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Cablegate: Rio Radar - August 28, 2009

VZCZCXRO3892
RR RUEHRG
DE RUEHRI #0290 2402008
ZNR UUUUU ZZH
R 282008Z AUG 09
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 5068
INFO RUEHBR/AMEMBASSY BRASILIA 1361
RUEHSO/AMCONSUL SAO PAULO 5282
RUEHRG/AMCONSUL RECIFE 3522

UNCLAS RIO DE JANEIRO 000290

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG EPET PHUM SOCI BR
SUBJECT: Rio Radar - August 28, 2009

1. (U) Rio Radar is a weekly compilation of key economic, political,
commercial, and other developments in the states of Rio de Janeiro,
Bahia, Minas Gerais, Espirito Santo, and Sergipe. This week's
subjects:

PRESALT OIL ROYALTIES ISSUE DIVIDES GOVERNORS IN RIO CONSULAR
DISTRICT

2. (U) On August 25, Globo, Rio's newspaper of record, reported that
Rio de Janeiro Governor Sergio Cabral (PMDB party) and Minas Gerais
Governor Aecio Neves (PSDB party) disagreed over how the pre-salt
oil regulatory framework should address distribution of royalties.
According to the report, Cabral stated, "We are going to fight with
all democratic instruments available to us against national
distribution of resources." Governor Neves responded that all
states of Brazil need to benefit from royalty payments, in order to
avoid "greater developmental distortions between certain states and
regions."

3. (U) In an apparent sign of protest to rumors that President
Lula's Administration (PT party) would not introduce the royalty
issue in the new regulatory framework to avoid political conflicts
(and thus hold up Congressional passage), Rio Governor Cabral and
Espirito Santo Governor Paulo Hartung (PMDB party) publicly declined
President Lula's invitation to an August 31 announcement ceremony of
the reform package, in Brasilia. (Note: Rio de Janeiro and Esprito
Santo are responsible for 90 percent of Brazil's oil production and
would stand to lose a significant amount of revenue if other states
share in the pre-salt oil royalties under the new regulations. For
Rio de Janeiro, which along with spirito Santo, receives the lion's
share of royalties and taxes, this could represent a loss of 14
billion Brazilian Reals - 7.5 billion USD - per year. End Note).
Minister of Mines and Energy Edison Lobao (PMDB party) subsequently
made conflicting statements as to whether or not the Lula
Administration will include the royalties issue in the upcoming
regulatory framework.

RIO GOVERNOR INTENDS TO 'PACIFY' 30 ADDITIONAL FAVELAS WITHIN NEXT
YEAR

4. (SBU) Wilson Carlos de Carvalho, a senior official advising Rio
Governor Cabral on security, told us on August 28 that state and
local security forces intend to occupy and maintain control of some
30 favelas within the next year. The commander for BOPE, the state
military police's special operations unit, told us on August 19 that
his forces intended to occupy at least three favelas by the end of
the year (Note: Rio state Pacification Police, or UPP, currently
maintain a presence in four favelas throughout Rio de Janeiro. End
Note). Carvalho said the state intends to dedicate an additional
3,500 new police academy recruits to this effort over the next year.


RIO STATE BRINGS CLASSICAL MUSIC TO FAVELAS...BUT WHAT ABOUT
SERVICES?

5. (SBU) As part of Rio State's favela "pacification" strategy, the
Symphonic Orchestra of Rio de Janeiro's Municipal Theater performed
at Cidade de Deus (City of God), a favela immortalized by the 2002
film of the same name. A community leader of the Batan favela told
us on August 19 that music performances were also taking place in
that community. At the same time, Colonel Jose Vieira, commander of
the Pacification Police (UPP) said his troops last week had to quell
"near-rioting" crowds of residents demanding basic services in one
of the other two favelas the UPP currently controls.

© Scoop Media

 
 
 
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