WASHINGTON (CNN) --Anti-government guerrillas' growing reliance on drug
profits points to the need for an "enhanced counter-terrorism program" for Colombia,
the State Department said Friday in its annual report on global drug strategy.

The International Narcotics Control Strategy Report also noted an alarming increase
in the cultivation of opium poppies -- the raw material for heroin -- in Mexico, and
the cited the need to combat drug-related money laundering worldwide.

But anti-narcotics' operatives "greatest challenge" was in Colombia, the world's
leading producer and distributor of cocaine and a leading supplier of heroin to the
United States, the report said.

The Revolutionary Armed Forces of Colombia, National Liberation Army and
paramilitary United Self-Defense Forces of Colombia -- known respectively as
FARC, ELN and AUC and all designated as terrorist groups by the State Department
-- "control much of Colombia's narcotics production and distribution, reaping
enormous profits," according to the report.

"As the drug profits of the terrorist groups increasingly come under threat ... they
can be expected to fight back violently," the report said. "This will call for a broader,
intensified counter-narcotics effort."

Until now, U.S. aid to Colombian President Andres Pastrana's anti-drug program --
dubbed "Plan Colombia" -- has been limited to counter-narcotics activities. But in
recent months, the Bush administration has been considering a Colombian request to
redirect some of its assistance to combat insurgency movements.

Rebel groups have gone beyond the traditional "taxing" of drugs and now control
markets, according to the report. Colombia's largest insurgent group, the FARC,
receives about $300 million annually from drug sales, and the AUC gets 40 to 70
percent of its income from the drug trade.

The State Department said joint operations have put a dent in the drug trade,
estimating that 85,000 hectares (207,000 acres) of coca were sprayed in 2001 --
nearly twice as much as the year before. Extraditions of drug criminals to the United
States, meanwhile, have soared by almost 700 percent since Pastrana took office
three years ago, the report said.

Central Asia, Africa cited as main transit points

Opium production tripled last year in Mexico, which was also cited as a "major
supplier" of marijuana and methamphetamine, the report said. Despite Mexican
President Vicente Fox's increased anti-drug efforts and cooperation with
Washington, "institutional weaknesses" and corruption posed major challenges to the
fight against drug trafficking and organized crime.

But Mexico was not the only U.S. ally singled out by the State Department. Canada,
Israel, the United Kingdom -- even the United States -- have problems with money
laundering, said the report.

The report also said that Europe continued to be a major drug transit route, and that
many EU countries -- including Spain and France -- were large consumers of heroin
and other synthetic drugs. Several countries in central Asia and the Balkans were
cited as primary transit points.

The African countries of Nigeria, Ghana, Ethiopia and Kenya were also labeled major
transit points of illegal drugs from Southeast Asia and South America.

The report also recognized that the international community has made significant
efforts to resolve drug trafficking problems since September 11.

In recent years, Afghanistan was the main source of illicit opium globally, with 70
percent of total production in 2000. As much as 90 percent of heroin in European
drug markets is believed to have originated in Afghanistan.

Despite a significant decline in drug use in the United States, Bob Brown, of the
Office of National Drug Control Policy, estimates that 14 million Americans still take
drugs, spending about $64 million annually. He said the United States was expanding
its efforts in drug treatment and prevention, as well as trying to curb supply.