NEW CHALLENGE TO U.S. DRUG POLICY IN ANDES

Peruvian Candidate's Pledge to Halt Coca Eradication Follows Breaks
in Cooperation by Neighbors

LIMA, Peru -- The front-running presidential candidate in Peru,
having pledged to put a stop to coca eradication, represents the
latest challenge to a regional U.S.-financed counternarcotics effort
that shows signs of fraying at its edges, according to U.S. and South
American analysts.

Like the recently elected Bolivian president, Evo Morales, Ollanta
Humala has campaigned against the coca eradication programs that are
central to an anti-drug plan in the Andes. Humala says much of the
coca being cultivated is being used in teas and traditional
medicines, not being turned into cocaine.

"We're going to protect the coca grower, and we're going to stop the
forced eradication of their crops," he said during a rally last
month, La Republica newspaper reported. "It must be understood that
there are more than 30,000 families that cultivate coca leaf, and no
government has ever protected them."

The United States has poured about $5 billion into an Andean
anti-drug plan since 2000, including about $720 million in Peru. But
if Humala wins the decisive second-round election, to be held in May
or early June, the United States' main ally in its eradication
efforts -- Colombia -- will stand as a virtual island in the Andes,
surrounded by countries with governments critical of Washington's
policies. If continued breakdowns in cooperation occur in Venezuela,
Peru, Bolivia or Ecuador, some U.S. officials say they fear that
progress made to fight coca cultivation in Colombia could be
undermined as production migrates across its borders.

Recent U.S. government estimates suggest such shifts have already
begun. Despite record eradication hauls in Colombia, coca production
has been on the rise in Bolivia for each of the past four years. In
Peru, U.S. government analysts detected a 23 percent increase in the
traditional cultivation zones between 2004 and 2005; when including
data from new zones of cultivation, Peru's annual increase was 38 percent.

For years, U.S. counternarcotics officials dismissed the "balloon
effect" -- the shifting of the drug problem from one area to another
- -- as a myth perpetuated by critics. But now the idea is widely
accepted, even among some of the anti-drug program's most steadfast supporters.

Aggressive aerial spraying in Colombia "is forcing drug traffickers
to move shop, and they are on the run replanting in other parts of
Colombia and crossing borders into Ecuador and Peru," Rep. Dan Burton
(R-Ind.) said recently in testimony before a congressional hearing
about anti-drug strategies in Latin America. "This balloon effect
must be tamped down."

Persuading neighboring Andean leaders to cooperate is an increasingly
difficult challenge as the region's elected governments call for more
independence from U.S. intervention. In Venezuela, President Hugo
Chavez last year disbanded several enforcement units supported by the
U.S. Drug Enforcement Administration, and President Bush consequently
decertified Venezuela as a cooperating partner in the drug fight.

In Ecuador, the government has refused U.S. requests to condemn
Colombian guerrilla groups suspected of widespread drug trafficking,
preferring to remain neutral in the Colombian conflict. Eradication
in Bolivia has slowed since Morales took office in January, though he
says his government's coca agency -- formerly called Coca Control,
now named Coca Development -- aggressively opposes cultivation of
coca intended to be used in cocaine.

Humala has adopted Morales's slogan of "Zero Cocaine -- Not Zero
Coca," and he says he wants to strengthen the legal marketplace for
coca by promoting such products as coca teas and herbal medicines. To
combat hunger, his campaign has proposed the daily distribution of 27
million loaves of bread made with coca to impoverished schoolchildren.

Humala, a 43-year-old former lieutenant colonel in the army who led a
coup attempt in 2000, also named two coca farmers to his party's
slate of congressional candidates. Nancy Obregon, who won a seat in
the legislature, said she would try to push legislation banning the
kinds of U.S.-financed eradication efforts that last week eliminated
about 1,600 acres of coca from her home district of San Martin.

"We must have a sovereign national government that comes up with its
own solutions, because the U.S. government sees no difference between
coca leaves and cocaine," said Obregon, who says she grows the plants
for legal purposes.

American officials in Peru and Bolivia insist that a more permissive
attitude toward cultivation will mean more cocaine shipped to the
United States. They contend that most of the coca grown in those
countries is used for drugs, despite the denials of Morales, Humala
and many of their supporters.

The United States has taken a wait-and-see approach with Morales,
pledging to take his promises to fight illegal cultivation at face
value. Since his inauguration in January, eradication has slowed
considerably while drug control officials wait for him to more
clearly define his policies.

Humala would likely get the same treatment, officials said.

"I would expect the response would be what it's been in Bolivia: If
you have a democratically elected leader who has a policy he feels
can combat narco-trafficking and says he wants to talk, we'll listen
and try to work with him," a U.S. Embassy official in Lima said on
condition of anonymity. "But I can't imagine that the U.S. government
would pour resources into a program that it determined couldn't work."

Opponents of U.S. policy have long urged American officials to scrap
forced eradications and put more money into domestic drug prevention
programs. Joy Olson, director of the Washington Office on Latin
America, said the theory behind eradication -- that reduced
availability of the crop will drive up street prices and discourage
cocaine use -- has been proved false by cocaine's continued
widespread availability in American cities at low prices.

If cocaine prices are viewed in a 20-year context -- not the
three-year curve the U.S. government routinely uses to point to price
increases -- they are at near-record lows, about one-fifth of what
they were in the early 1980s. Olson added that harmful side effects
of eradication -- such as environmental and social damage caused by
migrating cultivation zones -- have been evident throughout the
Colombian countryside, where 60 percent of the coca fields detected
in 2004 were newly planted, according to the U.N. Office on Drugs and Crime.

"Every time we have a tactical victory," said Olson, "someone new loses."

But the prospect of scaling back eradication in Peru and the rest of
the region has some fearing a return to the 1980s, when Peru and
Bolivia were the world's top producers of coca leaves. In the 1990s,
Peru's farmers widely abandoned coca when prices for the crop fell
and most production moved north to Colombia. Currently, Colombia
produces about 90 percent of the cocaine and more than half of the
heroin that ends up in the United States.

Ruben Vargas, a national security analyst and former counterterrorism
and narco-trafficking official with Peru's Interior Ministry, said he
believes the eradication efforts can help Peru, but only if its
government throws its full support behind them and maintains the
international funding that pays for 95 percent of its
counternarcotics operation."If Humala wins the election, the
international cooperation will probably be cut, and we'll move
backward," Vargas said. "And that would leave Colombia more isolated.
It's a big problem."