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Cablegate: Gob Touts Success of Peoples' Trade Agreement

VZCZCXYZ0016
RR RUEHWEB

DE RUEHLP #3302/01 3411329
ZNR UUUUU ZZH
R 071329Z DEC 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 1575
INFO RUEHAC/AMEMBASSY ASUNCION 6361
RUEHBO/AMEMBASSY BOGOTA 3685
RUEHBR/AMEMBASSY BRASILIA 7551
RUEHBU/AMEMBASSY BUENOS AIRES 4805
RUEHCV/AMEMBASSY CARACAS 2057
RUEHPE/AMEMBASSY LIMA 2130
RUEHME/AMEMBASSY MEXICO 1953
RUEHMN/AMEMBASSY MONTEVIDEO 4255
RUEHQT/AMEMBASSY QUITO 4694
RUEHSG/AMEMBASSY SANTIAGO 9279
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

UNCLAS LA PAZ 003302

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND LPETRONI
STATE PASS TO USTR FOR BHARMAN
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: ETRD EINV ECON PREL PGOV BL
SUBJECT: GOB TOUTS SUCCESS OF PEOPLES' TRADE AGREEMENT

REF: LA PAZ 1172

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SUMMARY
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1. (SBU) In a December 2 newspaper insert, the GOB touted the
early success of its April 29 Peoples' Trade Agreement with
Venezuela and Cuba (reftel), highlighting the disbursement of
approximately $4 million of a $100 million Venezuela-financed
development fund. The money has been distributed (often via
small loans) to businesses in five departments, with
additional disbursements expected in the near future.
Despite the GOB's enthusiasm, it is hard to believe the
agreement will have a significant impact on the lives of poor
Bolivians, particularly with just four percent of funds
allocated and few concrete plans for generating employment or
boosting economic growth. End summary.

-----------------------
GOB TOUTS EARLY SUCCESS
-----------------------

2. (U) In an eight-page December 2 newspaper insert, the GOB
touted the early success of its April 29 Peoples' Trade
Agreement with Venezuela and Cuba (reftel), highlighting the
disbursement of approximately $4 million of a $100 million
Venezuela-financed development fund. The account and its
associated Productive Development Program are designed to
help small and medium enterprises generate employment while
furthering the "revolutionary" process of abolishing the
"neoliberal" economic policies of the past in favor of new,
state-supported development methods.

------------------------------
SMALL PROJECTS RECEIVE SUPPORT
------------------------------

3. (U) Funds have been distributed (often via small loans) to
small and medium businesses in five departments, with
additional disbursements expected in the near future.
Recipients have used an estimated 80 percent of funds to
purchase capital equipment, machinery, and other inputs for
textile and apparel firms, furniture factories, leather goods
companies, and other enterprises in La Paz, El Alto, Santa
Cruz, and Tarija. Other projects include the construction of
a milk production plant in Pucarani, a village in the
department of La Paz; the development of a new central market
in Trinidad, capital of Beni department; and the opening of a
Brazil nut processing facility in Riberalta, an isolated town
in the same department.

4. (U) According to GOB figures, more than 100 businesses
will receive assistance, many of them microenterprises with
no more than a handful of employees. The GOB claims the
investment projects and microcredits will directly benefit an
estimated 10,000 Bolivians and indirectly assist 50,000 more,
primarily through the provision of new jobs and the creation
of expanded opportunities along the supply chain.

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COMMENT
-------

5. (SBU) Despite the GOB's enthusiasm, it is hard to believe
the Peoples' Trade Agreement will have a significant impact
on the lives of poor Bolivians, particularly with just four
percent of development funds allocated and few concrete plans
for generating employment or boosting economic growth. GOB
statistics themselves suggest the trilateral pact will have
little economic effect: according to the Bolivian Institute
of Foreign Trade, Bolivian exports to Venezuela in the first
six months of the year totaled only $90 million, slightly
lower than the same period last year, and exports to Cuba
reached a grand total of only $200. Despite its supposed
success, the Peoples' Trade Agreement seems little more than
an empty political gesture designed to drum up support for
the Morales administration.
URS

© Scoop Media

 
 
 
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