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Cablegate: Evo Morales' War On Biofuels

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DE RUEHLP #2030 2052314
ZNR UUUUU ZZH
R 242314Z JUL 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 4442
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UNCLAS LA PAZ 002030

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SENSITIVE
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E.O. 12958: N/A
TAGS: PGOV PREL EAGR ECON BL BR
SUBJECT: EVO MORALES' WAR ON BIOFUELS


1. (U) Recent food shortages, increased food prices, and
rising inflation in Bolivia have prompted President Evo
Morales to strike out verbally at biofuels. In recent weeks,
President Morales' anti-biofuel statements have become
heated, echoing those of his political allies Fidel Castro
and Hugo Chavez. These comments have also placed President
Morales at odds with President Lula de Silva of Brasil, who
is a defender of biofuels. Other GOB officials have added
additional accusations against biofuels. The Minister of
Planning announced July 24 that Bolivia would import more
food and attributed food shortages to three factors: the
"international tendency" to use food products for biofuels,
climate change, and Bolivia's historic lack of
self-sufficiency in food. (Note: GOB officials have blamed
global warming for other domestic problems, including the
flooding of 2006, when President Morales linked the flooding
to global climate change and U.S. energy policies. End note.)

2. (U) In recent public statements, President Morales
alleged rice shortages in Bolivia are linked to use of rice
for biofuels, stating: "rice traders informed us that
Brazilian entrepreneurs are in Santa Cruz to collect all rice
production...in order to produce biodiesel...which will
create rice shortages." (Note: rice is not used in biofuel
production. End note.) The president of the Agricultural
Chamber of the East (CAO) Mauricio Roca declared that
Bolivian rice production is sufficient for the domestic
market. Despite this reassurance, President Morales announced
that all Bolivian small farmers (campesinos) should sow an
additional 1.5 hectares of rice, to supplement the internal
market and for family use. President Morales has also warned
of sugar scarcities, although the Bolivian Institute for
External Trade, a private organization, ruled out a possible
sugar shortage, saying that in fact there is a surplus of
150,000 tons this year, higher than most years: Gary
Rodriguez, director of the Institute, lamented that "they are
giving him (Morales) such misinformation."

3. (SBU) President Morales has blamed biofuels for the
increase in domestic food prices (he has also, somewhat
muddle-headedly, stated that there is no inflation in
Bolivia, just rising prices.) Bread-makers in Bolivia
recently protested for the right to raise their prices, and
the GOB announced that it would begin subsidizing the
importation of wheat. On July 22, President Morales charged
that the USG no longer provides wheat donations to Bolivia,
stating: "In Bolivia since 2005, there are no United States
or Canadian donations (of wheat). Why are there no donations
of wheat? They are not producing wheat, because wheat cannot
be used for biofuels: they set aside fields for corn or for
sugar cane which go to biofuel (production)." (Note: In
fact, U.S. wheat donations continue under the PL-480
program.) Commenting on the increase in prices, President
Morales said, "There is another external factor which I
really fear and all Bolivians must prepare to confront: the
so-called biodiesel or biofuel." President Morales went on
to add that, "It is not possible that our products be used
for American scrap instead of for human beings."

4. (SBU) Comment: President Morales' attacks on the
free-market system are bearing bitter fruit: inflation,
higher food prices, and shortages of gasoline and liquefied
natural gas. It appears his advisors, and the President
himself, would prefer to blame external factors rather than
bear the blame themselves, and biofuels make a convenient
target. We expect President Morales to continue to make hay
out of the biofuels issue and to blame the U.S. and its
"policies that create food shortages" in Bolivia and beyond.
End comment.
GOLDBERG

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