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Colombia and Venezuela seek new start with Santos

BOGOTA (Reuters) - Colombia’s President Juan Manuel Santos took office on Saturday with a vow to reach out to Venezuela that drew a positive response from President Hugo Chavez despite his fury at being accused of sheltering rebels.

A supporter of Venezuelan President Hugo Chavez holds the flags of Colombia and Venezuela while taking part in a demonstration in support of peace in Colombia and the return to normal relations between the two nations in Caracas August 7, 2010. REUTERS/Carlos Garcia Rawlins

Chavez called for direct talks with his new Colombian counterpart to fix the spat, the latest in years of up-and-down relations between the ideologically-opposed governments.

The fiery Venezuelan -- who is Washington’s main foe in the region whereas Colombia is its principal ally -- broke ties with Bogota in July after outgoing President Alvaro Uribe accused him of giving hundreds of Colombian rebels safe haven.

Though the dispute raised tensions and further interrupted trade in the volatile Andean region, a military confrontation had never looked likely and markets shrugged off the dispute.

Speaking after taking the presidential sash, Santos said he aimed to end messy confrontations with Venezuela and Ecuador.

“The word war is not in my dictionary when I think about Colombia’s relations with its neighbors,” he told crowds packed into Bogota’s main Bolivar Square.

Santos, a former defense and finance minister welcomed by Wall Street, takes over the helm of a much safer Colombia after eight years of Uribe’s U.S.-backed campaign against Latin America’s oldest rebel insurgency.

Shortly after the inauguration, Chavez told a rally he too wanted a new start with Colombia. “I am prepared to turn the page completely and look to the future with hope,” he said.

“If he (Santos) can’t come in the next three or four days, I’m prepared to go to Colombia,” Chavez added.

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CHAVEZ INSULTS URIBE

Chavez said he welcomed Uribe’s departure from the presidency and blamed him entirely for the political rupture.

“Go to hell!” he bellowed.

Chavez warned, however, that if the Santos government repeated allegations Venezuela was sheltering “terrorists” on its soil, then the reconciliation effort would die.

Chavez has accused Colombia of working with the White House to undermine his socialist government. Colombia says Venezuela allows FARC rebel leaders to seek refuge across its borders.

That concrete issue looks unlikely to be resolved, with Caracas and Bogota flatly denying each other’s versions, even if the pair choose to ignore it for the sake of pragmatism.

Santos, son of an elite Bogota family, and populist Chavez have clashed repeatedly. But both men would like to see a restoration of $7 billion a year in bilateral trade.

Santos vowed a tough line with Colombian FARC rebels, though he left the door open for dialogue, and said he would maintain Uribe’s pro-business approach, which has seen foreign investment grow five-fold since 2002 as conflict waned.

The U.S. and British-trained economist has a healthy majority in the Congress. But he must tackle high unemployment and push through fiscal reforms to help Colombia regain the investment grade credit status it lost in a 1990s crisis.

Once seen as a failing state mired in drug violence, Colombia enjoyed a resurgence after Uribe took over in 2002. Oil and mining investment rose as rebels from the Revolutionary Armed Forces of Colombia, or FARC, were battered.

SANTOS’ STRONG MANDATE

While ties with Venezuela have been dire, relations with Ecuador -- which were frayed since a 2008 bombing raid on the FARC in Ecuadorean territory -- have improved.

President Rafael Correa attended the inauguration.

“We are very, very close to re-establishing that confidence with Colombia, and with the presence of President Correa, we are in the last stages of this process,” Ecuador’s Defense Minister Javier Ponce told reporters in Colombia’s capital.

Santos, whose great uncle was president seven decades ago, has a solid mandate after securing 69 percent of the votes in June’s election and a recent opinion poll showed 76 percent of Colombians view him favorably.

Uribe leaves office as the country’s most popular leader. But his second term was marred by scandals over widespread abuses by troops, illegal wiretapping of his critics and probes into legislative allies over collaboration with outlawed paramilitary gangs.

Colombia’s economy is on the mend with growth seen at more than 3.5 percent this year. But its jobless rate is among the region’s highest, its strengthening currency -- bolstered by a commodities boom -- is hurting Colombian exporters and Wall Street wants Santos to tackle a stubborn deficit.

“As I said in my election campaign, my government will be one of jobs, jobs and more jobs,” Santos said.

Additional reporting by Javier Mozzo, Luis Jaime Acosta and Nelson Bocanegra in Bogota and Andrew Cawthorne in Caracas, editing by Anthony Boadle

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