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Cablegate: Morales to Tobias: Thanks for the Assistance

VZCZCXYZ0001
PP RUEHWEB

DE RUEHLP #0597/01 0612038
ZNY CCCCC ZZH
P 022038Z MAR 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 2707
INFO RUEHAC/AMEMBASSY ASUNCION 6602
RUEHBO/AMEMBASSY BOGOTA 3923
RUEHBR/AMEMBASSY BRASILIA 7811
RUEHBU/AMEMBASSY BUENOS AIRES 5057
RUEHCV/AMEMBASSY CARACAS 2292
RUEHPE/AMEMBASSY LIMA 2390
RUEHMD/AMEMBASSY MADRID 3355
RUEHMN/AMEMBASSY MONTEVIDEO 4458
RUEHQT/AMEMBASSY QUITO 4933
RUEHSG/AMEMBASSY SANTIAGO 9521
RUEHUB/USINT HAVANA 0191
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUMIAAA/USCINCSO MIAMI FL
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L LA PAZ 000597

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/03/2017
TAGS: ECON PGOV PREL SNAR BL
SUBJECT: MORALES TO TOBIAS: THANKS FOR THE ASSISTANCE

Classified By: DCM Kris Urs for reasons 1.4 (b) and (d).

--------
SUMMARY
--------

1. (C) As part of Director of Foreign Assistance and USAID
Administrator Randall Tobias' visit to Bolivia, President
Morales met with Tobias, WHA PDAS Charles Shapiro, and
Ambassador Goldberg early March 2. Morales thanked
Ambassador Tobias for U.S. natural disaster assistance,
saying that this year's flooding is the worst Bolivia has
seen in 60 years. On the bilateral relationship in general,
Morales said Bolivia wants an "excellent relationship" with
the United States. Ambassadors Tobias and Shapiro offered
support for Bolivia's goal of a more inclusive society, but
Tobias noted that the goal should be placed in the context of
a democracy that includes all Bolivians. Morales asked for
aid in creating jobs and improving infrastructure and said he
has "great interest" in the Millennium Challenge Account
(MCA) and in an additional ATPDEA extension. Morales
described Bolivia's many marches and blockades as largely
local problems and accused opposition party Podemos of
organizing them and plotting against his government. Morales
thanked Ambassador Tobias for USAID assistance, highlighting
alternative development and infrastructure programs in
particular. Ambassador Tobias noted both countries' interest
in close counternarcotics cooperation and acknowledged the
GOB's interdiction efforts; Morales responded by saying his
government is serious about fighting narcotics trafficking.
Morales spoke in terms of a net reduction of coca and said
his government plans to work harder in the Yungas; he also
stressed the GOB's desire for closer counternarcotics
cooperation with the United States. In an unprecedented move,
Morales joined Tobias for a joint press conference following
the meeting and publicly thanked the USG for disaster
assistance and general cooperation. In perhaps the Embassy's
most positive meeting with Morales to date, the president
repeatedly thanked Tobias (both privately and publicly) for
U.S. assistance and seemed to appreciate the finer points of
USAID operations in Bolivia. End summary.

-------------------
DISASTER ASSISTANCE
-------------------

2. (C) As part of Director of Foreign Assistance and USAID
Administrator Randall Tobias' visit to Bolivia, President
Morales (along with Amcit MFA trade advisor Tom Kruse) met
with Tobias, WHA PDAS Charles Shapiro, and Ambassador
Goldberg early March 2. Morales thanked Ambassador Tobias
for U.S. natural disaster assistance, saying that this year's
flooding is the worst Bolivia has seen in 60 years. Morales
said he is "very grateful" for the international cooperation
Bolivia has received. Ambassador Tobias conveyed the
sympathy of the American people for Bolivia's flooding
victims and informed Morales that two relief planes will
arrive March 5 to provide additional assistance. Tobias said
the USG is glad to have the opportunity to help Bolivia in
its time of need. Morales thanked Tobias for two additional
plane loads of assistance and said food rations and donations
will be needed for approximately six months in some areas,
until Bolivians can begin to recover from the disasters.

-------------------------
BILATERAL RELATIONSHIP
-------------------------

3. (C) On the bilateral relationship in general, Morales said
he wants an "excellent relationship" with the United States.
He explained that Bolivia has a culture of dialogue and that
debate is welcome. Morales said that while sometimes the
press wants to generate conflict between us, he wants the
"maximum level of cooperation with the USG." He acknowledged
that the United States is the most developed country in the
world, but noted that the United States faces environmental
challenges, implying that the United States could learn from
the Bolivians about how to live at peace with nature.
Ambassadors Tobias and Shapiro offered support for Bolivia's
goal of a more inclusive society, but Tobias noted that the
goal should be placed in the context of a democracy that
includes all Bolivians. Ambassador Tobias emphasized the
long relationship between Bolivia and the United States,
which he said the United States values and wants to continue.
Tobias told Morales that the United States and Bolivia have
many things in common, and that they should continue to work
to find common interests.

4. (C) Morales asked for aid in creating jobs and improving
infrastructure and said he has "great interest" in the
Millennium Challenge Account (MCA) (particularly for a
highway from La Paz to Pando via Beni) and in an additional
ATPDEA extension. Morales thanked Tobias for Congress'
extension of ATPDEA benefits and said Bolivia wants commerce
with the United States so it can export goods to the U.S.
market. He noted that as developed and developing countries,
the United States and Bolivia complement each other well.
Morales also acknowledged the United States' prominent role
in international institutions including the World Bank and
the IDB, and said he was grateful for that assistance.
Morales said Bolivia's macroeconomic stability has improved
overall, largely due to increased hydrocarbons revenues, but
not enough to create sufficient jobs. He also pointed out
that his government's hydrocarbons' nationalization did not
include expropriation of property or assets. Ambassador
Tobias responded by saying that the USG is working hard to
improve lives, create jobs and increase investment in
Bolivia. We recognize that a stable economy is key to those
goals, he said. Tobias also encouraged Morales to
aggressively pursue a MCC proprosal. He emphasized that his
visit should be read as a strong signal that the United
States wants to work with Bolivia toward these goals.

-------------
SOCIAL UNREST
-------------

5. (C) Morales described Bolivia's many marches and blockades
as largely local problems and accused opposition party
Podemos of organizing them and plotting against his
government. He said that in contrast to protests over the
past year, the marches he led prior to becoming president
were "apolitical"-- in support of human rights, coca, and
other causes. He said the Bolivian people received his
marches warmly by supporting the marchers and providing them
with food. Morales lamented the most violent conflict in his
administration to date-- the October 2006 conflict between
miners in Huanuni. Before the conflict, Morales said he
personally met with miners more than 15 times. He said he
told both sides that he would work to help them but that they
would have to work together. Morales regretted that they
couldn't, calling the violence the "worst moment" in his
administration.

--------------
USAID SUPPORT
--------------

6. (C) Morales thanked Ambassador Tobias for USAID
assistance, highlighting alternative development programs in
particular. He noted the current high prices for
Chapare-produced palm hearts, as well as the GOB's desire to
export more bananas. Morales said Bolivia wants to export
alternative development products, as successes in alternative
development reduce coca cultivation. He mentioned the
importance of a good infrastructure for alternative
development projects, and thanked Tobias for USAID assistance
in constructing a road in the Chapare. While stating that
the GOB "wants to maximize U.S. cooperation," Morales
suggested that USAID assistance could be more efficient. He
said that for the cost of one USAID-constructed soccer field,
the GOB could have built three. (NOTE: Morales made this
argument previously and Ambassador Goldberg responded via
letter to explain that our numbers indicated otherwise).
Morales also mentioned health and education as critical areas
for international cooperation in Bolivia.

7. (C) After expressing gratitude for USAID assistance,
Morales indicated that he would prefer that international
assistance be donated to the central government, not
Bolivia's prefects or mayors. He said he would like to
establish a type of open registry to monitor aid, not for
purposes of controlling it but for the benefit of Bolivia's
development process. He said it would be useful to know the
amount of USAID assistance in Bolivia and what the money is
spent on.

--------------------
COCA: MORE IS LESS?
--------------------

8. (C) Ambassador Tobias highlighted both countries' interest
in close counternarcotics cooperation and acknowledged the
GOB's interdiction efforts. He said that while the United
States remains concerned that any increase in coca
cultivation will go to the illegal drug trade, he looked
forward to continuing to work through those issues with the
GOB. Morales responded by saying his government is serious
about fighting narcotics trafficking. He said that although
he has been accused of being a narcotrafficker, the GOB
policy is "zero cocaine, zero drugs." He said in Bolivia,
"one can't talk about zero coca." At the same time, he said,
his government's respect for the traditional use of coca does
not imply unrestricted growth. Morales also explained that
cocaine is not part of Bolivia's indigenous culture.

9. (C) In giving Ambassador Tobias some of his personal
history, Morales said he was not born a cocalero but moved to
Chapare in 1979-80 after completing his mandatory military
service. His family, he said, focused on rice production but
also grew a few catos of coca on the side. Because of
globalization and increased international trade in the
1980's, Brazilian rice became cheaper than Bolivian rice,
thus damaging his family's business. He recounted that in
those years of hyperinflation, people had to sell large
bundles of bananas to buy a coke or a beer. Morales said
eradication with government compensation failed because
people became accustomed to being paid large sums of money,
"like by a bank." In Morales' opinion, militarization also
failed, as it led to permanent confrontation without results.
These failures, Morales said, led him to suggest one cato of
coca per affiliate to limit production of coca and to prevent
conflict. He said that when he speaks to the Six Federations
(the main coca labor organization in the Chapare), he tells
them if they fail to respect the cato of coca, the GOB will
have to return to militarization. He said this serves as a
strong deterrent.

10. (C) Regarding the GOB's future plans, Morales spoke in
terms of a net reduction of coca and said his government
plans to work harder in the Yungas (particularly in La Asunta
and in Caranavi). He also stressed the GOB's desire for
closer counternarcotics cooperation with the United States.
Morales lamented a lack of progress in the Yungas but said he
hoped the situation would improve. He thanked the USG for
its help eradicating in Bolivia's national parks, calling
counternarcotics a "shared responsibility." Morales,
however, also defended the GOB's proposal to raise the legal
limits of coca production to 20,000 hectares, saying it is
"impossible to guarantee 10,000- 12,000 hectares of coca" but
that 20,000 hectares is a more realistic goal. Likewise, he
defended the GOB's human rights-conscious policy of
"rationalization," or voluntary eradication, stating that
statistics show that the process is more effective if it is
voluntary. While Morales admitted increased coca cultivation
in some areas, he maintained those cases are the exception
and not the rule. Morales said he knows if he fails, the
United Nations and United States will be watching. In
response to Ambassador Tobias' inquiry about how much coca
should be approved for traditional uses under ideal
circumstances, Morales replied "less than 20,000 hectares."
He admitted, however, that the European Union's legal demand
study was "stuck." Overall, Morales said, he is optimistic
about the GOB's ability to fight narcotics trafficking,
having met its obligations in 2006.

---------------------------------------------
A FIRST JOINT PRESS CONFERENCE WITH MORALES
---------------------------------------------

10. (SBU) In an unprecedented move, Morales joined Tobias for
a joint press conference following the meeting. Morales
stated publicly that he was "very happy" with the meeting,
and publicly thanked the USG for disaster assistance (noting
that more would arrive next week) and general cooperation.
Morales said the GOB's dialogue with the United States was
important to Bolivia and that it would continue. Morales
emphasized the GOB's "culture of dialogue" and its respect
for differences with other countries. Additionally, in
response to questions about the release of the INCSR report
March 1, Morales said that he respected the report as an
internal evaluation of our government, but that GOB
statistics on counternarcotics progress were very different.

---------
COMMENT
---------

11. (C) In perhaps the Embassy's most positive meeting with
Morales to date, the president repeatedly thanked Tobias
privately and publicly for U.S. assistance. Morales seemed
to appreciate the finer points of USAID operations in Bolivia
and to have a superficial understanding of U.S. concerns on
counternarcotics (as reflected by his discussion of a net
reduction of coca). On trade, Morales clearly wants an
ATPDEA extension, as further evidenced by Foreign Minister
Choquehuanca's late February trip to Washington, but again
made no mention of a concrete free trade proposal. While it
seems that Morales may be warming to the benefits of a good
bilateral relationship, his willingness to cooperate on the
more difficult issues and to deliver solid political,
economic, and counternarcotics policies may still be another
matter. End comment.

This cable has been cleared by Ambassadors Tobias and Shapiro.
GOLDBERG

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