Colombia's Narco-Terrorist Left

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

This edition looks at three very different pressure points in the region, but they all point toward the same underlying story: the return of hard constraints in Latin America. In Colombia, newly revealed recordings have reopened the debate over the Petro administration’s security strategy and the explosive growth of the Clan del Golfo. The case raises uncomfortable questions not only about Iván Velásquez’s tenure at the Ministry of Defense, but also about Washington’s oversight of its own counternarcotics architecture in the country.

In Argentina, Javier Milei’s fiscal adjustment faces its most demanding test in the sovereign debt matrix. The administration has achieved meaningful stabilization gains, but the sheer weight of short-term maturities and dollar-denominated liabilities continues to limit its room for maneuver. The newly authorized multilateral-backed borrowing buys time, but does not eliminate the central challenge: turning fiscal discipline into durable reserve accumulation. In Honduras, the restructuring of ENEE reveals how energy reform has become inseparable from geopolitics. The unbundling of the state utility may stabilize parts of the grid and attract private investment, but it also shifts the country deeper into Washington’s regional energy architecture. Across all three cases, the pattern is clear. States that cannot control territory, finance debt, or keep the lights on will find their political narratives increasingly irrelevant.

In this issue, you will find:

• Iván Velásquez and Todd Robinson: Architects of the Rise of Narco-Terrorism in Colombia

• Argentina's Outstanding Debt Distribution

• The Structural Overhaul of Honduras’ Energy Matrix

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Caracol Noticias revealed devastating audio recordings this week: the government of Gustavo Petro, together with the direct management of Iván Velásquez as Minister of Defense, enabled the exponential growth of the Clan del Golfo—designated a terrorist organization by the Trump administration—expanding its criminal capabilities and territorial control. This occurred with the connivance of Todd Robinson, who, from Washington, was responsible for overseeing and supporting the fight against narcotics trafficking in Colombia.

The relationship between Robinson and Velásquez was forged in Guatemala, where they crossed paths and abused their respective positions to illegally pressure Guatemalan officials, judges, and prosecutors. That complicity, far from dissolving, carried over into Colombia. The most serious aspect of their overlap between 2022 and 2025 is that Todd Robinson—precisely the senior US official responsible for combating narco-terrorism in his capacity as Assistant Secretary of State for International Narcotics and Law Enforcement Affairs (INL)—allowed, or at least tolerated, his parcero Iván Velásquez to systematically dismantle Colombia’s security and intelligence capabilities from within. What Velásquez did, Robinson knew about and allowed. Just yesterday, in light of the gravity of what was heard in the recordings, Colombia’s Office of the Inspector General opened investigations into former Minister Velásquez and Danilo Rueda. The same should now be expected from US authorities with regard to Robinson.

It was precisely during those years, between 2022 and 2025, that Colombia experienced a dramatic setback in its fight against drug trafficking and organized crime. While the government promoted its so-called Total Peace policy, the Clan del Golfo—also known as the Gaitanist Self-Defense Forces of Colombia (AGC)—underwent unprecedented growth. According to a report by the Ideas for Peace Foundation, the organization expanded from approximately 4,000 members in 2022 to nearly 10,000 in 2025, an increase of 140%. Its territorial influence doubled, growing from 145 municipalities across 13 departments to 296 municipalities in 17 departments.

This strengthening coincided with a significant increase in cocaine production. According to data from UNODC and Colombia’s Integrated Illicit Crop Monitoring System (SIMCI), coca cultivation in Colombia increased by 10%, while the country’s potential pure cocaine production jumped from 1,738 to 2,664 metric tons during the same period—an increase of 53%. Colombia consolidated its position as the source of more than 67% of the world’s coca leaf. This growth was deliberate and took place while the country’s security forces were being systematically weakened from within, as Todd Robinson looked the other way.

The principal architect of this structural weakening was Iván Velásquez. Rather than strengthening the State’s operational capacity against narco-terrorism, he carried out a massive purge of senior military, police, and intelligence officials that, in practice, neutralized the offensive against the AGC. All of this occurred while Robinson, as head of INL, continued channeling resources and technical assistance to security forces that his ally was dismantling from the inside.

The audio recordings are unequivocal. Then High Commissioner for Peace Danilo Rueda held direct meetings with leaders of the Clan del Golfo, including the figure known as “Jerónimo.” During those conversations, Rueda explicitly promised the suspension of aerial bombardments and special operations, as well as a purge of the military, police, and intelligence services. “We are entering a phase… of police and military purging, but also of the intelligence agencies,” Rueda is heard saying in the recordings. In exchange, the criminal organization offered to “freeze” its activities. That never happened.

What Rueda promised during those meetings was implemented under Velásquez’s tenure. As Minister of Defense, he ordered and executed the mass retirement of generals, colonels, and intelligence officers. Dozens of commanders with extensive experience in operations against narco-terrorist organizations were removed from service. The consequences were immediate: the Clan del Golfo expanded without sustained pressure from the State’s security forces. In Urabá—the organization’s historic stronghold—its territorial control solidified, while associated criminal activities such as extortion, illegal mining, and cocaine trafficking surged.

This deliberate weakening of the State’s capabilities cannot be explained simply as a “miscalculation” within the Total Peace strategy. From his office, Velásquez exercised direct authority over military operations and intelligence policy. The purge that Rueda promised criminal organizations in September 2022 became official State policy under Velásquez’s leadership. While the AGC grew by 140% and potential cocaine production increased by more than 50%, Colombia’s armed forces lost operational effectiveness through the removal of key officers—once again, all under the supervision of Todd Robinson, the man in Washington whose mission was to combat precisely that narco-terrorism.

The irony becomes even greater when examining the former minister’s past. Today Colombia’s ambassador to the Holy See, Velásquez previously served as commissioner of CICIG, where he was celebrated by broad sectors of the political left as an incorruptible champion against impunity and organized crime. Yet his record in Colombia reproduces the same pattern he had already rehearsed in Guatemala alongside Robinson: the effective protection—through action or omission—of narcotics trafficking and terrorist structures.

Under the banner of an alleged anti-corruption purge within the armed forces, Velásquez helped dismantle the State’s ability to confront Colombia’s principal narco-terrorist organization. The Clan del Golfo did not simply grow in manpower and territory; it consolidated cocaine trafficking routes, expanded its criminal “franchise” model, and increased its capacity for intimidation in regions such as Urabá.

Today, with Rueda’s recordings in the public domain and the figures from UNODC and the Ideas for Peace Foundation on the table, it is impossible to maintain that the rise of the AGC was unrelated to Velásquez’s management and Todd Robinson’s passivity. The role of both men was decisive. Without the purge of senior officers ordered by the Ministry of Defense, and without the inaction of the official responsible for confronting narco-terrorism from Washington, the exponential growth of the Clan del Golfo would not have been possible.

Iván Velásquez entered office wrapped in the aura of an anti-corruption crusader. His tenure at the Ministry of Defense, tolerated by Todd Robinson, produced the opposite result: a State weakened in the face of drug trafficking and a Clan del Golfo stronger and more expansive than before. That contradiction is not a matter of perception. It is a fact that demands a serious investigation by Colombian authorities and, especially, by US authorities. The real corruption that must be judged is not the one Velásquez claimed to fight, but the one his ministry allowed to flourish by undermining the State’s ability to confront it.

Argentina’s macroeconomic reengineering under President Javier Milei faces its most critical testing ground within the sovereign debt matrix. The administration’s aggressive fiscal adjustment has yielded significant structural improvements, yet a dense wall of short-term liabilities continues to threaten external stability.

• This fragile equilibrium is underscored by the recent authorization of up to USD 5B in new multilateral-backed borrowing under foreign jurisdiction to manage upcoming payments.

The structural backdrop. The composition of Argentina’s outstanding obligations reflects a deep-seated vulnerability inherited from decades of imprudent borrowing and structural deficits. According to the Ministry of Economy’s data, the nation’s total regular-payment debt reached a staggering USD 452.6B as of late 2025. Market-traded bonds constitute the overwhelming majority of this burden, representing 63.5% of the total and exposing the sovereign to severe shifts in international market sentiment. The structural rigidity is further compounded by a significant reliance on multilateral organizations, which hold 21.2% of the debt stock, including the massive legacy IMF program.

• Holding 21.2% of the debt stock cements multilateral organizations as structural co-authors of Argentina’s macroeconomic architecture, severely limiting the administration’s room for heterodox policy maneuvers.

• A USD 452.6B debt overhang acts as a structural anchor, distorting domestic capital allocation by forcing the financial system to prioritize state liquidity needs over private-sector credit and investment.

The immediate hurdle. The operational challenge for the Milei administration lies in a heavily front-loaded repayment schedule colliding with structurally weak reserve coverage. Maturities in 2026 require an astronomical USD 150.4B in principal and interest payments this year alone, accounting for 31% of the total debt maturity schedule. While the administration has made historic progress in achieving a fiscal surplus and curbing chronic inflation, the Central Bank’s net foreign currency reserves remain thin and highly vulnerable, particularly given that USD-denominated debt accounts for 43.7% of the total stock. In response, the cabinet’s June 2026 decree authorizing up to USD 5B in multilateral-backed loans serves as an essential liquidity bridge designed to avoid high-yield international markets and reduce financing costs.

• Concentrating 31% of total debt liabilities within a single calendar year creates a severe operational bottleneck that leaves the administration with virtually no margin for policy execution errors.

• With USD-denominated debt accounting for 43.7% of the total stock, any path toward long-term solvency remains structurally dependent on sustained, export-driven hard currency accumulation.

• The USD 5B decree functions as an immediate tactical shield, leveraging multilateral backing to substitute volatile market exposure with lower-cost institutional credit.

Between the lines. Beneath the headline figures lies a complex web of legal signaling, domestic currency indexation, and geopolitical leverage that defines Argentina’s true room for maneuver. The currency composition reveals that local-currency instruments are heavily indexed, with inflation-linked peso securities accounting for 21% of the debt stock and standard peso instruments another 18.9%. This structure reinforces the need for strict fiscal discipline. At the same time, the IMF has publicly maintained its confidence in Milei’s stabilization program despite looming repayment risks, while the decision to issue new debt under New York jurisdiction signals a profound shift in Argentina’s legal framework.

• Because 21% of the debt stock is tied to inflation-linked instruments, any attempt to relax fiscal discipline through monetary expansion would immediately increase the government’s domestic liabilities, effectively insulating the state from its historic inflationary incentives.

• By explicitly choosing New York jurisdiction and waiving sovereign immunity, Milei’s administration signals a decisive break from previous populist governments, deliberately trading abstract judicial sovereignty for cheaper access to international capital.

• The strategic shift toward World Bank- and IDB-backed loans exposes a deeper institutional reality: Milei is effectively using multilateral organizations as financial intermediaries to bypass hostile private credit markets while country risk gradually adjusts.

In conclusion. Argentina’s fiscal stabilization under Javier Milei represents a remarkable conceptual shift, yet the structural debt overhang remains a profound existential challenge. The strategic use of multilateral guarantees for the newly authorized borrowing effectively buys the administration time while country risk continues to decline.

• However, the sheer volume of 2026 maturities ensures that any lapse in fiscal discipline or severe commodity price shock could trigger renewed repayment pressures.

• Ultimately, the transition from fragile liquidity management to durable solvency will depend entirely on converting short-term fiscal surpluses into deep, structurally sound international reserve coverage.

The institutional overhaul of Honduras’ state-owned electrical utility, ENEE, marks a critical turning point that extends far beyond domestic grid stabilization. Trapped under a crushing structural deficit and mounting debt, the Honduran energy sector is transitioning from a rigid state monopsony toward an unbundled, market-driven architecture. This structural shift is deeply intertwined with multilateral mandates and a sweeping geopolitical realignment across Central America.

• Ultimately, the reform serves as a localized micro-node within Washington’s broader energy-dominance strategy for regional infrastructure control.

In perspective. ENEE’s chronic insolvency stems from an institutional architecture that stifled price discovery and turned the grid into a massive fiscal drain. This structural crisis was severely intensified by President Xiomara Castro’s 2022 Free Energy Decree, which granted a blanket 100% subsidy to households consuming 150 kWh per month or less without traditional means testing. To fund this political transfer to the ruling party’s base, the administration shifted 40% of the program’s cost onto commercial and industrial clients through artificially inflated tariffs. This cross-subsidization penalized captive business consumers while masking deep technical inefficiencies and a baseline peak deficit exceeding 600 MW.

• The single-buyer framework has trapped ENEE in an expensive spot market, where emergency energy purchases routinely exceed USD 135/MWh.

• This volume-based subsidy suffers from severe structural leakage, inadvertently extending free electricity to luxury vacation homes and vacant affluent apartments.

• Artificially inflated industrial tariffs have undermined local manufacturing competitiveness and contributed to upward inflationary pressure on consumer goods.

How it works. The 2026 reform framework legally fractures the state monopsony by functionally unbundling ENEE into separate corporate subsidiaries for generation, transmission, and distribution. Grid management is being transferred to a newly created Independent System and Market Operator (OSM), which will clear transactions algorithmically and minimize private counterparty risk. Crucially, the reform allows mid-sized commercial consumers to bypass ENEE and contract directly with private power developers. However, this disintermediation threatens ENEE with a dangerous utility death spiral, as its most profitable corporate clients can now legally exit the public network.

• In response to this fiscal strain, the state has launched aggressive audits to remove the subsidy from non-vulnerable users and reduce the program to 900,000 verified households.

• Distribution losses remain stubbornly above 36%, aggravated by administrative gridlock and recent labor strikes involving field technicians.

• Private developers are increasingly bypassing ENEE’s fragile balance sheet by tying new infrastructure investments directly to creditworthy corporate clients.

Between the lines. On a geopolitical level, the unbundling of ENEE serves as a specialized node within Washington’s broader regional energy strategy. By encouraging the dismantling of centralized state monopolies, US economic statecraft reduces the space for opaque state-to-state infrastructure arrangements often associated with rival powers such as China. Furthermore, lowering the qualified consumer threshold to 400 kW creates parallel energy enclaves within Central America. This structural insulation allows strategic Western nearshoring capital to connect to a secure, privately supplied energy matrix backed by independent power producers, largely insulated from the host state’s fiscal deterioration.

• Multilateral financing acts as the principal de-risking mechanism, illustrated by the IDB’s USD 155 million Sula Valley project, which is expected to boost cross-border grid transactions by 225%.

• Regional droughts have exposed significant hydroelectric vulnerabilities, allowing Washington to mobilize DFC and EXIM Bank financing in support of US private investment.

• The realignment effectively secures long-term export markets for American liquefied natural gas and battery storage technologies while limiting the influence of competing state-backed energy diplomacy.

In conclusion. The structural transformation of Honduras’ electricity sector represents a high-stakes race between market liberalization and fiscal sustainability. While the 400 kW threshold creates an insulated corridor for international nearshoring capital, it simultaneously deprives the public grid of the corporate revenue needed to sustain its social safety net.

• ENEE’s future now hinges on its ability to successfully implement means-tested subsidy reforms before its remaining industrial customer base exits the system altogether.

• Ultimately, this overhaul will either anchor Honduras more firmly within the US regional energy architecture or leave it managing an illiquid, heavily indebted public utility.