www.alertnet.org NEWSDESK   21 Jan 2003 18:19

By Luis Jaime Acosta

BOGOTA, Colombia, Jan 21 (Reuters) - Far-right Colombian warlord Carlos Castano said on Tuesday his outlawed militiamen would free three U.S. citizens they are holding "for their own safety" in jungle near the Panamanian border.

Castano, commander of the 10,000-strong United Self-Defense Forces of Colombia, known as "AUC" in Spanish, said paramilitary fighters in the northern Colombian province of Choco would hand over the three Americans to a humanitarian delegation later in the day.

Mark Wedeven, Megan Smaker and Robert Young Pelton were reported missing by Panamanian police over the weekend near the Darien Gap, a lush and violent jungle area that borders Panama and Colombia. The Darien Gap, a weapons-for-drugs corridor, is prowled by right-wing paramilitaries and rebels fighting in Colombia's four-decade war.

In an e-mail sent to Reuters, Castano said the Americans were being held for their own "safety" after paramilitary fighters found the three near a border area in Colombia that had been attacked by rebels of the 17,000-strong Revolutionary Armed Forces of Colombia, known as FARC.

"I was informed yesterday that fighters of the (paramilitary) Elmar Cardenas Block patrolling the area ... found some foreign citizens in confusing circumstances... The block's commander asked them to accompany him to be handed over to human rights representatives or church officials to avoid putting their lives at risk," he said.

"This incident cannot be considered to be a forced retention, even less kidnapping, since the Elmar Cardenas Block fighters assured me they did not use force, and that they will clear up the details of what happened today since they were simply taking a precaution to ensure the foreigners' safety."

It was not immediately clear what the three Americans were doing in the area, Panamanian police said.

But they contradicted Castano's version of events, saying paramilitary fighters attacked two Indian villages on the Panamanian side of the border killing five community leaders.

Indigenous leaders told Panamanian police some 70 paramilitaries attacked the towns of Pucuro and Paya on Saturday.

HOLDING CEASE-FIRE

The AUC, a brutal vigilante force that targets rebels and suspected civilian sympathizers, has held to a unilateral cease-fire since Dec. 1.

If the Panamanian police's version is confirmed, it could mean a breach of the paramilitaries' cease-fire -- a condition set by Colombian President Alvaro Uribe for holding peace talks with illegal armed groups.

It was not the first time foreigners have been caught in the middle of Colombia's war, which claims thousands of lives every year.

In 1993, FARC rebels kidnapped three U.S. missionaries near the border with Panama and killed them execution-style, Colombian authorities said.

In 1999, three American Indian rights activists were kidnapped by FARC rebels in the province of Arauca, in eastern Colombia. The three Americans, whom rebels accused of being members of the CIA, were tied with nylon cords, blindfolded and shot. Their bodies were dumped across Colombia's northeastern river border with Venezuela, authorities said. (Additional reporting by Robin Emmott in Panama City; Editing by Christopher Wilson; Reuters Messaging:luis.acosta.reuters.com@reuters.net; +571 634 4090)

news.ft.com By James Wilson in Bogotá Published: January 16 2003 21:23 | Last Updated: January 16 2003 21:23

With a recent spate of bomb attacks, Colombian guerrillas have continued to defy President Alvaro Uribe's security crackdown in the oil-rich Arauca province.

Arauca, which borders Venezuela, and is the location of a large oilfield operated by US oil company Occidental, has become a centrepiece of the government's counter-insurgency strategy.

In September the government imposed greater limitations on civil liberties on a special zone including three of Arauca's town. A heavier military presence was diverted to the zone, as well as plans for more investment.

US forces are set to arrive in Arauca to train Colombian troops to protect the oil pipeline used by Occidental, a frequent target of attacks.

This week's resignation of the province's governor has further highlighted the government's struggle to pacify the province, a hotbed of rebel activity and a key testing ground for Mr Uribe's hardline security policies.

The government was on Thursday expected to announce a replacement for José Emiro Palencia, a retired colonel appointed by the president as Arauca's governor only three months ago.

Mr Uribe's government says rebel activity has decreased in the security zone. But five people have been killed in car bombs this month in the province, showing the rebels have not been cowed by the extra attention being focused on Arauca and still  maintain their regional military net.

A suspected guerrilla member was also killed this month in an attempted car bomb attack in the security zone.

Colombia's army has accused the country's largest guerrilla group, the Revolutionary Armed Forces of Colombia (Farc), of using kidnapped civilians to drive two of the other vehicles that exploded in recent days, in what would be a gruesome new tactic by the rebels.

Marta Lucía Ramírez, the defence minister, has warned not to expect results too quickly as a result of the government's increased military build-up. But many political observers believe Mr Uribe's current high popularity ratings will only be maintained if he manages to show dramatic results against the rebels in coming months.

Some extra powers that the government had wanted to use in Arauca and in another security zone in northern Colombia were also overturned by a constitutional court ruling. The government is expected in March to introduce plans to change laws so the army can be given a freer hand to detain suspects.

news.ft.com By James Wilson in Bogotá Published: January 16 2003 1:44 | Last Updated: January 16 2003 1:44

The International Monetary Fund on Wednesday gave its anticipated blessing to Colombia's economic plans by approving a 2-year, $2.1bn stand-by agreement with President Alvaro Uribe's government.

The IMF's backing for Colombia is in contrast to the difficulties of some Latin American neighbours in getting the Fund to approve loan agreements. It caps months of strong lobbying by Mr Uribe in which multilateral lenders such as the World Bank also agreed to increase their exposure to Colombia.

Mr Uribe had argued that Colombia deserved more international financial support to compensate for his government's need to boost military spending in an effort to counter drug trafficking and a widespread guerrilla insurgency. Multilateral lenders are offering Colombia $8bn over the next 3 years, thought to be one of the largest loan programmes ever in Latin America relative to the size of the economy.

Horst Köhler, the IMF's managing director, described Colombia's economic roadmap as a "strong reform programme" echoing the views of Wall Street analysts who have welcomed a slate of tax-raising and cost-cutting measures approved by Colombian lawmakers at the end of last year.

Colombia came under IMF tutelage in 1999 after the worst recession of the century but did not draw on any of the $2.7bn offered by the Fund over the past 3 years. The IMF said Colombia would also treat the new credit as precautionary.

Colombia says it will slash its public sector deficit to 2.5 per cent this year from more than 4 per cent in 2002. It is also pledging to strengthen the financial system and sell off state-owned Bancafé, one of the country's biggest banks, by the end of this year.

Colombia is forecasting economic growth of 2 per cent in 2003, a slight increase on last year. But the government is warning that the political and economic crisis in neighbouring Venezuela, Colombia's second most important export market, could cut cross-border sales by more than half this year.