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Colombia Defence and Security Report Q1 2008

Published by: Business Monitor International

Published: Dec. 24, 2007 - 48 Pages


Table of Contents


Executive Summary
SWOT Analysis
Colombia Political SWOT
Colombia Security SWOT
Colombia Defence Industry SWOT
Colombia Economic SWOT
Colombia Business Environment SWOT
Political Overview
Domestic Political Outlook
Political Risk: Uribe Still Weathering Storm
External Political Outlook
Frosty Relations
Uribe And Chávez Inaugurate Gas Pipeline
Security Risk Analysis
BMI’s Security Ratings
Risk Ratings
Table: Regional Risk Ratings
Table: State Terrorism Vulnerability Index
Colombia Security Risk Rating
Colombia Conflict Risk
Colombia Terrorism Risk
Colombia Physical Safety Risk
Security Overview
Internal Security Situation
Civil War?
Paramilitary Demobilisation
FARC and Counter-Insurgency
Negotiations With The ELN
External Security Situation
Colombia-US Relations
Colombia-Venezuela Relations
Colombia-Ecuador Relations
Military Structure & Defence Industry
Armed Forces
Table: Regional Armed Forces (including conscripted) 2007
International Deployment
Table: Foreign Deployments
Market Overview
Arms Trade Overview
Imports
Industry Trends & Developments
Procurement Trends & Developments
Industry Forecast Scenario
Table: Colombia Defence Sector Historical Data & Forecasts
Table: Colombia Defence Sector Historical Data & Forecasts
Key Risks to BMI’s Forecast Scenario
Macroeconomic Forecast
BanRep Showing Undue Aggression?
Table: Colombia - Economic Activity
Competitive Landscape
Table: Key Players - Colombia Defence Sector
Company Profiles
Industria Militar (Indumil)
BMI Forecast Modelling
How we generate our industry forecasts
Defence Industry
Sources


Abstract

During Q407, the administration of President Álvaro Uribe enjoyed some success in its struggles with the
Fuerrzas Armadas Revolucionarias de Colombia (FARC) and drug smugglers. In late October, FARC
commander Martin Cabellero, along with 18 other rebels, died in a battle with the Colombian army. The
regional and municipal elections went ahead in October largely without incident. Voters chose 32
governors, 418 provincial legislators, 1,098 mayors and 12,030 council members across all but two of
Colombia’s 1,098 municipalities.


These developments followed the arrest in Q307 of several leading drug smugglers, including Diego
Montoya, who had been widely recognised as being the leader of the Norte del Valle drug cartel. In early
November, the US Drug Enforcement Agency (DEA) reported that there were clear signs of disruption in
the markets for cocaine (and for methamphetamines). The DEA has found that, in the first nine months of
2007, the street price per gram of cocaine has risen by 44%, while the level of purity has fallen by 15%.
Despite the arrests, there are several grounds for concern. For instance, there is some evidence of the
emergence of new armed groups in the wake of the disbanding of the Autodefensas Unidas de Colombia
(AUC). The International Crisis Group, for one, believes that the government’s plans for the reintegration
of paramilitaries into normal society is ‘deeply flawed’. Meanwhile, much of the action has shifted across
the porous border into neighbouring Venezuela, where crime is soaring. Indeed, some sources suggest
that the murder rate in Venezuela is now significantly in excess of that of Colombia, which has long held
a justified reputation for being a violent country.


In the meantime, relations between Colombia and Venezuela have deteriorated further. As noted in Q307,
the Colombian government had been concerned about the purchases of large quantities of firearms
(including 100,000 AK assault rifles from Russia) by the Venezuelan armed forces: the Colombian
government is concerned that these weapons will find their way to paramilitary groups or drug smugglers
in Colombia. Towards the end of November, Venezuela’s President Hugo Chávez ‘froze’ relations with
the government of Colombia. This was in response to President Uribe’s decision to end the role of
President Chávez as intermediary in negotiations with FARC. The implication is that an immediate
release of the 44 ‘exchangeable’ hostages held by FARC (including former presidential candidate Ingrid
Betancourt) appears very unlikely.


In mid-October, the International Crisis Group (ICG) released a report, Colombia: Moving Forward with
the ELN, which suggested that the peace negotiations between the government and the Ejercito de
Liberación Nacional face failure unless substantial bottlenecks are overcome. The ICG suggested that a
cease-fire is a necessary, but not sufficient condition for peace. ‘The ELN should release kidnap victims,
de-mine some areas, make more information available and propose a model for ceasefire implementation
and verification. The Uribe administration should be more flexible on a complete cessation of hostilities
and the concentration and identification of ELN troops in a ceasefire. Norway, Spain and Switzerland
should consider offering expertise on ceasefires and related matters.’
Colombia’s indigenous arms industry is small, but is looking to expand sales throughout South America
and, indeed, further afield.



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