BOGOTA: Popular Colombian President Alvaro Uribe is losing the momentum he would need to run for a third term in 2010, hurt by a series of pyramid investment scams that collapsed in an already slowing economy last month.

Having shrugged off a slew of human rights scandals, one linking political allies to right-wing death squads, it is his response to the scams that is threatening what was once seen as an easy re-election bid for the combative conservative.

“It’s ironic,” said political analyst Mauricio Romero at Bogota’s Javeriana University. “His prospects were never hurt by the scandals in which you really could have found fault with him, but he is paying a price now for his handling of the pyramids, which was awkward but essentially correct.”

Admired for beating back leftist rebels, Uribe appeared unstoppable in July after the army’s rescue of French-Colombian politician Ingrid Betancourt and 14 other high-profile hostages held for years by the guerrillas.

His popularity shot over 90 per cent and he refused to rule out seeking a change in law to run again. But since then news has been bad for the bespectacled cattle rancher considered Washington’s closest South American ally.

The world credit crunch hit in October, slowing investment and sapping Colombia’s economy. Then the collapse of dozens of pyramid scams wiped out the savings of thousands of working families which are a key part of Uribe’s support.

“The chances of seeing Uribe run again in 2010 are getting progressively slimmer,” said Patrick Esteruelas, analyst with New York-based political risk consultancy Eurasia Group.

Uribe first came to power in 2002 and, after a rule change, was re-elected in 2006. His allies are probing ways of changing the constitution again to allow him a third term, while he has been coyly ambiguous about what he plans to do.

In recent weeks, with anger mounting over his handling of the pyramid crisis, some key members of his Congressional coalition have abandoned the re-election effort.

“The government has evidently lost control of its multi-party governing coalition,” Esteruelas said.

A bill intended to open the way to his possible re-election was watered down in a House committee last week to allow Uribe only to run again in 2014 – after sitting out a term.

Pyramids and popularity

His staunchest backers are trying to amend the bill to call for a referendum on allowing him run in 2010.

“But as each day passes Uribe has less weight in Congress,” said Senator Juan Cristo of the opposition Liberal party.

Neighbouring leftist presidents Hugo Chavez of Venezuela and Rafael Correa of Ecuador, both of whom oppose Uribe and are highly critical of Washington, are trying to extend their periods in office as well.

Uribe’s popularity remains a strong 70 per cent. But an Invamer-Gallup poll released this week showed support for another re-election dropped to 54 per cent from 63 per cent a month earlier.He is still by far the most popular politician in Colombia.

The most likely alternatives to Uribe, Defense Minister Juan Manuel Santos and former Medellin Mayor Sergio Fajardo, have favourable ratings of only 14 per cent, the poll said.

Thousands of bilked pyramid investors have rioted across the country and some have taken to heckling Uribe during public addresses. They say they are victims not of the finance schemes but of the government, which by shutting down the investment companies, robbed them of the chance to recoup their money.

An estimated four million investors put their money into schemes that promised up to 150 per cent interest. Police are investigating links between the scams and Colombia’s multibillion-dollar cocaine trade.

Uribe already faced several other major scandals.

Scores of his allies in Congress have been charged with using paramilitary thugs to intimidate voters, army generals have been fired over civilian massacres and an ex-lawmaker has been convicted of taking a bribe to support the constitutional amendment that allowed Uribe to run for a second term in 2006.

All this mattered little to the nearly five million people who signed petitions early this year calling for a referendum to allow Uribe to seek a third term.

Now the initiative languishes in Congress, inspiring a recent newspaper cartoon picturing Uribe in a coffin labelled “re-election”. “What happened?” one character asks. “A pyramid fell on him,” says another.—Reuters