Cablegate: Gor Gives, Gets Little From Ecuadorian President

VZCZCXRO0793
PP RUEHDBU
DE RUEHMO #2719/01 3071220
ZNY CCCCC ZZH
P 031220Z NOV 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5284
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0304
RUEHMU/AMEMBASSY MANAGUA PRIORITY 0215
RUEHQT/AMEMBASSY QUITO PRIORITY 0001
RUEHSI/AMEMBASSY TBILISI PRIORITY 3919

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002719

SIPDIS

E.O. 12958: DECL: 11/03/2019
TAGS: PREL PGOV RS EC
SUBJECT: GOR GIVES, GETS LITTLE FROM ECUADORIAN PRESIDENT

REF: A. MOSCOW 02330
B. MANAGUA 789

MOSCOW 00002719 00...

id: 232725
date: 11/3/2009 12:20
refid: 09MOSCOW2719
origin: Embassy Moscow
classification: CONFIDENTIAL
destination: 09MANAGUA789|09MOSCOW2330
header:
VZCZCXRO0793
PP RUEHDBU
DE RUEHMO #2719/01 3071220
ZNY CCCCC ZZH
P 031220Z NOV 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5284
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 0304
RUEHMU/AMEMBASSY MANAGUA PRIORITY 0215
RUEHQT/AMEMBASSY QUITO PRIORITY 0001
RUEHSI/AMEMBASSY TBILISI PRIORITY 3919

----------------- header ends ----------------

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002719

SIPDIS

E.O. 12958: DECL: 11/03/2019
TAGS: PREL PGOV RS EC
SUBJECT: GOR GIVES, GETS LITTLE FROM ECUADORIAN PRESIDENT

REF: A. MOSCOW 02330
B. MANAGUA 789

MOSCOW 00002719 001.2 OF 002

Classified By: Political Minister-Counselor Susan Elliott for reasons 1
.4 (b,d)

1. (C) Summary. During the October 27-29 visit to Moscow
of Ecuadorian President Rafael Correa, several bilateral
cooperation and trade agreements were signed, but the
meetings did not conclude with the GOR granting any
substantive arms deals, nor did President Correa recognize
the breakaway republics of South Ossetia or Abkhazia.
Ecuador purchased two helicopters, the two countries signed a
joint Declaration of Strategic Partnership, and the GOR
secured deals for Russian joint investment projects in
energy, nuclear power, and telecom development in Ecuador.
While President Correa left the door open to recognize the
two republics, he may likely be still holding out for a
better financial or military deal from the GOR which would
outweigh the possible negative consequences of recognition.
End summary.

----------------------
New Strategic Partners
----------------------

2. (U) In the first-ever visit of a President of Ecuador to
Moscow, President Rafael Correa Delgado along with the
Ecuador Minister of Foreign Affairs Fander Falkoni and
Minister of Defense Javier Ponce met on October 29 with
President Dmitriy Medvedev. President Correa also met with
Prime Minister Putin, Patriarch Kirill of the Russian
Orthodox Church, Moscow Mayor Yuriy Luzhkov, and Russian
business executives interested in investing in Ecuador.
President Correa and a delegation of Ecuadorian lawmakers
also met with Federation Council representative Sergey
Mironov, who announced a sister city agreement between
Vladivostok and Manta, Ecuador. After a more than 20-year
hiatus, the Russian-Ecuadorian Intergovernmental Commission
for Economic and Energy Issues convened on October 28,
chaired by Russian Agriculture Minister Elena Skrynnik and
Ecuadorian Minister of Economic Policy Diego Borja. Trade
between the countries was nearly $1 billion in 2008, with
Ecuador's main exports to Russia consisting of fruit and
flowers, and Russia mainly exporting iron materials and
fertilizer to Ecuador.

3. (U) After their meeting, President Medvedev and
President Correa signed a Declaration on the Strategic
Partnership, which contained several side agreements dealing
with economic, humanitarian, and political issues. According
to Interfax, the Russian Energy Ministry, the Ecuadorian
Ministry of Electricity and Renewable Energy, and the
Ecuadorian Minister of Mines and Petroleum signed a
Memorandum of Mutual Understanding. The GOR and Ecuador also
penned agreements on hydropower projects and the development
of telecom technologies in Ecuador. Rosatom also announced
an agreement on civil-nuclear cooperation, including possible
joint project in construction of nuclear power facilities and
uranium exploration in Ecuador.

--------------------------------------------
Investments Focused on Economy, not Military
--------------------------------------------

4. (U) Upon his departure from Russia on October 30,
President Correa announced that the GOR promised to invest
over $2.5 billion in Ecuador by 2014, which he noted would be
focused on transport, infrastructure, science and technology.
GOR Finance Minister Alexey Kudrin confirmed to press
sources that Ecuador had requested a loan from the GOR, but
noted that negotiations concerning the loan amount and terms
had not yet begun. The GOR has not yet acknowledged granting
any loan to President Correa.

5. (U) As part of his visit, President Correa finalized the
purchase of two MI-17 Hip multirole helicopters. President
Medvedev noted that while this was a small military contract,
it was "the beginning of (Russian-Ecuadorian) interaction in
this area," with good prospects for future relations. Before
the visit, independent business daily Vedomosti reported that
Russia was interested in supplying six Su-30MK2 Flanker
multirole fighters, several helicopters and air defense
systems to Ecuador, but the GOR has only confirmed the sale
of the two helicopters. The Russian Ambassador to Ecuador,
Yan Burlyai, told Echo Moskviy on October 29 that these
helicopters were replacements for older helicopters and that
this pact should not be considered as fueling an arms race in
the Latin American region.

MOSCOW 00002719 002.2 OF 002

-------------------------------
Ecuador to Consider Recognition
of South Ossetia and Abkhazia
-------------------------------

6. (U) Despite the flurry of media speculation that
President Correa planned to recognize South Ossetia and
Abkhazia during his trip, much like Venezuelan President
Chavez did on his visit to Moscow September 10 (ref A),
President Correa did not announce recognition. Instead, on
the day after his meeting with President Medvedev and hours
before he was to leave Moscow, President Correa said, "if
both regions officially ask Ecuador to recognize them, we
will seriously consider this request."

7. (U) South Ossetian "foreign minister" Murat Dzhioyev
told RIA Novosti on October 30 that South Ossetia would "of
course officially ask" Ecuador for recognition. Likewise,
Abkhazian "foreign minister" Sergey Shamba announced on
October 30 that Abkhazia would also shortly be sending
Ecuador their official request for recognition. Even before
President Correa's visit, leaders of the breakaway regions
were hopeful that Ecuador would follow Nicaragua and
Venezuela, with Dzhioyev telling Vedomosti that they had
strong hopes for recognition by Ecuador and Bolivia, and
deputy "foreign minister" of Abkhazia Maxim Gvindzhia
claiming that "the other Alliance for the People of Our
America (ALBA) countries will eventually recognize (the
republics) too." (Note: Nicaragua, Venezuela and Ecuador
are all members of ALBA. End note). Alexei Makarkin,
vice-president of the Center for Political Technologies, told
Interfax that recognizing the republics is a "purely anti-US
gesture, and...Ecuador has no reason to exacerbate its
relations with the U.S." by making such a recognition.

-------
Comment
-------

8. (C) The only other countries to recognize the breakaway
republics earned sizable military agreements and investment
packages from Russia. Venezuela was given $4.4 billion by
the GOR to establish a Russian-Venezuelan bank as well as
continued arms-for-credit deals of tanks and air defense
systems (ref A). Nicaragua, the first country after Russia
to recognize, gained more attention from Moscow as well as a
gift of 130 municipal buses (ref B). By comparison,
dividends from President Correa's trip to Moscow were modest,
and he is likely waiting for larger military or investment
offers from the GOR in exchange for becoming the next country
to recognize, a decision which likely would worsen Ecuador's
relations with the U.S. End comment.
Beyrle

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