* Military instability hinders long overdue security reform
* Drug-trafficking accusations tarnish armed forces' image
* Coups, barrack revolts followed heroic liberation victory
By Richard Valdmanis
BISSAU, April 5 (Reuters) - Wounded fighting Portugal for his country's independence, Flif Ntchuque lived his younger years in uniform as a hero. Forty years on, he and the rest of the army of Guinea-Bissau are viewed as villains.
Successive coups, assassinations and accusations of involvement in drugs smuggling have made the military look more like a threat to democracy in the West African nation than the guarantor Ntchuque and his fellow fighters thought it would be.
"We liberated Guinea-Bissau from the Portuguese, we fought for years in the bush," said the greying, 66-year-old serving lieutenant colonel, standing on the dusty curb outside his house in the capital Bissau.
"But there have been many problems since, and our legacy is suffering."
The army looms over Guinea-Bissau's presidential election, set to go to a run-off on April 22 with front runner Carlos Gomes Junior the only candidate after second-placed Kumba Yala declared a boycott, alleging first-round fraud.
Most of the military shares its Balanta ethnicity with Yala, raising fears it will intervene again if Gomes Junior takes office. Armed Forces Chief of Staff Antonio Indjai has not made his views clear, but is under international pressure to accept whichever candidate wins.
The risk of coups is ever present in Bissau, because the military - bloated, aged and unruly, but still its most important institution - has never undergone the reform needed to place it firmly under civilian rule.
Ntchuque is among hundreds of former liberation fighters still serving in a force seen as a receptacle for patronage and corruption. It gobbles up nearly $10 million per year, over 10 percent of GDP in a country where cashews are the main export and the average person lives on less than $2 a day.
"It is still the army that has the real power, the people with the guns ... We are hopeful that will change, that things will be different for us," said Mamadou Soumane, a 22-year-old market trader. Like many in the younger generation, he said he was tired of the misbehaving military.
West Africa is prone to coups and a military takeover in Mali last month was the latest reminder of the dangers posed to regional leaders who neglect their armies.
But in Guinea-Bissau, the army has gained additional international notoriety through accusations by the United States and other western governments of complicity in drug-trafficking.
United Nations counter-narcotics officials say there is evidence senior officers and soldiers have helped Latin American cocaine cartels ferry tons (tonnes) of drugs from Colombia to Europe, using Guinea-Bissau's maze of mangrove-lined coastal creeks and offshore islands to store and transfer them.
In 2009, an official from West Africa's regional bloc ECOWAS, which is observing current elections in Guinea-Bissau, said its military was "thoroughly rotten and needs to be torn out root and branch", according to a leaked U.S. diplomatic cable.
Reforming Guinea-Bissau's security forces - shrinking them to a manageable size and training what remains to respect civilian rule - will carry a $200 million price tag, said Antero Lopes, head of the security sector reform programme at the United Nations mission in Guinea-Bissau.
But he said the money has been hard to come by.
"What is at stake here is the overall development of the whole country," Lopes said. "Because of this history of convulsion, turmoil, there is the idea that the country is a hostage to the military forces. That has de-motivated donors," he added.
Guinea-Bissau's military is estimated to number between 5,500 and 8,000 and the aim is to cut that to around 4,000 through retirement and retraining to help younger soldiers into civilian jobs.
But foreign-funded security reform programmes following a 1998-9 civil war fell flat due to military unrest, and a coup within the military in 2010 which saw Indjai replace Jose Zamora Induta as the army chief led the European Union to suspend its security reform aid.
The EU has refused to work with Indjai, and Induta, after spending time in jail, has sought refuge at the EU compound, saying he fears he may be on an assassination list.
Backing for security reform could still come from regional West African bloc ECOWAS, and Portuguese-speaking ally Angola, which has investment interests in Guinea-Bissau, has stepped in with some money and military trainers.
But fighting between military factions in the capital in December and the killing of the former military spy chief during last month's election first round could hold it back, Lopes said.
The likely next president, Gomes Junior, sees overhaul of the army as critical for combating drug-trafficking, which experts say came close to turning Guinea-Bissau into a "narco-state" in the mid and late 2000s, before donors moved to help the government counter it.
"We need to organise a Republican Army that respects civilian rule, but we also want to have a security force that is modern, and well-equipped to help us combat narco-trafficking," Gomes Junior said in an interview at his home.
Despite the counter-narcotics assistance from western governments and law enforcement agencies for Guinea-Bissau's judicial police, there are fears military involvement in the drugs trade is continuing.
In 2010, the United States accused two senior military men from Guinea-Bissau of being drugs kingpins - air force head Ibraima Papa Camara and former navy chief Bubo Na Tchuto - and others are also suspected. All protest their innocence.
Reforms have some chance, partly because the concern expressed by Ntchuque over the army's legacy may be shared by its head.
Guinea-Bissau's steamy coastal capital and its crumbling colonial architecture are filled with reminders of the military's heroic origins as a liberation movement led by independence icon Amilcar Cabral.
Cabral, who was assassinated in 1973, formed a jungle guerrilla force in 1963 which, after 11 years of gruelling war and support from Russia, China and Cuba, led to Portugal quitting the West African territory in 1974.
Along the main boulevard leading to town there is an Amilcar Cabral Pharmacy and market stalls sell Cabral T-shirts manufactured in China. In almost every government office, a portrait of Cabral wearing his trademark wool cap with a pom-pom, hangs above functionaries at their desks.
It was Cabral's fighters, Ntchuque included, who made up the backbone of Guinea Bissau's armed forces, which since independence have been the main arbiter in political life.
The first post-independence president, Amilcar Cabral's brother Luis Cabral, was ousted in a 1980 military coup led by Joao Bernardo Vieira. Vieira ushered in multi-party politics and won free elections but was himself toppled by a 1999 military coup following a brief civil war sparked by an earlier coup bid.
Returning through an election in 2005, Vieira was killed in 2009, hours after the army chief died in a bomb attack.
During the civil war, the military recruited thousands of young fighters, most from the agrarian Balanta, Bissau's largest ethnic group but one which has rarely enjoyed political power.
Many Guinea-Bissau citizens from other ethnicities fear the Balanta, who have the reputation of being the nation's fiercest warriors, have used the army as an alternative source of power.
"They were drafted in this war, which reshaped the country negatively. These are youngsters who were promised to serve two years, but they are still there," the U.N.'s Lopes said.
"They have no prospects of finding a job and they believe that the uniform helps their sustainability and that of their families."
Lopes said he believed the new armed forces chief Indjai, though shunned by the EU, appeared ready to cooperate with the security reform effort. He added Indjai had and had trained his soldiers about the benefits of reform and provided lists of older soldiers who could be retired.
"He has facilitated the sensitisation of the armed forces, he opened the barracks, he encouraged people to enroll on the lists. What can we say?" he said. "Whether this is an effort simply to recover the army's image, or it is a reality that reform may happen, we don't know."