Cablegate: Argentina: San Luis Governor Discusses His Province's


DE RUEHBU #0158/01 0421722
R 111722Z FEB 08




E.O. 12958: N/A
SUBJECT: Argentina: San Luis Governor Discusses His Province's
Economic Turnaround

1. (U) Summary: San Luis Governor Jose Luis Gioja briefed the
Ambassador February 7 on San Juan's infrastructure development,
investment climate, and environmental protection measures. The
Ambassador congratulated the Governor on San Juan's impressive
export growth -- particularly in the mining and agricultural sectors
and conveyed his desire to visit San Juan. Gioja was accompanied by
Ruperto Godoy, chairman of the Foreign Affairs Committee in the
National Chamber of Deputies. With Diputado Godoy, the Ambassador
discussed upcoming visits to Argentina by U.S. congressional
delegations, and extended an invitation for Argentine
parliamentarians to visit Washington. End Summary.

Electoral Mandate

2. (SBU) Gioja, who comes from a traditional family of Peronist
politicians in San Juan, expressed to the Ambassador great
satisfaction at being reelected in October with a record-breaking
60% of the vote, but claimed this would be his last term as
governor. (Note: In the press, Gioja has been vocal in his support
of efforts to draft former president Kirchner as the head of the
Justicialist Party, referring to him as the most representative
citizen in the party, and "perhaps, in Argentine politics." His
alignment with the Kirchners' "Victory Front" has been rewarded with
increased attention to the province by the national government,
including recent visits by senior Cabinet members. End note.)

Economic Turnaround

3. (U) Gioja spoke about the harshness of the 2001-2002 crisis in
San Juan, where poverty, crime, and education indices are all worse
than the national average. He said the province had learned from
this experience and is working to improve its infrastructure, and
San Juan is now ranked the fourth most competitive province in
Argentina. The Ambassador congratulated Gioja for San Juan's
impressive export growth and economic rebound. Gioja said that
during his first term, San Juan's export earnings increased
dramatically, from $140 million in 2003 to $800 million in 2007.
San Juan is well known for its wines, and has more than doubled
their export value since 2006. It is also the world's leading
exporter of grape juice. Gioja noted that San Juan was exporting
grape juice concentrate to the United States despite a 17% U.S.
tariff. Gioja noted that San Juan's agricultural potential was
limited by its mountainous topography and dry climate. The majority
of its recent economic success is due to increased mining activity.
The largest project is a US$2 billion gold and silver mine that
straddles the Argentine/Chile border and is being developed by the
Canadians. The Ambassador asked how local authorities were ensuring
environmental protection. Gioja said the province was seeking to
study and address environmental impact concerns in the most
transparent manner possible, including via participation by all
interested groups, and build the state's oversight capacity.

Looking West - Chile and the Pacific Rim

4. (U) Gioja referenced Chile as a valuable model for economic
growth, legal reform, and environmental protection. He mentioned
his meeting with Chilean President Michelle Bachelet one week prior
to secure her commitment in collaborating to build a 13-km tunnel to
facilitate trade between both countries. The tunnel proposal was
still being vetted for technical feasibility and financial
viability. Gioja noted that the tunnel could become a link in a
land route that ultimately could connect Porto Alegre in Brazil with
Coquimbo in Chile and run through some of the richest parts of
Argentina. The Ambassador observed the psychological importance of
such access in directing the development of business relationships
in this direction, and noted the great demand in the Pacific Rim
market for commodities, which is one of Argentina's strengths.
Diminished transport costs would make this more feasible and

A World-Class Scientific Anchor

5. (U) San Juan is home to a national astronomical observatory which
thrives in San Juan's clean air and clear nights protected by the
180,000 acre El Leoncito National Park. The Ambassador observed
that the astronomical complex (CASLEO) is internationally known, and
that there is significant participation by U.S. universities. The
complex houses a unique Submillimeter Solar Telescope installed in
1999, permitting observation of previously unexplored frequencies.
Gioja spoke of the excellent exchange of information generated by
the observatory.

6. (U) Gioja invited the Ambassador to visit San Juan, and the

Ambassador agreed in principle. The Ambassador spoke of the
potential for further cooperation and the Embassy's interest in
strengthening ties.

Congressional Ties

7. (U) Turning to Godoy, a national deputy from San Juan allied with
Gioja, the Ambassador said he expected in the weeks and months ahead
some possible visits to Argentina by U.S. congressional delegations.
Godoy welcomed the prospect of some congressional delegations and
the strengthening of parliamentary ties. The Ambassador encouraged
reciprocal visits to Washington by members of the Argentine


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