FACTBOX-Key political risks to watch in Colombia
By Jack Kimball
BOGOTA Dec 2 (Reuters) - Ongoing bloodshed caused by guerrillas and drug gangs, growing protests against oil and mining companies and sensitive ties with neighbors Venezuela and Ecuador are key risks to watch in Colombia.
THE WAR, GUERRILLAS AND DRUG GANGS
Colombia dealt Marxist guerrillas one of the strongest blows in their history, killing rebel chief Alfonso Cano in early November. However, the Revolutionary Armed Forces of Colombia (FARC) dashed hopes that his death might bring the Andean nation closer to peace when they chose hard-liner Timoleon Jimenez, or "Timochenko", as their new leader.
Chances of ending the nearly five-decade war seemed even more elusive after the government said FARC rebels executed four members of the security forces who had been held hostage for more than a decade. [ID:nCOLOMBIA]
Santos has kept up former President Alvaro Uribe's tough stance against left-wing rebels and drug gangs, and pledged to further improve security in the next three years. The 60-year-old has said that an end to the war is possible but rebels must first release hostages and stop violence. The FARC says it wants peace but refuses to demobilize. Nearly every government since the 1980s has tried peace talks with illegal armed groups from smaller guerrilla outfits to right-wing paramilitaries with varying degrees of success.
New FARC boss, Timochenko, is believed to move across the Colombia-Venezuela border, and there is a chance the focus of the conflict could shift from the south - where his predecessor was killed - to the northeast, along the porous border.
Colombia is one of the world's top producers of cocaine, and a myriad of illegal armed groups are engaged in the drug trade. Marxist rebels have teamed up with drug-trafficking gangs and ex-paramilitaries in some areas, and are battling for control of smuggling routes in others.
New criminal bands known by their Spanish acronym "Bacrim" are widely seen as a major threat. The capture in Venezuela of the leader of "Los Paisas" gang was a major blow to the group although it may trigger a short-term spike in bloodshed as members fight over the leadership.[ID:nN1E7AR0UH]
What to watch:
- More blows to FARC leadership.
- Violent reactions by rebels to their leader's death.
- Growing influence of criminal gangs.
PROTESTS AND ATTACKS AGAINST OIL AND MINING
Improved security has led to billions of dollars in investment by oil and mining companies, and now that the country is safer, communities are demanding more jobs, repairs for infrastructure damage and better living standards. [ID:nN1E7A505O] Protests coupled with continued attacks on oil and mining operations by rebels are a headache for the scores of foreign investors in Latin America's No. 4 oil producer.
Major oil producers such as Ecopetrol and Pacific Rubiales have faced demonstrations at fields and refineries, and although production shutdowns have usually been short-lived, they could weigh more on companies going forward.
For coal producers, an worker's accidental death at Drummond's mines sparked a short protest while demands for better pay and working conditions at Glencore's Prodeco unit shut down one mine for eight days. [ID:nN1E7A80HP]
While rebel attacks on oil and mining projects have decreased, bombings and kidnappings still pose a threat to operations in the world's fourth-largest coal exporter.
The government plans to add 6,000 soldiers to a total of around 70,000 troops currently defending oil and mining operations. [ID:nN1E7A8243]
What to watch:
- More attacks on oil and mining operations
- Protests by local communities
- Companies reactions to violence and protests
LA NINA AND THE ECONOMY
Heavy rains caused by the La Nina weather phenomenon battered Colombia this year and last year, destroying key infrastructure such as roads and bridges, washing away homes and killing 385 people so far in 2011.
The downpours have also pushed up inflation - currently slightly above the central bank's 2011 target - and hurt coffee output in the world's top producer of high-quality Arabica beans. [ID:nN1E7AR0O4]
Global economic uncertainty has created volatility in the peso currency, increasing concerns among policy makers that the Colombian economy might face fallout if the world economy were to enter into recession. The central bank had paused rates from August to October to monitor the impact of the euro zone debt crisis and anemic growth in the United States, but rising inflation forced it to hike rates in November. [ID:nN1E7AL11T]
What to watch:
- Continued impact from heavy rains.
- Further rate hikes to cool inflation.
- Fallout from global woes on Colombia's economy.
TENSIONS WITH NEIGHBORS
Tensions between Colombia and left-wing neighbors Venezuela and Ecuador have eased considerably since Santos took office last year, but ideological differences remain. There are worries that computer files seized after the killing of FARC's top commander might raise uncomfortable diplomatic questions about the neighbors' involvement in Colombia's long war.
Santos, however, is in a better position to manage any tensions coming out of the files than his more confrontational predecessor. He has vowed to ask Caracas for help tracking down Timochenko if intelligence information were to indicate that he was in Venezuela. [ID:nL5E7ML24N]
In a move hailed by both leaders as a sign of unity, Santos and Venezuelan President Hugo Chavez announced the arrest of a major Colombian drug trafficker in Venezuela, which has become a key shipment route for Colombian cocaine to the United States and Europe. [ID:nN1E7AR0UH]
What to watch:
- Joint security operations directed at FARC leaders.
- How Santos manages any flare-ups in relations again.
- Improving bilateral trade with Venezuela.
Source http://af.reuters.com/article/energyOilNews/idAFRISKCO20111202?sp=true
BOGOTA Dec 2 (Reuters) - Ongoing bloodshed caused by guerrillas and drug gangs, growing protests against oil and mining companies and sensitive ties with neighbors Venezuela and Ecuador are key risks to watch in Colombia.
THE WAR, GUERRILLAS AND DRUG GANGS
Colombia dealt Marxist guerrillas one of the strongest blows in their history, killing rebel chief Alfonso Cano in early November. However, the Revolutionary Armed Forces of Colombia (FARC) dashed hopes that his death might bring the Andean nation closer to peace when they chose hard-liner Timoleon Jimenez, or "Timochenko", as their new leader.
Chances of ending the nearly five-decade war seemed even more elusive after the government said FARC rebels executed four members of the security forces who had been held hostage for more than a decade. [ID:nCOLOMBIA]
Santos has kept up former President Alvaro Uribe's tough stance against left-wing rebels and drug gangs, and pledged to further improve security in the next three years. The 60-year-old has said that an end to the war is possible but rebels must first release hostages and stop violence. The FARC says it wants peace but refuses to demobilize. Nearly every government since the 1980s has tried peace talks with illegal armed groups from smaller guerrilla outfits to right-wing paramilitaries with varying degrees of success.
New FARC boss, Timochenko, is believed to move across the Colombia-Venezuela border, and there is a chance the focus of the conflict could shift from the south - where his predecessor was killed - to the northeast, along the porous border.
Colombia is one of the world's top producers of cocaine, and a myriad of illegal armed groups are engaged in the drug trade. Marxist rebels have teamed up with drug-trafficking gangs and ex-paramilitaries in some areas, and are battling for control of smuggling routes in others.
New criminal bands known by their Spanish acronym "Bacrim" are widely seen as a major threat. The capture in Venezuela of the leader of "Los Paisas" gang was a major blow to the group although it may trigger a short-term spike in bloodshed as members fight over the leadership.[ID:nN1E7AR0UH]
What to watch:
- More blows to FARC leadership.
- Violent reactions by rebels to their leader's death.
- Growing influence of criminal gangs.
PROTESTS AND ATTACKS AGAINST OIL AND MINING
Improved security has led to billions of dollars in investment by oil and mining companies, and now that the country is safer, communities are demanding more jobs, repairs for infrastructure damage and better living standards. [ID:nN1E7A505O] Protests coupled with continued attacks on oil and mining operations by rebels are a headache for the scores of foreign investors in Latin America's No. 4 oil producer.
Major oil producers such as Ecopetrol and Pacific Rubiales have faced demonstrations at fields and refineries, and although production shutdowns have usually been short-lived, they could weigh more on companies going forward.
For coal producers, an worker's accidental death at Drummond's mines sparked a short protest while demands for better pay and working conditions at Glencore's Prodeco unit shut down one mine for eight days. [ID:nN1E7A80HP]
While rebel attacks on oil and mining projects have decreased, bombings and kidnappings still pose a threat to operations in the world's fourth-largest coal exporter.
The government plans to add 6,000 soldiers to a total of around 70,000 troops currently defending oil and mining operations. [ID:nN1E7A8243]
What to watch:
- More attacks on oil and mining operations
- Protests by local communities
- Companies reactions to violence and protests
LA NINA AND THE ECONOMY
Heavy rains caused by the La Nina weather phenomenon battered Colombia this year and last year, destroying key infrastructure such as roads and bridges, washing away homes and killing 385 people so far in 2011.
The downpours have also pushed up inflation - currently slightly above the central bank's 2011 target - and hurt coffee output in the world's top producer of high-quality Arabica beans. [ID:nN1E7AR0O4]
Global economic uncertainty has created volatility in the peso currency, increasing concerns among policy makers that the Colombian economy might face fallout if the world economy were to enter into recession. The central bank had paused rates from August to October to monitor the impact of the euro zone debt crisis and anemic growth in the United States, but rising inflation forced it to hike rates in November. [ID:nN1E7AL11T]
What to watch:
- Continued impact from heavy rains.
- Further rate hikes to cool inflation.
- Fallout from global woes on Colombia's economy.
TENSIONS WITH NEIGHBORS
Tensions between Colombia and left-wing neighbors Venezuela and Ecuador have eased considerably since Santos took office last year, but ideological differences remain. There are worries that computer files seized after the killing of FARC's top commander might raise uncomfortable diplomatic questions about the neighbors' involvement in Colombia's long war.
Santos, however, is in a better position to manage any tensions coming out of the files than his more confrontational predecessor. He has vowed to ask Caracas for help tracking down Timochenko if intelligence information were to indicate that he was in Venezuela. [ID:nL5E7ML24N]
In a move hailed by both leaders as a sign of unity, Santos and Venezuelan President Hugo Chavez announced the arrest of a major Colombian drug trafficker in Venezuela, which has become a key shipment route for Colombian cocaine to the United States and Europe. [ID:nN1E7AR0UH]
What to watch:
- Joint security operations directed at FARC leaders.
- How Santos manages any flare-ups in relations again.
- Improving bilateral trade with Venezuela.
Source http://af.reuters.com/article/energyOilNews/idAFRISKCO20111202?sp=true
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