ANDEAN POLICY FALLS SHORT OF REGION'S NEEDS

The Andean region is teetering on the verge of collapse, and the
implications are serious for the security of the United States and the
Western Hemisphere. Recent U.S. policy in the region has narrowly
concentrated on the drug war in Colombia, though after 9/11 it added a
strong anti-terrorism component. Although the drug policies have produced
some positive results, this limited impact falls far short of the region's
needs.

The U.S. focus on drugs in Colombia largely has neglected the other
countries in the region. Venezuela is a powder keg ready to blow. Ecuador
is plagued by habitual instability. Although strong economically, Peru is
adrift politically. Bolivia could erupt again. In short, the prospect of
regional collapse is real.

This is one principal finding produced by a Council on Foreign Relations
commission we co-chaired, "Andes 2020: A New Strategy for the Challenges of
Colombia and the Region." U.S. drug policy is embodied in the multi-billion
dollar Plan Colombia and the annual Andean Counterdrug Initiative. However,
Plan Colombia expires at the end of 2005. Andes 2020 outlines the next
phase of U.S. engagement after Plan Colombia ends and recommends a new
strategy with practical solutions.

Our drug-war policy can be improved in four areas: We need to approach the
problems regionally, not country by country; rural development, including
land reform, is necessary to transform the areas where the drug war takes
place; targeting the baby cartels that run the drug trade will strike a
blow to the industry as a whole; and we need to address the demand side of
the problem in addition to the supply side.

The spraying of illicit crops has decreased coca production in Colombia,
but these were offset by rises in Bolivia and Peru. This "balloon effect,"
when drug traffickers move coca up and down the Andes mountain chain, is
the Achilles' heel of our drug policy. Reorienting U.S. counter-drug policy
to emphasize a regional approach, not a bilateral approach, could help pop
the balloon.

The current approach is out of touch with rural realities. There is no
effective "carrot and stick" method to solving the problems, because Andean
nations cannot provide effective law enforcement or incentives for economic
development in rural areas. The laws of economics suggest that coca
eradication cannot be completely successful as long as poor people have
only one viable option: to grow the most profitable crops, coca or poppy.

Along with the counternarcotics programs, Washington needs to dramatically
increase funding for economic development and employment-generation
programs. These are needed as part of a broad rural-development strategy
that includes land reform, investment, increased revenue generation from
local elites and the extension of social safety nets for farmers affected
by the global economy.

Since our successful operations against the Medellin and Cali cartels, we
have neglected the numerous "baby cartels" that operate under the radar
screen of U.S. policy. Using powers in the USA Patriot Act, the
administration should create an interagency team to financially decapitate
these groups by freezing the assets of those supporting drug-trafficking
and terrorism.

Finally, though policymakers have voiced recognition of the need to reduce
demand, U.S. policy disproportionately spends resources on supply control
efforts. A 1994 RAND study found that investing $34 million in treatment
reduces cocaine use as much as spending $783 million for foreign source
country programs (e.g., spraying) or $366 million for interdiction.

One specific idea to address the global issue of drug demand is the
creation of a special World Bank development program for drug-cultivating
countries, funded by the top 20 consuming countries in the world. These
countries would contribute 10 percent of their annual counter-drug budgets
to this World Bank fund, which would disburse aid for development programs
in areas where eradication took place and replanting needs to be prevented.
The U.N. Office on Drugs and Crime would verify the successful elimination
of cultivation by producing countries. They would then receive access to
the bank's special development fund and more flexible terms from the
International Monetary Fund.

In light of the other security crises around the globe, we are not calling
for an increase, or a reduction, of American commitment to the region. But
right now the United States is spending billions of dollars on a drug war
that is failing. Our efforts, as correct as they may have been in 1999, are
also undermining other major goals in the region: security, democracy and
prosperity.

To make the U.S. policy truly effective for this vital region, the U.S.
government must extend Plan Colombia but restructure its priorities and
resources. Together with the international community, we must commit to a
policy of continued engagement with the Andean region that delivers
improved and sustainable results for local government and the region's
citizens -- and that serves U.S. strategic interests. The planning for this
renewed commitment must start now.