Cablegate: Tensions with Brazil Increase Over Land And


DE RUEHAC #0722/01 2981841
O 241841Z OCT 08




E.O. 12958: DECL: 10/25/2028

REF: A. ASUN 709
B. ASUN 181
C. ASUN 590

Classified By: Ambassador Liliana Ayalde for reasons 1.4 (b) and (d).


1. (C) Paraguay's bilateral relations with Brazil soured in
October over Brazilian military exercises on the Paraguayan
border and an increase in invasions of land owned by
Brazilian-Paraguayans. Although Brazil informed Paraguay of
its plans to conduct military exercises, Paraguayan officials
claimed Brazil did not give Paraguay enough notice and
objected to Brazil's show of force, taking the exercise as an
affront to Paraguay's sovereignty. The Brazilian military
initially assuaged Paraguay's concerns by claiming that the
exercises were routine; however, rhetoric from the Brazilian
military later fanned the fire. The Paraguayan government
responded to the crisis by banning foreigners from owning
property for agricultural purposes, and sent in security
forces to quell the campesino movements. Although Brazil
regularly conducts military exercises, this one came at a
particularly sensitive time. While the Brazilian maneuvers
(and Paraguayan reaction) have gone largely unnoticed in
Brazil, Paraguayans (including President Lugo himself) will
be nursing their bruised egos for some time. END SUMMARY.


2. (C) Paraguay's bilateral relations with Brazil soured in
October over large-scale Brazilian military exercises on the
Paraguayan border. The exercise -- dubbed "Operation
Southern Frontier II" -- began October 13 and concluded
October 24. It included land, air, and amphibious operations
involving up to 3,000 soldiers, 250 patrol vehicles, seven
helicopters, and live ammunition. The Brazilian military
destroyed several ports used for smuggling on the Paraguay
River, and set up check points near the Brazilian border
crossing near Ciudad del Este, where it inspected over 6,000
vehicles. The press reported that the military exercises
notably dampened the flow of commerce between Paraguay and
Brazil. When Ambassador traveled with President Fernando Lugo
to the border town of Capitan Bado in Amambay Department
October 20, local officials reported that the Brazilians had
removed six tanks and a large number of troops only hours
before their arrival. Paraguayan Minister of Agriculture
Vera Beranjano privately told the Ambassador during the trip
that he considered her presence a show of U.S. support for
Paraguay to Brazil.

3. (U) Although Brazil officially informed Paraguay of its
plans to conduct military exercises, Paraguayan officials
claimed Brazil did not give Paraguay enough notice and
objected to Brazil's show of force, taking the exercise as an
affront to Paraguay's sovereignty. (NOTE: In addition to
diplomatic channels, the Brazilian DATT informed his
Paraguayan counterpart about the exercise in May 2008. END
NOTE). Lugo stated October 16, "Brazil can do what it wants
inside its territory" but that "we will not accept any
interference." The Paraguayan Defense, Foreign and Interior
ministries warned Brazil not to violate Paraguay's
territorial integrity. (NOTE: Brazil has repeatedly
encroached on Paraguayan territory during military and police
operations, and the press reported that Brazilian troops
entered Paraguay during the military exercise. The Ultima
Hora newspaper claimed October 17 that the Brazilian military
illegally entered Amambay Department during the exercise by
traveling on routes that pass through Paraguay. END NOTE.)
The Paraguayan Defense Ministry issued a statement October 16
denouncing the military exercise and stating that Paraguayan
Military Forces were on alert for its duration.

4. (SBU) The Brazilian military initially assuaged
Paraguay's concerns by claiming that the exercises were
routine; however, rhetoric from the Brazilian military later
fanned the fire. Brazil's 5th Army Division Communications
Chief Ariel Okopny told the Ultima Hora newspaper October 16
that "It's not a show of force against Paraguay but against
lawlessness on the border. This is an internal action, which
is held regularly, where the Brazilian Armed Forces interact
with federal and interstate bodies." (NOTE: Paraguayan
Ambassador to Brazil Luis Gonzalez Arias said that the

military exercises along the Paraguayan border "should not
scare us, because they are military exercises which Brazil
has been carrying out for more than ten years." END NOTE.)
However, two days later, Brazilian Southern Command Chief
General Jose Elito Carvalho said "through this demonstration
of force, the Armed Forces are sending another message to
neighboring countries." Carvalho also told the press during
an interview October 18 that "the phase when we had to hide
things has passed. We now have to demonstrate that we are a
power, and it is important that our neighbors know about it."
The Paraguayan press reported as current statements Carvalho
made in June that the Brazilian military would intervene if
Itaipu Dam were taken over by "social movements" if so
ordered by Brazilian President Luiz Inacio Lula da Silva.

5. (SBU) Lugo dismissed Carvalho's statements October 19,
saying, "If you believe that military exercises at the border
or press statements are going to scare us, they will not."
Interior Ministry Rafael Filizzola, who oversees the National
Police, condemned Carvalho's remarks as an "outrage to our
sovereignty." Lugo stated that he would ask Lula for an
explanation of the military exercises when they meet at the
Ibero-American Summit in El Salvador on October 29.


6. (SBU) Tensions between Paraguay and Brazil further
increased after several landless farmer groups illegally
occupied properties owned by Paraguayans of Brazilian origin
("BrasiguayosbKZGQV]H5pg&*rTe lands.
Campesino groups have targeted large Brazilian landowners,
who are widely believed to illegally own Paraguayan land, to
refuse to hire Paraguayan farm workers, and to contaminate
the environment with agrotoxins. (NOTE: Between
300,000-500,000 Brasiguayos live in Paraguay. END NOTE.)
Leading daily newspaper ABC Color reported October 17 that
campesino groups illegally occupied 33 properties in seven
Paraguayan departments, including 20 properties in Alto
Parana. It also reported that these groups threatened to
invade another 110 properties, including 74 in San Pedro.
San Pedro campesino leaders Elvio Benitez and Antonio Cabrera
of the National Patriotic Front (FPN) told Ultima Hora
October 19 that they had ended their truce with the
Paraguayan government and will occupy 23 large private
landholdings in San Pedro covering 3,000 hectares of land
claims was illegally sold to Brazilian farmers. In Alto
Parana, the Alto Parana Association of Agriculturists
(ASAGRAPA), Campesino Alliance, and Paraguayan Agrarian
Movement Revolutionaries -- groups affiliated with the
Without Land (Sin Tierras) campesino movement -- illegally
occupied over 20 properties, including several industrial

7. (SBU) The Paraguayan government responded to the crisis
by banning foreigners -- including "Brasiguayos" -- from
owning land for agricultural purposes October 6. Paraguay's
Rural Development and Land Institute (INDERT) issued the
decree, which purports to modify a 2005 law that allows
foreigners to own land for any purpose as long as it is not
located within 50 miles of Paraguay's borders. Lugo assured
"Brasiguayos" that the government would not actively expel
them from Paraguay. However, at the urging of the Brazilian
consulate in Ciudad del Este, Brasiguayos in Alto Parana and
Itapua departments met October 15 and decided to create a
council to ask Brazil's Foreign Minister, Celso Amorim, to
deal with this issue at the Brazilian and Paraguayan high
government levels.

8. (SBU) The Paraguayan government ordered hundreds of
unarmed police officers to San Pedro and Alto Parana
departments to quell the campesino movements. Ultima Hora
reported October 21 that the National Police had 510 agents
in 19 districts in San Pedro, and deployed over 100 officers
in the past month to key locations in San Pedro and
Concepcion departments to help manage unrest caused by
campesino land occupations, narcotrafficking, and kidnappings
(ref A). The Interior Ministry warned October 17 that armed
groups camouflaged as peasants existed in several illegal
campesino settlements in Alto Parana Department. Ultima Hora
reported that police consider it possible but could not
confirm that members of the so-called Paraguayan People's
Army (EPP) are involved in fomenting unrest in San Pedro (ref
B). Political analyst Roque Gonzalez Vera stated October 19
that campesino leaders are using the recent death of
Bienvenido Melgarejo in a clash with Paraguayan police as a

"martyr" to carry out their "patriotic struggle" through
armed resistance. Campesino leader Tomas Zayas vowed that
campesinos will retaliate for Melgarejo's death.

9. (C) Interior Minister Rafael Filizzola has made strong
public statements that the government will not tolerate the
invasion of private property. Privately however, Filizzola
told RSO October 20 that he is worried about the continuing
threats of land invasion and said the GOP is struggling with
how to respond. President Lugo broke his silence on the
issue October 18 to say he would not tolerate violent action
of any kind, and that legal means must be used to resolve
conflict. Lugo met for three hours October 23 with the
congressional members of his Patriotic Alliance for Change.
One participant in that meeting told the Ambassador late on
October 23 that she and others were pushing the president for
an even stronger position on the importance of respecting
private property and the rule of law.


10. (C) Although Brazil regularly conducts military
exercises, this one came at a particularly sensitive time.
One of Lugo's central campaign promises was to renegotiate
the Itaipu dam treaty with Brazil. However, preliminary
talks between the two countries have not resulted in any
signals that Brazil is open to renegotiation, leading many
Paraguayans to believe that Brazil's military exercise is a
reminder of Brazil's military and economic strength (and
Paraguay's relative weakness).

11. (C) Press reports also speculated that the Brazilian
military may have been sending a message to Venezuela, which
continues to dabble in Mercosur affairs. Political analyst
Gonzalez Vera said the purpose of the Brazilian military
exercises was to warn Venezuelan President Hugo Chavez that
Paraguay is linked to Brazil's security plan and to not
meddle in Paraguay's internal affairs by financing
pro-Venezuelan political campesino groups. (NOTE: During
his visit to San Pedro August 16, Chavez singled out the
department -- the epicenter of campesino activity -- for
local development assistance (ref C). END NOTE.)


12. (C) While the Brazilian maneuvers (and Paraguayan
reaction) may not have made headlines in Brazil, Paraguayans
(including President Lugo and many members of his cabinet)
will be nursing their bruised egos for some time. Brazil may
have legitimate reasons for choosing to flex its military
muscle, and the exercises may be routine, but these are the
first Brazilian exercises during the Lugo administration.
The Paraguayan government is of the mind that they could have
been handled with increased care. The perception here is
that Brazil is reminding Paraguay of the neighborhood pecking
order, of its weak negotiating position on Itaipu, and that
Brazil is watching out for its own in Paraguay. END COMMENT.

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