility at such a moment of importance in Colombia’s history, the wisdom of the Colombian people in giving you this responsibility. I know that I speak for everyone here in saying, “We thank you very much for giving us your time, and I believe that I speak for all the American people in saying you could return to Colombia with our best wishes for success in bringing peace to your country and security to your people.” Thank you very much, Mr. President (Applause).