The most dramatic effect of Plan Colombia has been on the internal war. Although it was billed in the U.S. as counter-narcotics intervention, it is clearly seen and understood in Colombia as counterinsurgency. Although the bulk of the military hardware –mainly Blackhawk helicopters- has yet to arrive and will only be fully in place at the end of this year, Plan Colombia has already had a strong impact on each of the parties to the armed conflict, shaping the way they view each other and develop their respective strategies.

On one hand, it has rekindled hopes for a military solution within the army and conservative elements of the civilian elite. After years in which the guerrillas have held the upper hand on the battlefield, Plan Colombia has led many to believe that now, thanks to U.S. help, it would be possible to turn the table on the rebels. Pastrana thought that Plan Colombia would strengthen his hand in peace talks with the FARC, the Revolutionary Armed Forces of Colombia; in fact it has done the opposite, by reducing his room for maneuver and encouraging mistrust on the part of the insurgents. The Armed Forces have increased their already significant leverage within the government, tilting the balance of civilian-military relations further in their favor.

Plan Colombia has equally emboldened the insurgents. It has finally given some credence to their life-long claim of fighting for national liberation against Yankee imperialism. In departments like Caquetá and Guaviare, there is no doubt that increased rebel recruitment is greatly due to the discontent generated among peasants by aerial fumigation. Plan Colombia has played into the hands of the hard-liners within FARC who have argued all along that the government, far from pursuing social reforms and negotiating peace, is preparing their military defeat. In fact, there are documented reports that the FARC acquired ten thousand AK47’s via Peru’s notorious former intelligence chief, Vladimiro Montesinos; this, the group has stated, is only the beginning of its response to Plan Colombia. There is now an internal arms race, in which the guerrillas, with their ample resources and fewer troops, have a clear long-term advantage over the army, which must rely on Colombian and U.S. taxpayers to sustain current levels of military spending.

The implementation of Plan Colombia has also coincided with the fast growth of the right-wing paramilitary groups, most of which belong to the AUC, the United Self-Defense Groups of Colombia. The AUC has moved into the department of Putumayo, where most of the coca fumigation is taking place. Some observers have interpreted the AUC migration as Plan Colombia’s unofficial "first phase," designed to clear the way for the army.

Plan Colombia was focused solely on the southern part of the country, the FARC’s historic stronghold, and not in the north, where the paramilitary groups are based. Many see this as evidence that Plan Colombia is a counterinsurgency strategy disguised as counter-narcotics. Carlos Castaño, the leader of AUC, has publicly announced his support for Plan Colombia: evidently, he too sees it more as an arm against the FARC, his hated enemy, than as an effective strategy against narco-trafficking, from which he has confessed deriving 70% of his organization’s income.