Cuba and drugs debate to spice Americas Summit
* About 30 heads of state will be at Cartagena meeting
* Obama loses luster, but remains important for region
* Latin America leaders anxious about cost of drug war
CARTAGENA, Colombia, April 12 (Reuters) - Leaders from across North and South America will mix perennial controversies over Cuba and the Falklands with new approaches to the war on drugs and trade tensions at a summit in Colombia this weekend.
The 33 nations represented at the Organization of American Sates' (OAS) sixth Summit of the Americas in the historic seaside city of Cartagena are, however, unlikely to lead to big changes on the major issues facing the hemisphere.
Although not quite the star act he was at the last OAS meeting in Trinidad and Tobago in 2009, U.S. President Barack Obama remains a focus for many Latin American leaders who hope he might pay them more heed if he wins a second term in the November election.
Many Latin American countries would like the United States to ease its tough policy of ostracizing Cuba and begin a debate on legalizing some drugs. But Obama, facing a tight re-election contest, is expected to maintain the U.S. hard line.
"Those are politically radioactive issues for Obama. There's no way he can fulfill Latin American expectations," said U.S.-based regional expert Michael Shifter.
As is often the case at Latin American summits, Cuba will be the No. 1 hot potato for participants gathering in the Caribbean port city - although the official agenda ranges from technology to poverty-reduction programs.
Cuba was kicked out of the OAS shortly after Fidel Castro's 1959 revolution, and efforts by Latin American allies to have it invited to Cartagena failed.
Ecuador's leftist President Rafael Correa is boycotting the summit over Cuba's absence. Various other leaders plan to pressure Obama over easing the five-decade U.S. trade sanctions and hostility against the communist government in Havana.
"I hope this is the last summit without Cuba," said host and Colombian President Juan Manuel Santos. He has built good relations with the leftist ALBA bloc of Latin American nations, despite being a U.S. ally and a conservative politician.
This year's 30th anniversary of the war between Britain and Argentina over the remote Falklands archipelago, known in Argentina as the Malvinas Islands, rekindled bitter memories and is sure to resonate at the meeting.
Argentine President Cristina Fernandez has wide support in Latin America for her demand that Britain abandon its "colonial" occupation and negotiate sovereignty of the islands.
But London, which won the 1982 conflict that killed 650 Argentine and 255 British military personnel, refuses to consider that and has further irked Buenos Aires by exploring for oil there.
Though heads of state meet on Saturday and Sunday, two parallel events begin earlier: a social forum for non-government groups and a "CEO summit" for businessmen who will have a parade of high-profile visitors from Obama to Colombian singer Shakira.
Over the last decade, Venezuela's President Hugo Chavez has replaced Fidel Castro as the headline-grabber at regional conferences. Few have forgotten his 2006 speech to the United Nations calling then president George W. Bush a "devil" and saying he could still smell sulfur at the podium.
Yet with Chavez undergoing radiation therapy after cancer surgery, it is unlikely he will be able to manage more than a quick, one-day visit to Cartagena at the most.
The most interesting discussions in Cartagena could be over drugs.
There are growing calls from around the world for a fresh look at how to combat an illegal trade which decades of hardline policies against producers and consumers have failed to curb abuse, violence or criminals' multi-billion dollar profits.
In South America, some believe decriminalizing the growing of coca - the raw ingredient for cocaine - would slash revenue for traffickers and encourage farmers to plant different crops.
In the West, there is growing support for the legal regulation of drugs, especially cannabis. Portugal, Switzerland and the Netherlands all reduced drug consumption by experimenting with new policies.
Latin American leaders are increasingly open to debate on the subject, with a few openly supporting it. But there is unlikely to be any consensus for major change, especially with strong U.S. opposition, analysts and diplomats believe.
"The vast majority of countries want it discussed. What might come out is the start of a necessary debate," Santos said on Wednesday after arriving in Cartagena to check preparations.
"Colombia has suffered for years from this scourge. Organized crime has an ever greater hold on Central America. So we need to take the bull by the horns and start a debate, just to see if there's a better alternative to attack it."
Another simmering issue for the leaders this weekend will be how to deal with a glut of cash from rich nations that is flooding their increasingly strong economies.
Regional powerhouse Brazil has spoken of a "monetary tsunami," and President Dilma Rousseff raised concerns about this with Obama in Washington this week.
While the money flows show Latin America's new robustness during a time of global economic turbulence, they are also driving up currencies, hurting competitiveness and tempting some countries to take protectionist measures to slow imports.
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