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Cablegate: Brazil's Rondonia State Confronts the Problems Of

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ZNR UUUUU ZZH
R 111915Z JUN 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 9199
INFO RUEHSO/AMCONSUL SAO PAULO 0081
RUEHRG/AMCONSUL RECIFE 6791
RUEHRI/AMCONSUL RIO DE JANEIRO 4571
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHBU/AMEMBASSY BUENOS AIRES 4822
RUEHAC/AMEMBASSY ASUNCION 6127
RUEHMN/AMEMBASSY MONTEVIDEO 6924
RUEHSG/AMEMBASSY SANTIAGO 6278
RUEHLP/AMEMBASSY LA PAZ 5408
RUEHPE/AMEMBASSY LIMA 3482
RUEHCV/AMEMBASSY CARACAS 3702
RUEHQT/AMEMBASSY QUITO 2231
RUEHBO/AMEMBASSY BOGOTA 4233

UNCLAS SECTION 01 OF 04 BRASILIA 001067

SIPDIS

DEPT PLEASE PASS TO USTR SCRONIN
USDOC FOR 3134/USFCS/OIO/WH
USDOC FOR 4332/ITA/MAC/WH/OLAC/MCAMPOS
AID/W FOR LAC/AA
TREASURY FOR OASIA
DOI FOR USFS LMAYHEW

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECIN PGOV SENV EAID PHUM ETRD BR PE
SUBJECT: BRAZIL'S RONDONIA STATE CONFRONTS THE PROBLEMS OF
DEVELOPMENT (BADLY)

REF: A) Brasilia 315, B) Brasilia 1025, C) Brasilia 822

1. (SBU) Summary. Located in center-west Brazil, the state of
Rondonia forms part of the country's frontier with Bolivia.
Sparsely populated until the 1980s, Brazil's military government
during its reign paved highway BR 364 to the state's capital, Porto
Velho, to encourage (for national security purposes) internal
migration to the region. Unfortunately, the helter-skelter rush to
populate the state has resulted in a foul mix of development
problems: rampant deforestation of Amazon reserves, malaria,
corruption, claim-jumping, human rights violations, and lack of
respect for the rule of law. Now local civil society is wrestling
with how to confront perhaps its most important challenge: whether
to proceed with a series of dams on the Rio Madeira which would
generate badly-needed employment for the state. Even though some
environmental advocates fear construction of the two dams closest to
the capital could provoke a series of ecological disasters, the
federal, state, and municipal government all strongly support the
project. The lack of serious debate on this issue is emblematic of
the long path Rondonia must travel to establish a tradition of good
government. End Summary.

2. (U) This cable is the second in a two-part series looking at the
Brazilian frontier states of Acre and Rondonia. During his time in
Porto Velho, Emboff met with municipal government officials, NGO
representatives, researchers, and the press. Reporting on Acre was
sent in reftel B.

--------------------------------------------- -
Porto Velho: From Mad Maria to the Present Day
--------------------------------------------- -
3. (SBU) Perched just north of Bolivia, Rondonia sprang to
prominence in the early twentieth century as a way station for
rubber coming out of Bolivia and headed to market via the Amazon
river. As barge transport of the latex along the Rio Madeira (one
of the Amazon's tributaries) was a bit slow, Brazilian strategic
planners came up with the idea of constructing a railroad through
the dense jungle between Porto Velho and the city of Guajara-Mirim
in the southern part of the state. This gargantuan project, which
brought in 40,000 laborers - 6,000 of whom died of accidents,
malaria and gunfights in the process, ended in failure as the
Madeira-Mamore railroad line never reached far enough to make a
difference commercially and functioned only sporadically until its
eventual closure in 1972. The tragedy of the entire episode was
later memorialized in the book "Mad Maria" (later adapted by TV
Globo into a popular tele-novela), which captured the sense of
excess and abandon seemingly inherent to Rondonia.

4. (SBU) Not designated a state until 1981, Rondonia is named
after Candido Rondon, the famous Brazilian army colonel who explored
the wilderness. In 1913, Rondon, together with ex-President Teddy
Roosevelt and one of his sons, set off on a months-long journey
through thick, mosquito-ridden jungle to navigate a previously
uncharted river - subsequently named, in the ex-President's honor,
the Roosevelt River. However, Roosevelt contracted malaria during
the trip and the effects of disease, heat, hunger, and physical
fatigue (he lost fifty pounds) ended up contributing directly to his
death in 1919. Again, yet another example of the degree to which
Rondonia is prone to excess.

5. (SBU) In the 1980s, Brazil's military government, keen to
establish a greater civilian presence on the country's frontier,
encouraged marginalized populations from the states of Parana, Mato
Grosso, and Espirito Santo to migrate to Rondonia, offering settlers
land for ranching and agriculture and the prospect of quick riches
mining gold and diamonds. But, as one federal government official
resident in Porto Velho noted, the process was poorly planned and
more people arrived in the state than could be accommodated. As a
result, incoming migrants encroached upon the traditional

BRASILIA 00001067 002 OF 004


populations of indigenous communities and former rubber tappers
living in the interior of the state, and those arriving in Porto
Velho overwhelmed the physical and institutional infrastructure of
the city. (This process continues as the population of the
metropolitan area surrounding the capital increased by nearly 14
percent percent, from 335,000 to 381,000, between 2000 and 2006.)


6. (SBU) Rondonia is still feeling the effects of this migration:
three-fifths of the state has been deforested and violence abounds,
both in the capital and in the interior. Indeed, Porto Velho is one
of the few state capitals in Brazil where malaria, sustained by the
continued expansion of the Amazon frontier, is endemic.

-----------------------------------
Lack of Respect for the Rule of Law
-----------------------------------
7. (SBU) Unlike the neighboring state of Acre (septel), Rondonia
does not have a history of good governance. In 2006, the Federal
Police arrested 23 of 24 members of the state legislature, along
with state prosecutors and judges, on charges of corruption. No one
ended up going to jail, and incredibly five of the legislators
arrested were reelected in 2006 - as was the lone "honest man." As
for the current governor, Ivo Cassol, he hails from the "caudillo"
tradition. Contacts in Porto Velho report that in television
appearance during his reelection campaign, upon being asked why he
had not emphasized education more in his administration, he replied
that education was not important: "look at me, I'm rich, I'm
powerful, but I have almost no schooling." Others report that when
a rancher who owned land adjoining Cassol's fazenda stubbornly
refused to sell a parcel of that property to him, the Governor had
the state police machine gun the rancher's cattle using one of the
state police's helicopters.

8. (SBU) NGO and civil society reps note that a climate of impunity
reigns in Rondonia, with little respect for the rule of law. Crime
rates are high in the capital and few crimes are ever solved.
Politicians are often on the take, receiving tips in return for
legalizing title to land occupied by claim-jumpers. Loggers
regularly organize invasions of Indian reserves seeking to illegally
exploit stands of hardwood timber. (In 2006, indigenous leader
Almir Surui of the Surui tribe ended up being evacuated to Brasilia
and then Washington, D.C. for his own protection after opposing the
illegal removal of timber from tribal reserves.) Community leaders
and environmental protection officials are threatened when their
activities conflict with those of powerful ranching, timber, or
mining interests. One USAID-supported NGO stated that credible
threats have been made against its staffers who defend indigenous
persons as well as IBAMA (the country's environmental agency)
personnel who have collaborated with them.

------------------------
The Mayor of Porto Velho
------------------------
9. (SBU) The one bright spot appears to be the administration of
Porto Velho mayor Roberto Eduardo Sobrinho (PT). Sobrinho has
opened a dialogue with a wide range of community groups in an effort
to move forward on issues such as inadequate housing, improve access
to schools, rising crime, and waste disposal. (While Porto Velho's
roads are paved, only 2 percent of homes there are hooked up to
sewer lines and only 25 percent of residents have access to adequate
medical care.) NGO groups report that after years of butting heads
with the state and municipal governments, the open exchange of views
with city hall has been a breath of fresh air. According to
Sobrinho and his cabinet, while they improved a variety of social
indicators the largest constraint they face is the lack of
employment, particularly for non-skilled workers.

10. (SBU) For Sobrinho, the magic bullet in this regard could be

BRASILIA 00001067 003 OF 004


construction of the two hydroelectric facilities planned just
outside the city which are expected to create nearly 20,000 jobs.
Together, the two dams (at Santo Antonio and Jirau) would cost about
US$9 billion, with funding coming from the Brazilian National
Development Bank (BNDES) and the World Bank. Santo Antonio and
Jirau would produce 3,150 and 3,330 megawatts of energy, most
destined for the energy-deficient Sao Paulo area although Rondonia
and Acre state officials believe that some would remain to satisfy
local demand as well.

---------------------------------
Pockets of Opposition to the Dams
---------------------------------
11. (SBU) While President Lula, his Chief of Staff, the Governor,
the Mayor, an estimated 90 percent of the population of Porto Velho,
and a clear majority of the NGO community support construction of
the two dams - one at Santo Antonio and the other at Jirau, a small
but vocal element of the local environmental community does not.
Critics, supported by the International River Network NGO, raise a
variety of compelling points, noting that the environmental impact
study done, in their view, is incomplete. They state that:

-- because of possible excess sedimentation it is unclear how much
land would be inundated and what would be the consequences. In
particular, they worry that if an open landfill just outside of
Porto Velho is flooded, the heavy metals buried there could
contaminate both the groundwater and the city's supply of drinking
water.
-- the increase in standing water near Porto Velho will only
exacerbate the city's problems in terms of mosquito-borne diseases
such as malaria and dengue fever.
-- the two projects could adversely affect the habitat of migratory
fish as well as those of the riverside communities which depend upon
these stocks for their livelihood. (The state's fishing industry
employs 20,000 workers, of whom 70 percent live in the capital
itself.)
-- construction of the dams would worsen Porto Velho's precarious
state as the increase in migrants coming to the city (estimated at
somewhere between 40,000 and 250,000 people) would overwhelm the
capacity of the city to provide social services.
-- Porto Velho does not need the electricity the dams would supply
as a 500-km gas pipeline is already being constructed, linking the
city to reserves in Urucu (Amazonas state).
-- The main beneficiaries of the project will be Brazil's various
construction consortia, which are merely looking to maintain the
volume of their business no matter what they build is needed or not.
(Comment: The unstated corollary here is that the politicians
shepherding the initiative would benefit from under the table
"tips.")

12. (SBU) The opponents' arguments are worthy of debate, but, in
many ways, are also irrelevant. Focused on expanding the country's
energy infrastructure so as to lessen the possibility of future
shortages in the country's large metropolitan areas, President Lula
and his Chief of Staff have made clear that they want these dams
built. Lula specifically included these two projects in his highly
touted national infrastructure package (PAC), released in January
shortly after his inauguration. Another element of the PAC was a
proposal to split IBAMA (the national environmental agency) in two,
Ref C, so that its forest protection functions did not interfere
with its environment licensing responsibilities - and projects such
as these would move forward. On May 30, Sobrinho told Emboff that
he had recently heard that IBAMA had preliminary approved the two
facilities, and in June 5 remarks to the press Lula's Chief of Staff
said the same.

13. (SBU) Indeed, the Santo Antonio and Jirau dams would represent
the vanguard in a package totaling five projects, of which at least
two would be bi-national ventures with Bolivia. However, given the

BRASILIA 00001067 004 OF 004


chill in relations between Bolivia and Brazil, it could be that the
bi-national projects are on a somewhat slow track.

-------
Comment
-------
14. (SBU) Given the 60 percent deforestation in Rondonia efforts
to preserve the Amazon forest, while important, are definitely a
rear-guard action. What will prove key in the future is the
success, or lack thereof, of state/local authorities in grappling
with the problems occasioned by deforestation and runaway
development. Absent any improvement in state governance, one can
expect to see in coming years increased violence, disease, crime and
labor exploitation.

Sobel

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