[Marxism] Uribe, president of all the bosses' death squads, will expand war, cut taxes: does this program sound familiar?

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

Uribe, With Win in Colombia, to Extend War, Cut Taxes (Update1)

May 29 (Bloomberg) -- Colombian President Alvaro Uribe, after skating to
a second term with a landslide victory, will seek to extend his war
against guerrilla fighters and press ahead with efforts to reduce taxes
and lure fresh investment.

Uribe, 53, won 62 percent of the vote in yesterday's election, according
to the electoral authority's Web site. Cars in Bogota honked and
hundreds of people chanted `Uribe, Uribe!'' last night as he spoke from
Hotel Tequendama and thanked the country for the chance to serve another
four years.

``We want a modern democracy with security, freedom, transparency and
respect for all institutions,'' Uribe, dressed in a gray suit, said to a
crowd of supporters waving the nation's yellow, blue and red striped
flag.

Uribe's victory paves the way for the South American country's $117
billion economy to keep expanding and stocks and bonds to add to four
years of gains, said Daniel Nino, head analyst at Bancolombia SA, the
nation's biggest bank. Since Uribe took office in August 2002, the
benchmark IGBC stock index has risen 765 percent in dollar terms, and
the yield on the 10 percent dollar bond due in 2012 has fallen to 6.7
percent from 13 percent.

Colombia's peso weakened 0.1 percent to 2,462.50 per dollar at 1:52 p.m.
New York time. The local bond and stock markets are closed today for a
national holiday. Gains are likely when they open May 30, Nino said.

``The market is going to react favorably,'' Nino said.

Different From Chavez

The election sets Colombia apart from South American countries following
Venezuelan President Hugo Chavez's model of seizing multinational
companies' assets and boosting corporate taxes. Uribe fostered relations
with the U.S. and attracted billions of dollars of foreign investment in
his first term.

Hundreds of heavily armed troops stood guard around the Congress
building in Bogota, where Uribe cast his ballot yesterday. The
government deployed more than 220,000 members of the security forces
across the country to guard against violence as 11.6 million Colombians
voted at almost 10,000 polling stations.

Twelve guerrillas were killed and three soldiers wounded in 10 different
shootouts during the day, the army said in a statement. The incidents
didn't affect voters, said Carolina Romero, spokeswoman for the National
Registry, the electoral authority.

Carlos Gaviria of the socialist Polo Democratico Alternativo placed
second in the election with 22 percent of the vote, according to the Web
site of the electoral authority.

Markets Rise

Anticipation of Uribe's victory helped push Colombia's benchmark IGBC
stock market index up by more than 8 percent on May 26.

A second term will enable Uribe to continue his war on the drug-financed
guerrillas, who made Colombia one of the world's most dangerous
countries.

Increased security under Uribe spurred investment and consumption,
driving the economy, which is based on oil, coal, coffee and textiles,
to expand each year since Uribe took office. Growth reached 5.1 percent
in 2005, its fastest pace in 10 years, and the government predicts a
similar rate of expansion this year. Foreign-direct investment rose to a
record $10.2 billion last year from $2.1 billion in 2002.

Since taking office, Uribe, whose father was killed by guerrillas 22
years earlier, has expanded the armed forces as he clamped down on rebel
groups, paramilitaries and drug traffickers. In his almost four years in
office, homicides have fallen by 37 percent and kidnappings by 72
percent.

``For me, there was no question of voting for anyone else,'' said Cesar
Augusto Rodriguez, a 38-year-old car and truck mechanic, as he finished
voting in Bogota yesterday. ``We all feel much more secure nowadays, and
that means more money is spent on things like cars; that helps my
business.''

Congress

Uribe's main challenge will be to get his tax and other proposals
through congress, Nino said.

The president promises to provide health care to all of Colombia's 41
million inhabitants, ensure every child receives an education and make
loans available for the poor to set up businesses. He also plans to cut
the rate of taxation on personal and corporate income and reduce a tax
on financial transactions.

Uribe's backers secured a majority of seats in Congress in the March
elections, boosting his chances of pushing through a free-trade
agreement with the U.S., extending a cap on local government transfers,
cutting the rate of taxation on personal and corporate income and
reducing a tax on financial transactions.

``Uribe's landslide victory gives him huge political capital to put
through the reforms,'' Nino said. ``Also, it emphasizes that Colombians
back the economic reforms and the free-trade pact, which the leading
opposition parties attacked.''

Pensions, local government transfers and interest on debt payment take
up most of the government's revenue, Richard Francis, a credit analyst
for New York-based Standard & Poor's, said in a phone interview.

``As the pending reforms add to flexibility, Colombia more likely than
not would see an upgrade in its credit rating,'' Francis said. ``An
upgrade may happen as soon as the tax bill passes, as long as there's
confidence the transfers cap will also go in place.''

On Feb. 22, S&P raised its outlook on Colombia's foreign- currency bond
rating to positive from stable. The company rates Colombia's foreign
debt BB, two levels below investment grade.

Peace Talks

To further his efforts to end Colombia's four-decade civil war, Uribe
has offered to start peace negotiations with the Marxist-inspired
Revolutionary Armed Forces of Colombia, known as the FARC. If they don't
agree to talks, the military campaign will be intensified, Uribe has
said.

Uribe will likely focus more on a negotiated end to the conflict as
opinion polls indicate Colombians put a greater emphasis on that road to
peace, said Vicente Torrijos, a political science professor at the
Rosario University in Bogota.

The U.S., Colombia's biggest trading partner, has given the South
American country $4 billion over the past six years to help combat drug
production and trafficking, which provides much of the financing for the
armed groups. Colombia is the world's biggest producer of cocaine.

About 30,000 paramilitary fighters and 7,000 guerrillas from the FARC
and the National Liberation Army have laid down their arms to take up
Uribe's offers of job training and reduced prison sentences for crimes.

``One of Uribe's biggest challenges now is making sure those fighters
get back into society, avoiding fears that common crime will rise in
cities,'' said Rafael Nieto, an independent political analyst and former
deputy justice minister.


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