A/DCM VISIT TO SANTA CRUZ

Código Fecha Clasificación Origen
09LAPAZ271 19 February 2009 Solo uso oficial Embassy La Paz

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DE RUEHLP #0271/01 0501456
ZNR UUUUU ZZH
R 191456Z FEB 09
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 0034
INFO RUEHBR/AMEMBASSY BRASILIA 0159
RUEHSO/AMCONSUL SAO PAULO 2363
RUEHBU/AMEMBASSY BUENOS AIRES 7380
RUEHMN/AMEMBASSY MONTEVIDEO 6154
RUEHAC/AMEMBASSY ASUNCION 8819
RUEHCV/AMEMBASSY CARACAS 4427
RUEHPE/AMEMBASSY LIMA 4760
RUEHSG/AMEMBASSY SANTIAGO 1808
RUEHQT/AMEMBASSY QUITO 7044
RUEHBO/AMEMBASSY BOGOTA 6196
RUEHCP/AMEMBASSY COPENHAGEN 0388
RUEKJCS/SECDEF WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHEFDIA/DIA WASHDC

UNCLAS LA PAZ 000271

SENSITIVE
SIPDIS

PASS TO USAID

E.O. 12958: N/A
TAGS: PGOV, ECON, KPAO, EAID, SNAR, BL
SUBJECT: A/DCM VISIT TO SANTA CRUZ

1. (U) During a February 12-13 visit to Santa Cruz, Acting DCM:
— escorted two youth from the Yungas region of La Paz, who won
scholarships from the Narcotics Affairs Section (NAS), to the
Tahuichi soccer academy;
— announced English scholarships for 50 disadvantaged high school
students to study at the Santa Cruz Binational Center;
— hosted dinner for four leaders of the Santa Cruz Chamber of
Commerce, Industry, Services and Tourism;
— met with leaders of the hydrocarbons sector;
— visited the NAS-supported Special Unit for Victims of sexual
crimes and trafficking in persons;
— toured the International Tourism Fair and participated in the
working lunch hosted by the Embassy’s Commercial Section and the
Visit USA Committee, which included a speaker from International
Tourism Marketing, Inc. based in Colorado, and featured a film about
the USAID "Cup of Excellence" coffee project;
— donated furniture to a home for children undergoing cancer
treatment, a USAID Special Development Activity Fund (SDAF) project;
and
— presented awards to NAS employees at their regional office.

2. (SBU) The public events received extensive coverage in the print
media, and served as an important reminder to residents in Santa
Cruz that the U.S. continues to be present in the region delivering
aid, combating narcotrafficking, supporting education and culture,
and working to improve economic conditions and trade opportunities.
Since the highly-publicized September 2008 expulsion of the U.S.
Ambassador, there is a perception among some that the U.S. embassy
is no longer actively engaged in Bolivia. Our high-profile outreach
trips help counter that misperception.

Economic News


3. (SBU) Although most Crucenos are presently thinking more about
the upcoming Carnival holiday than the serious political and
economic issues facing Bolivia, business leaders were both
optimistic and pessimistic in their assessments. Hydrocarbons
industry experts addressed the corruption scandal in the Bolivian
hydrocarbons distribution company (YPFB), saying that despite a lot
of changes at the top levels of YPFB since the Morales government
took office, the working levels of the company are maintaining some
consistency with the nationalization agenda. Nonetheless, YPFB’s
lack of ability to plan, a slowness to respond to industry requests
and permits, a lack of fuel storage capacity in Bolivia, and the
government’s lack of will to enforce laws against contraband,
results in continuous seasonal fuel shortages. Politicians have
only the most basic understanding of the sector. The executives
expressed satisfaction with YPFB’s higher budget for investments in
oil and gas fields for the coming year, but lamented that there had
not been enough investment in pipelines and other transportation
infrastructure. They said Russian hydrocarbons representatives
visit Bolivia every few years, but have never made any significant
investment, and they did not expect the recent Gazprom visit to
Bolivia or Morales’s visit to Russia to amount to much (septel).

4. (SBU) A real concern in Santa Cruz is the Morales government’s
threat to nationalize cooperatives that provide basic services such
as water, sewage, and electricity to neighborhoods and communities.
The Crucenos are proud of their cooperatives and see them as an
important part of regional identity. They often say, "Everything we
have, we built ourselves, because the central government has always
ignored our needs." The telecommunications cooperative, COTAS, is
very worried about nationalization. COTAS has 150,000 shareholders
and is valued at USD 200 million. Directors say they frequently get
calls from low-level officials in the communications superintendancy
asking for bribes to prevent nationalization, but they have refused
to pay as they know that there is little that can be done if
President Morales decides to nationalize the company.

5. (SBU) Other business leaders criticized the current government’s
economic policies and short-sightedness, for example Morales vetoing
of a private deal with a Brazilian company to develop biofuels.
They are concerned about many aspects of the new constitution, but
are especially interested in fielding a candidate that can stand up
to President Morales in upcoming presidential elections scheduled
for December 2009. Several leaders were impressed by a recent visit
to Santa Cruz by Victor Hugo Cardenas, and liked his message, but
admit it will be hard to unify the opposition to Morales.

URS