On November 19, 2012, the Revolutionary Armed Forces of Colombia (FARC), the country's largest and oldest guerrilla organization, announced a two-month unilateral ceasefire as peace talks continued in Havana, Cuba. A month earlier, the Colombian government began formal peace talks with the FARC in Oslo, Norway. (For more details, see " Peace Talks " below.) On September 18, 2012, Colombian drug kingpin Daniel Barrera (also known as "El Loco") was captured in Venezuela in a joint Colombian-Venezuelan operation assisted by the U.S. and British intelligence agencies, with support from the U.S. Drug Enforcement Administration. The Barrera arrest—hailed as the demise of the "last of the great kingpins" by President Santos—signifies intensified counternarcotics cooperation between Venezuela and Colombia. (See " Relations with Venezuela and Ecuador " below.) On September 4, 2012, President Santos and FARC leader Rodrigo Londoño Echeverri, (also known as "Timochenko") announced that official peace talks would begin in Oslo, Norway, and continue in Cuba. In late August, President Santos surprised many when he announced that the government had begun "exploratory peace talks" with the FARC. President Santos said that the Colombian military would retain its presence in every part of the country and that a smaller insurgent group was interested in joining in the negotiation process. (See " Peace Talks " below.) On July 30, 2012, the U.S. Office of National Drug Control Policy (ONDCP) announced that in its estimates Colombia's potential cocaine production capabilities had fallen below Peru's. According to the estimate, Colombia's 2011 potential cocaine production fell to 195 metric tons, 25% below the prior year estimate and 72% below the U.S. government estimate for 2001. (See " Colombia and Global Drug Trends " below.) On June 27-28, 2012, the Colombian Congress, in a special session, voted to annul judicial reform legislation just approved in the prior regular session. President Santos refused to sign the final bill, which he claimed had been altered with "surprise" amendments. The legislation, which was widely criticized, would have restricted the Supreme Court from investigating crimes committed by legislators, among other provisions. The government had originally sponsored the judicial system reform. (See " Reforms under the Santos Administration " below.) On May 15, 2012, the U.S.-Colombia Free Trade Agreement (CFTA) went into force. Implementing legislation for the bilateral trade agreement had been approved by the U.S. Congress in October and signed by President Obama on October 21, 2011 ( P.L. 112-42 ). (See " U.S.-Colombia Free Trade Agreement " below.) On April 14-15, 2012, Colombia hosted democratic leaders from 30 Latin American countries, the United States, and Canada at the sixth Summit of the Americas held in Cartagena. On April 2, 2012, the FARC released its last 10 military and police hostages, some of whom had been held in the jungle for more than a dozen years. The release of these kidnap victims, announced in February, was intended to show FARC's willingness to engage in a peace process to end the armed conflict. (See " Current Status of the FARC " below.) Colombia is a South American nation of roughly 47 million people, the third-most populous country in Latin America. It is an ethnically diverse nation—58% of the population is mestizo, 20% white, and 14% mulatto. According to the U.S. Department of State, official statistics suggest that Afro-Colombians and indigenous people are about 10% of the population, with 3% of the people self-identifying as indigenous. At the same time, some nongovernmental organizations (NGOs) and human rights groups estimate that indigenous people and Afro-Colombians may make up 25% or higher. Colombia has one of the oldest democracies in Latin America, yet it has been plagued by violence and a conflict that has lasted nearly five decades. The country's rugged terrain historically made it difficult to establish state control over large swaths of the nation's territory. High rates of poverty have also contributed to social upheaval in the country. But Colombia's economic picture has in recent years improved fairly steadily. In 2011, approximately 34% of Colombians lived in poverty, down from 50% in 2002. Colombia's economic growth rates have been strong, reaching 5.9% in 2011 and projected at 4.4% in 2012. Security improvements and a more stable economy have attracted foreign direct investment (FDI), which more than doubled in five years from roughly $6.5 billion in 2006 to more than $14 billion in 2011, largely in the oil, manufacturing, and mining sectors. Nevertheless, income inequality and land ownership concentration are still significant problems. The unemployment rate has hovered near or above 11% over the last five years, but is forecast to fall below 10% in 2012 according to some analysts. The large, unregulated informal sector accounts for 50% to 60% of Colombian workers. Drug trafficking has helped to perpetuate Colombia's conflict by providing earnings to both left- and right-wing armed groups. The two main leftist guerrilla groups are the FARC and the National Liberation Army (ELN), both of which kidnap individuals for ransom, commit serious human rights violations, and carry out terrorist activities. Most of the rightist paramilitary groups were coordinated by the United Self-Defense Forces of Colombia (AUC), which disbanded in 2006 after more than 31,000 of its members demobilized. All three groups (the FARC, ELN, and AUC) were designated Foreign Terrorist Organizations (FTOs) by the U.S. government in the late 1990s and early 2000s. Members of the AUC were accused of gross human rights abuses and collusion with the Colombian Armed Forces in their fight against the FARC and ELN. New illegally armed groups, including criminal bands some of which include re-armed paramilitaries, are now a significant challenge in Colombian cities and towns. Drug production and trafficking continue to generate many millions of dollars annually for illicit groups. As a result of the conflict and drug-related violence, Colombia has one of the largest populations of internally displaced persons in the world, with more than 3.9 million displaced since 1997. From the 19 th century through much of the 20 th century, the Liberal and Conservative parties have dominated Colombian politics. But in recent years, these parties were weakened by their perceived inability to resolve the root causes of the violence in the country. In 2002, Colombians elected an independent, Álvaro Uribe, as president, largely because of his aggressive plan to reduce violence in Colombia. Uribe served two terms. In 2010, Juan Manuel Santos was elected president from the National Unity party (described below). The major political parties represented in the bicameral Colombian Congress include the Liberal, Conservative, Alternative Democratic Pole, National Unity, Green and Radical Change parties, and several smaller political movements. The leftist Alternative Democratic Pole is the only major party in opposition to a "national unity" coalition that backs the Santos government. During his first term (2002-2006), President Uribe began to fulfill his campaign promises to address the paramilitary problem, defeat leftist guerrilla insurgents, and combat narcotics trafficking. He took a hard-line approach to negotiations with illegally armed groups, declaring that the government would only negotiate with those groups who were willing to give up terrorism and agree to a ceasefire. These included paramilitary groups with whom former President Andrés Pastrana had refused to negotiate. Negotiations with the AUC paramilitaries resulted in a July 15, 2003, agreement in which the AUC agreed to demobilize its members by the end of 2005. President Uribe endorsed a controversial Justice and Peace Law that provided a framework for those demobilizations. Uribe also built up the Colombian military and police, which stepped up their counternarcotics operations and activities against the FARC. High public approval ratings, largely due to reductions in violence as a result of his security policies, prompted Colombia to amend its constitution in 2005 to permit Uribe to run for reelection. On August 7, 2006, Álvaro Uribe was sworn in for his second term as president. Pro-Uribe parties had won a majority in both houses of congress in the elections of March 2006, giving President Uribe a strong mandate. His government improved the security situation in Colombia under a policy called "Democratic Security," demobilized the AUC, and made headway in defeating the FARC and ELN. According to U.S. State Department figures, kidnappings in Colombia declined by 83%, homicides by 40%, and terrorist attacks by 76% between 2002 through 2008. Police regained a presence in all of Colombia's municipalities, including areas from which they had been ousted by guerrilla groups. President Uribe oversaw the demobilization and disarmament of more than 31,000 AUC paramilitaries, although the demobilization process has been criticized for failing to provide adequate punishments for perpetrators and provide reparations to victims of paramilitary violence. On March 1, 2008, the Colombian military raided a FARC camp in Ecuador killing a top FARC leader and capturing his computer files. This was followed by the July 2, 2008, rescue of 15 hostages long held by the FARC, including 3 U.S. defense contractors and a former Colombian presidential candidate. Despite this progress under the Uribe government, Colombia faces serious challenges.