Colombian rebels call truce as peace talks start

HAVANA/BOGOTA (Reuters) – Colombia’s Marxist rebels called a two-month unilateral ceasefire yesterday, the first truce in more than a decade, as delicate peace talks began in Cuba to try to end a half century of war.

Colombian President Juan Manuel Santos’ government reiterated, however, that there would be no halt to military operations until a final peace deal is signed with the Revolutionary Armed Forces of Colombia, known as FARC.

The rebel group said it would halt all offensive military operations and acts of sabotage against infrastructure beginning at midnight yesterday and running through Jan 20.

“This decision by the FARC is a decisive contribution to strengthen the climate of understanding needed so the parties … can achieve the purpose desired by all Colombians,” lead rebel negotiator Ivan Marquez said, standing outside a convention centre for the start of talks in Havana.

The gesture is a sign that the rebels may be keen to push talks to a successful end – something that was thrown into doubt by long, drawn-out speeches by its leadership calling for major changes to Colombia’s political system.

The warring sides arrived at the talks in black luxury cars and will meet almost daily until negotiations end.

A crush of journalists surrounded the bearded, bespectacled Marquez who stood with other FARC delegates, including Dutch national Tanja Nijmeijer in Havana’s plushest neighborhood.

Some FARC members wore caps and T-shirts of Simon Trinidad, an official guerrilla negotiator who is in prison in the United States. Others shouted “Long Live the Army of the People.”

The head of the Colombian government delegation, Humberto de la Calle, smiled and waved as he entered but made no comment.

Speaking from Bogota, Colombian Defence Minister Juan Carlos Pinzon doubted the sincerity of the FARC’s ceasefire pledge.

“Security forces have the constitutional duty to pursue all criminals that have violated the constitution,” he said. “Hopefully they keep their promise, but history shows that this terrorist group never complies with anything.” Colombia’s war has dragged on for 50 years, taking thousands of lives, displacing millions more and causing damage to infrastructure in Latin America’s longest running insurgency.

A failure of the latest peace process would mean years of more fighting and further blight on the reputation of a country eager for foreign investment and regional clout, yet which has been unable to resolve its most serious domestic problem.

Residents in western Cauca province, one of Colombia’s most war-ravaged areas, celebrated the FARC ceasefire.

“We hope it’s not just two months, we hope that it’s definitive,” Orlando Ramos, a resident in Miranda, Cauca, said on local television.
The announcement by the FARC could be a breather for oil and mining companies, the target of many FARC attacks in recent months as the group sought to hobble Santos’ main source of international revenue.

The war costs Latin America’s fourth-largest economy 1 to 2 percentage points of gross domestic product every year, according to the government, and makes large tracts of arable land unsafe due to combat or landmines.

“A peace agreement with the FARC could entice more sectors and investors into Colombia,” said Eurasia Group’s Latin America analyst Heather Berkman.
“The opportunities for agriculture production in particular could reshape the country’s export sector, particularly as both small-scale and larger farmers could produce on land long off-limits due to security troubles.”

Santos wants an agreement within nine months, while the rebels say the process will likely take longer. The two sides face plenty of thorny issues in their five-point agenda, which will begin with rural development.

Previous peace attempts have failed, but both the government and the FARC have expressed optimism that this time might be different.
Not everyone is so upbeat though.

“You have to take this announcement with a grain of salt,” Felix Lafaurie, head of Colombia’s National Federation of Cattle Ranchers, said on Colombian radio.

“I hope this is going to be a sign of the FARC’s good will and not that they’ll then take swipes on substantive issues.”
The vast majority of Colombians support the peace process, although they think it will ultimately fail. Even so, the talks are the biggest gamble in Santos’ political career and their success or failure may decide the outcome of the next election in 2014.

The conflict dates back to 1964 when the FARC emerged as a communist agrarian movement intent on overturning Colombia’s long history of social inequality. During the 1990s, the FARC controlled large parts of the country.

In the early 2000s, billions of dollars in US aid, improved intelligence and increased mobility began to turn the tide of the war in favour of the government.

The FARC has lost at least half a dozen top commanders and been pushed back into remote jungle hideouts in recent years, though the rebels are far from a spent force and still wage attacks on security forces and economic infrastructure.

Violence was among the reasons previous peace talks failed. In the last attempt from 1999 to 2002, the government broke off negotiations after the FARC hijacked an airplane.

“The FARC have heard the voice of many Colombians, that rightly have been skeptical about its willingness to reach an end to the war, given the past,” said Juan Fernando Cristo, a senator for the Liberal Party.

“The decision for a unilateral truce should fill us with optimism about what’s coming at the negotiating table.”

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Delcidio do Amaral

Brazil corruption probe widens; Senate leader, BTG Pactual CEO arrested SAO PAULO/BRASILIA, (Reuters) – The chief executive of Brazil’s biggest independent investment bank and the leading senator in the governing coalition were arrested yesterday on suspicion of obstructing the country’s most sweeping corruption investigation ever. The detention of such prominent power brokers on orders from the Supreme Court raised the stakes dramatically in a bribery scandal that started with state-run oil company Petrobras and now threatens the heights of Brazilian banking and politics. The arrest of Andre Esteves, the billionaire CEO and controlling shareholder of BTG Pactual SA and Brazil’s most influential dealmaker, sent the bank’s listed shares into a dive that wiped out a fifth of its market value and raised red flags at the central bank. Brazil’s Congress also ground to a halt with the arrest of ruling Workers’ Party Senator Delcidio do Amaral, a veteran lawmaker who has run the economic affairs committee and who has been key to President Dilma Rousseff’s unpopular austerity program. Brazil’s currency fell as much as 2 percent as the scandal threatened both the country’s sixth-largest bank and the president’s sputtering efforts to pass a new budget and avoid another credit ratings downgrade to junk. Brazil’s central bank said it was monitoring the arrest of Esteves to see whether it would impact operations at BTG Pactual and trigger regulatory action. Banking analysts warned that BTG Pactual, the largest independent investment bank in Latin America, could struggle to navigate Brazil’s worst recession in a quarter century without its wunderkind founder at the helm. Clients withdrew funds equivalent to less than 1 percent of assets under management at BTG Pactual, which was less than had initially been expected by some, said a source with knowledge of the bank’s strategy. The six-year-old BTG Pactual, which manages about 230 billion reais ($61 billion), tapped less than 5 percent of its about 40 billion reais in cash reserves to cover those redemptions, said the source, who requested anonymity because of the sensitivity of the issue. SHOCKWAVES IN CONGRESS The political gridlock that has obstructed economic policy this year is likely to worsen with the jailing of Amaral, one of about 50 Brazilian politicians under investigation for their alleged roles in a vast kickback scandal at the oil giant known as Petroleo Brasileiro SA. Amaral’s arrest was the first ever for a sitting senator in Brazil and it sent shockwaves through the capital. Congress suspended its sessions as senators met to discuss how to handle the arrest. After a heated debate in which some government supporters defended Amaral, the Senate voted 59-13 to uphold the top court’s decision to order his arrest. Supreme Court Justice Teori Zavascki said he authorized the arrest after prosecutors presented a taped conversation in which Amaral tried to bribe Petrobras’ former international director, Nestor Cervero, out of taking a plea bargain that could implicate the senator and other politicians. Prosecutors alleged that Amaral conspired to help Cervero flee authorities. They also said the senator offered a monthly stipend to the former executive’s family, financed by Esteves, who had obtained a copy of a plea bargain based on Cervero’s testimony. Cervero was received a 12-year sentence in August for corruption and money laundering in connection to bribes paid on two drillship contracts. Another defendant in the case testified that Cervero had passed bribe money to Amaral skimmed from Petrobras’ controversial 2006 purchase of a refinery in Pasadena, Texas. Amaral’s lawyer, Mauricio Silva Leite, dismissed the accusation that his client obstructed the Petrobras investigation, saying it was based on the word of a convict. He also criticized the Supreme Court for ignoring the senator’s immunity as an elected official. SHARES DIVE BTG Pactual confirmed the arrest of its chief executive and said the bank was available to cooperate with the investigation. Esteves’ lawyer, Antonio Carlos de Almeida Castro, told reporters that the banker “certainly” had not acted to obstruct the investigation. The bank’s listed units, a blend of shares in its investment banking and private equity divisions, tumbled as much as 39 percent to an all-time low on the Sao Paulo stock exchange before paring losses to 21 percent. Court representatives said Esteves had been arrested temporarily for five days, with a potential extension of five days. Amaral was arrested for an indefinite period. Esteves, 47, has drawn on powerful connections in politics and global finance to steer BTG Pactual through turbulent times as Brazil’s economy plunged into a sharp recession. BTG Pactual’s major deals with Petrobras have drawn the attention of investigators, including the bank’s stake in Sete Brasil Participacoes SA, a supplier of oil-drilling platforms that has been swept up in the probe. BTG Pactual also bought half of Petrobras’ Africa unit in 2013. Last quarter, credit to oil and gas and infrastructure companies, which are the most impacted industries in the widening graft probe, accounted for about 16 percent of BTG’s loan book. That is the largest exposure among Brazil’s listed traded banks, according to Thomson Reuters data. Brazil’s central bank said in a press statement that it was monitoring the arrest of Esteves, adding that BTG Pactual has solid liquidity indicators and continues to operate normally. The net worth of Esteves was last estimated at $2.2 billion by Forbes Magazine.


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