TENSIONS SOAR IN COLOMBIA AND NEIGHBORING COUNTRIES, REGION CHURNING
AS U.S. PREPARES TO LAUNCH DRUG ASSAULT

BOGOTA, Colombia -- As the United States launches a $1.3 billion
program to bring Colombia's drug and insurgency problems under
control, dangerous social and political trends are developing in
nearby countries that threaten to turn the entire region into a
tinderbox, senior U.S. officials say.

These officials and some of their Latin American counterparts warn
that the next U.S. administration will confront a number of serious
challenges concentrated in the Andean region of South America. Most of
the problems, they say, are independent of the huge and
well-publicized mess that already awaits the next administration in
war-racked Colombia.

The military unrest and political upheaval that led to last month's
ouster of President Alberto Fujimori in Peru offer only a glimpse of
the problems on the horizon, U.S. and Latin American officials say.
There remains a high potential for coups, armed rebellions, refugee
crises and social unrest extending from Bolivia all the way to the
Panama Canal.

"All of these issues highlight the fact that the roots of democracy
maybe aren't running as deeply as everyone thought," said a senior
Pentagon official in Washington.

In the past year alone, the region has witnessed an army-backed coup
and indigenous uprising in Ecuador, a military split in Peru and armed
confrontation between peasant farmers and troops in Bolivia. There are
increasing signs of military disgruntlement with Venezuelan President
Hugo Chavez.

There also are growing border tensions between the government of
Venezuela and some of its neighbors. In Panama, business and political
leaders have openly discussed the possibility of forcefully ousting
President Mireya Moscoso, whose government is mired in economic problems.

"Every one of those economies is in the tank," said the Pentagon
official. "If you have a very strong political foundation and strong
commitment to democracy, you can handle an economy that's in the tank.
If you don't, then . . . all bets are off."

In the middle of all this, senior U.S. officials say, are signs of
increasing adventurism by Cuba's Communist government and a close
alliance developing between Cuban leader Fidel Castro and Chavez of
Venezuela.

The two governments are sharing intelligence and cooperating on
security matters and have even begun offering those services to other
governments interested in distancing themselves from the United States.

Chavez has engineered a wholesale replacement of his country's
constitution, along with the legislature, judiciary, executive branch
and labor-union leadership. With Venezuela's economy experiencing a
boost from high oil prices, and emboldened by the country's leadership
role in the Organization of Petroleum Exporting Countries, Chavez has
assumed a more forceful position in regional affairs, even to the
point of urging other nations to reject U.S. advice and military assistance.

By offering security assistance and low-priced oil sales to friendly
nations, Chavez is gaining popularity at a time when the United States
is trying unsuccessfully to rally support behind Plan Colombia, the
$7.5 billion program aimed at dislodging the nation's drug-trafficking
network.

The destabilizing effects of Colombia's drug and insurgency problems
already are testing the nerves, if not the resources, of Colombia's
neighbors, said Ecuadoran Deputy Foreign Minister Luis Gallegos.

"Aside from this security issue, we have a very complex regional
situation, which is not only a Colombian or Ecuadoran affair, or just
an Andean affair, it is a hemispheric, regional affair," he said.

Adding to the tensions are the potential "spillover" effects that
Colombia's neighbors are expecting once the U.S.-backed Colombian
military unleashes two of its newly trained counternarcotics
battalions next month.

Ecuador expects thousands of refugees to cross its borders from
Colombia, putting additional strains on an already cash-strapped
government, Gallegos said. With U.S. assistance, the government has
launched a $400 million plan to develop Ecuador's northern border
region with Colombia into a manufacturing and commercial belt capable
of employing Colombian refugees as well as Ecuador's jobless.

Ecuador also is allowing the United States to base counternarcotics
operations in the northern town of Manta.

Panama, however, has consistently rejected U.S. overtures to provide
military hardware, training and security assistance under Plan
Colombia. Both governments say there is lingering distrust toward the
United States.

Last month when Panama held a hemispheric summit, Moscoso's government
pointedly accepted security assistance from Cuba; the United States
stayed away. Some U.S. officials say they are exasperated, especially
considering that Panama has no military force, and that its national
police force is overwhelmed by a larger and more heavily armed force
of Colombian guerrillas and paramilitary fighters based in the Darien
jungle. Illegal arms bound for Colombia are flooding the country.

"If Plan Colombia succeeds -- that is, if the Colombian government
succeeds in getting a handle on the problems there -- there will be
impact on the neighboring countries," the official said. "If Plan
Colombia fails to get a handle on that problem, there will be an
impact on the neighboring countries. In either case, and if Panama
does not have a better fix on what its responses will be, it will go
badly forPanama."