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Cablegate: Brazilian Presidential Advisor Promises to Raise

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C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 000880

SIPDIS

DEPARTMENT FOR WHA A/S SHANNON AND BSC, NSC FOR TOMASULO

E.O. 12958: DECL: 06/27/2018
TAGS: PREL ENRG BO BR
SUBJECT: BRAZILIAN PRESIDENTIAL ADVISOR PROMISES TO RAISE
BOLIVIA SECURITY CONCERNS

REF: A. STATE 65088
B. BRASILIA 834

Classified By: Ambassador Clifford M. Sobel, reason 1.4 (b) and (d)

1. (C) The Ambassador met with Brazilian presidential Foreign
Policy Advisor Marco Aurelio Garcia on June 25 to express our
concern regarding the Bolivian government's lack of concrete
assurances to protect our embassy in La Paz. Garcia promised
to raise the issue with the Bolivian ambassador (which he did
immediately after meeting with the Ambassador) and with
higher levels in the Bolivian government. He also said he
would bring the request to President Lula's attention.
Garcia said that, in his view, Bolivia is at a dangerous time
and is in for a lengthy period of increased instability. He
encouraged the USG to offer the Bolivian government gestures
that clearly signal we are fully neutral between the Bolivian
government and opposition. Garcia also told the Ambassador
that President Lula's trip to Venezuela was focused on
commercial cooperation, that he did not see Raul Castro
making any additional changes in response to the EU lifting
of sanctions, and that President Bush and President Lula
should take up cooperation on biofuels at their meeting
during the G-8 in Japan. End Summary.

2. (C) The Ambassador, accompanied by PolCouns (notetaker)
met with Marco Aurelio Garcia on June 25 to deliver points
ref a. Garcia was accompanied by advisors Ambassador Marcel
Biato and Elio de Almeida Cardoso. After conveying
condolences on the death of former first lady Ruth Cardoso,
the Ambassador explained to Garcia our concerns with regard
to the security of our embassy in Bolivia and requested
Brazil's assistance. (Note: The day before, Ministry of
Foreign Relations Under Secretary for South America Enio
Cordeiro had called to follow-up his conversation with the
Ambassador, ref b. Cordeiro said he had spoken with the
Colombian vice minister of foreign affairs regarding the
security of the U.S. embassy, and they had agreed that the
best approach to the Bolivian government would be through the
Papal Nuncio. End note.)

3. (C) The Ambassador asked for Garcia's assessment of the
situation. Garcia said that the current problems stem in
part from President Morales having come to office acting "as
if it were a revolution." His polemics have been a factor in
instability, Garcia said, but the instability already
existed, noting he had visited Bolivia twelve times during
President Lula's first term, and had met with four
presidents. Bolivia's institutional problems remain, and
there has been no effort on either side to follow established
procedures. The opposition is controlled by a "hard"
element, on the one hand. On the other, the government has
refused to differentiate between opposition hard-liners and
"modern rightists" like Tuto Quiroga. So instead of
resolving issues, Garcia said, each side has hardened their
position, and they are beyond hearing each other.

4. (C) As a result, a new stalemate has developed. This will
continue, Garcia predicted, even after the August 10
referendum--if the referendum happens at all. He explained
that the questioning of the referendum's legitimacy by the
opposition provinces called into question whether it would
even take place. Garcia said it is his personal opinion that
Bolivia faces enormous dangers now. The intention of the
opposition, he believes, is to make the central government
irrelevant, to "make it bleed," so it will be brought down by
"non-institutional means." He said the government might in
fact fall, but only "within the established timeframes."
Opposition efforts to force it out of power would not work.
In any case, Garcia believes a long period of instability is
going to ensue that, like a flammable gas in the air, could
be set off by even a small spark. The fact is that Bolivia
is going through major social and political change, which is
hard to control.


BRASILIA 00000880 002 OF 003


5. (C) Garcia said that many Brazilians were surprised by
Morales' confrontational posture toward Brazil early on, and
it had required a great deal of patience to put the
relationship back on track and establish a frank dialogue.
Brazil has told the Bolivian government that it needs to tone
down the rhetoric and resolve its disputes if it wants to
make progress toward what Morales wants to achieve. The
government has a reasonable macroeconomic situation, he said,
but needs to make sure that the current economic growth is
more than just a bubble. As a result, its ability to attract
investment--and particularly to maximize its energy
potential--is crucial. In the latter case, in particular, it
will run into problems not only in filling contracts with
Brazil and Argentina, but also in supplying its growing
domestic needs.

6. (C) The Ambassador said that Bolivia needs to understand
that companies, including Brazilian companies, will not
invest when they see our embassy under attack. Garcia
acknowledged the point, saying that he had pushed Petrobras
to go back into Bolivia in part as a sign to other investors.
The Ambassador asked if Garcia thought that the breakdown of
stability and security in Bolivia would hurt foreign
companies there. He responded that many companies have a
solid commitment and long-term perspective. Heavyweight
investors know that the conflict "won't go beyond a certain
point," and whichever side wins out, Bolivia will need
investment. Petrobras has not lost any money there, he
concluded.

7. (C) Garcia said he would deliver the message to the
Bolivians, noting that he would be meeting with the Bolivian
ambassador following the meeting with Ambassador Sobel.
Garcia suggested that, "Maybe it is time (for the United
States) to have a frank discussion with Bolivia," adding that
"Tom (Shannon) is well-respected in Bolivia." He cannot see
how conflict with the United States is beneficial to Bolivia,
he said. The Ambassador suggested that it might serve as a
distraction for the Bolivian government's domestic problems.
Garcia took the point, but said that in the long run, they
would gain in some ways but lose in others.

8. (C) "We bet on dialogue," Garcia stressed, suggesting that
a "mutual non-aggression pact" was in order. The Ambassador
responded that public support for the security of our embassy
would undoubtedly open other channels for dialogue, but
stressed that security of our embassy cannot be open for
discussion. Garcia agreed. But he cautioned that we should
"not underestimate anti-Americanism in some circles."
("There's an old joke we used to tell," he said: "Why hasn't
there ever been a coup in the United States? Because they
don't have an American embassy.") He said that the United
States needs to offer a sign that we are not on anyone's
side, something that would increase American credibility
vis-a-vis the Bolivian government. Without wishing to be a
mediator, he said, Brazil is willing to help in whatever it
can, recalling a similar commitment he made to A/S Shannon
two years earlier. He suggested that Brazil had a hand in
encouraging Venezuelan President Chavez to lower his tone and
become "less present" today on the issue. Chavez understood
that his efforts were too invasive and ultimately
counterproductive.

9. (C) Coming back to the request, Garcia said the Bolivian
ambassador in Brasilia was "very professional" and he would
sound him out. He also committed to raising the request with
President Lula, adding he knew that A/S Shannon had raised
the issue with Brazilian Ambassador Patriota in Washington.
(Note: In a readout on June 26, Amb. Biato said that Garcia
had had a long meeting with the Bolivian ambassador and had
made clear that it was important for the Bolivian government
to cease provoking the United States and to make amends.
Garcia had stressed that conflict could not be helpful to the
Bolivians. Biato reiterated that Garcia intended to raise
the issue with President Lula and with "higher levels" in

BRASILIA 00000880 003 OF 003


Bolivia. End note.)

10. (C) The Ambassador asked about President Lula's
priorities for his June 27 meeting with President Chavez.
Garcia said that Chavez is seeking an import substitution
model for Venezuelan agriculture and development, and the two
presidents will discuss ten projects that are still being
developed in the areas of steel production, integrated
circuits, television, and plastics, among others. In
agriculture, the Venezuelans are looking to work with Brazil
to develop either family farms or large-scale (i.e., 80,000
ha.) soy farms. They are also interested in dairy and
poultry. The ultimate goal for Chavez, he said, is food
security, and the Venezuelans are trying to create the
infrastructure for the entire food production chain, using
both public and private investment. As an aside, Garcia said
that Venezuela's new finance minister, Ali Rodriguez, "is
different" in that he is knowledgeable and can talk directly
to Chavez.

11. (C) The Ambassador asked what Garcia thought would come
of the EU decision to lift its sanctions. Garcia said he did
not see Raul Castro giving any type of concession to foreign
pressure, and that the EU move was a sign that there is a
perception Cuba is changing. He noted that in Brazil, both
businesses and the press that had been critical of Brazil's
Cuba policy have changed their tune. Businesses are now
interested in investing, and there is less criticism in the
press.

12. (C) The Ambassador raised biofuels, stressing that
although many would like to divide Brazil and the United
States on the issue, we would like to continue working
together. He recalled that Civil Household Minister Dilma
Rousseff had pressed for President Bush to attend the
renewables conference that Brazil plans to host in November,
and asked what the objective would be. Garcia said that
Presidents Bush and Lula should take the issue up again at
the G-8 in Japan. (Comment: It has become clear over the
course of conversations with foreign ministry and presidency
officials that Brazil is still in the initial stages of
planning the conference; they have asked for USG input on the
agenda and objectives. End comment.) After Garcia departed
to meet with the Bolivian ambassador, the Ambassador stressed
to Biato that Brazil's effort to distinguish between corn and
cane ethanol was not productive, and that our focus should be
on the future of biofuels. Biato stressed that President
Lula was not intending to go to Rome for the FAO conference,
but had done so in the end when the focus of criticism fell
on ethanol. The draft speech he had taken with him to Rome
had been "toughened up" there. Biato said he could not
predict how Lula would react to the idea of lowering the tone
on this issue. (Comment: Other contacts, however, have told
us they do expect Lula to back away from this line. End
comment.)

SOBEL

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