US embassy cable - 05QUITO553

UNCLAS SECTION 01 OF 02 QUITO 000553 
 
SIPDIS 
 
DEPT FOR LAC/SPO, STATE DESK, LAC/SA, G/HPN, LAC/AA, WHA 
 
E.O. 12958: N/A 
TAGS: EAID, EC, ECON, EFIS, ETRD, PGOV, PREL, SENV 
SUBJECT: MARCH 4 VISIT TO ECUADOR OF ADOLFO FRANCO, AA/LAC 
AND MARGARITA GUERRRA, AA/LAC SPECIAL ASSISTANT 
 
 
1. SUMMARY: ADOLFO FRANCO, USAID ASSISTANT ADMINISTRATOR 
FOR LATIN AMERICA AND THE CARIBBEAN, AND MARGARITA GUERRA, 
SPECIAL ASSISTANT, VISITED QUITO ON MARCH 4 TO MEET WITH 
U.S. MISSION MANAGEMENT TO DISCUSS LAC PRIORITIES AND 
USAIDS PROGRAM IN ECUADOR.  HIS VISIT INCLUDED EVENTS 
WITH PARTNERS, MEETINGS WITH SENIOR MISSION STAFF, AND A 
RADIO INTERVIEW.  MR. FRANCO AND AMBASSADOR KENNEY WERE 
PLEASED WITH THE OUTCOME OF HIS VISIT AND LAUDED 
USAID/ECUADOR FOR ITS EXCELLENT MANAGEMENT OF THE PROGRAM 
IN THESE CHALLENGING TIMES. END SUMMARY 
 
2. THE DAYS EVENTS INCLUDED IN-DEPTH BRIEFINGS BY SENIOR 
R 
MISSION STAFF OF NEAR TERM ISSUES AFFECTING PROGRAM 
HORIZONS.  THESE INCLUDED HEARING ABOUT POSSIBLE 
CONSEQUENCES AND IMPLEMENTATION OF NETHERCUTT AMENDMENT IN 
FY05, POTENTIAL TRAFFICKING IN PERSONS SANCTIONS IN FY06, 
FULFILLMENT OF FUNDING OF THE SOUTHERN BORDER PROGRAM, 
RECENTLY ANNOUNCED OE AND ACI BUDGET REDUCTIONS AS WELL AS 
FSN RETIREMENT CONCERNS.  THE BALANCE OF THE DISCUSSIONS 
FOCUSED ON SITUATION UPDATES IN THE GALAPAGOS AND GROWING 
CONCERNS ON THREATS TO POLITICAL STABILITY IN ECUADOR. 
THROUGH THE COURSE OF THE DAY, AMBASSADOR KENNEY AND 
COUNTRY TEAM SECTION CHIEFS EMPHASIZED THE EXCELLENT 
COORDINATION AND INTEGRATION OF USAID ACTIVITIES WITH THE 
REST OF THE COUNTRY TEAM. 
 
3. U.S. MISSION OUTLINED ITS MAJOR TOPICS OF CONCERN 
AFFECTING ITS DEVELOPMENT AGENDA.  OUR MESSAGE CONTINUES 
TO BE SUPPORT FOR ECUADORS DEMOCRACY.  WE FOCUS ON 
INSTITUTIONS, DEMOCRATIC VALUES AND PROCESSES NOT 
PERSONS.  MISSION ALSO COMMENTED ON ITS CONCERN ABOUT THE 
INDEPENDENCE OF THE SUPREME COURT. A THOROUGH DISCUSSION 
ENSUED ON ARTICLE 98.  MR. FRANCO STRESSED THE IMPORTANCE 
OF SPEAKING WITH A SINGLE USG VOICE ON ALL FOREIGN POLICY 
PRIORITY AREAS.   HE NOTED THAT NETHERCUTT SANCTIONS COULD 
DIMINISH THE EFFECTIVENESS OF OUR EFFORTS, BUT IT IS CLEAR 
THE USG POSITION CONTINUES TO BE THAT THE GOE SHOULD SIGN 
ARTICLE 98. THE MISSION PROVIDED AN OUTLINE OF ITS 
PROPOSED APPROACH FOR FY05 WHEREIN ESF WOULD BE DISBURSED 
THROUGH OUR CURRENT AGREEMENTS AND CONTRACTS, TO THE 
BENEFIT OF THE PRIVATE SECTOR, CIVIL SOCIETY ORGANIZATIONS 
AND THE GENERAL POPULATION. 
 
4. CONCERNING ONE WAY FREE TRADE AGREEMENT DISCUSSIONS, 
NEGOTIATION ROUNDS HAVE SHOWN PROGRESS.  WHILE NEARING THE 
FINAL ROUNDS,THE ECUADORIAN AND USG TEAMS ARE GETTING DOWN 
TO THE THORNIER ISSUES (INCLUDING LABOR, AGRICULTURE, AND 
ENVIRONMENT ETC.) 
 
5. MR. FRANCO, THE AMBASSADOR AND THE ACTING AID DIRECTOR 
PARTICIPATED IN THE DELIVERY OF MICRO-CREDIT LOANS TO 
TWENTY WOMEN-OWNED MICRO-ENTERPRISES IN QUITO BY FINCA, A 
REGULATED FINANCE COMPANY THAT WAS FORMERLY FINANCED BY 
USAID.  THE BENEFICIARIES GAVE STRONG TESTIMONIALS ON THE 
BENEFITS OF THE LOANS AND EXCELLENT VIDEO FOOTAGE WAS 
CAPTURED OF THE EVENT. FRANCOS VISIT DEMONSTRATED THE 
DESIRE AND THE INTEREST OF THE USG TO CONTINUE COOPERATING 
WITH THE ECONOMIC AND SOCIAL DEVELOPMENT OF THE COUNTRY. 
IN ADDITION, USAID/ECUADOR WILL ASSESS THE OPTION OF 
PROVIDING A DCA TO GUARANTEE THE ISSUANCE OF BONDS IN THE 
CAPITAL MARKET TO SUPPORT FINCAS EXPANSION. 
 
6. FOLLOWING AN INVITATION FROM MR. FRANCO TO ECUADOR, 
AIDS RESPONSIBILITY PROJECT (ARP) REPRESENTATIVES RICH 
TAFEL AND MICHAEL ARONOWITZ SUMMARIZED A HIGHLY SUCCESSFUL 
PROGRAM THAT ARP HAS IN MEXICO.  PARTICULAR SUCCESSES IN 
ENGAGING UNITED STATES AND MEXICAN CORPORATIONS IN 
DEVELOPING AND IMPLEMENTING HIV/AIDS HIRING AND EMPLOYMENT 
POLICIES WERE HIGHLIGHTED.  THE AMBASSADOR AND MR. FRANCO 
ENDORSED THE IDEA OF TAKING A GRADUAL APPROACH OF ARP 
P 
ENGAGING PRIVATE SECTOR, NGOS AND THE GOE.  THE U.S. 
MISSIONS FOREIGN COMMERCIAL SERVICE IS TO ARRANGE 
MEETINGS WITH THE GUAYAQUIL AND QUITO CHAMBERS OF COMMERCE 
AS A STARTING POINT.  FOLLOWING ASSESSMENT/INTERVIEWS, A 
POSSIBLE PROGRAM MAY BE DEVELOPED TO INITIATE AN HIV/AIDS 
AWARENESS/EMPLOYMENT POLICY ACTIVITY TOGETHER WITH LOCAL 
BUSINESSES.  AA/LAC AGREED HE WOULD EXPLORE OTHER LAC 
BUREAU RESOURCES TO FUND SUCH AN INITIATIVE.  MISSION WILL 
COORDINATE FOLLOW ON WITH USAID/MEXICO AND FUTURES GROUP 
PROGRAM TO LEARN MORE ABOUT COORDINATING FUTURE ACTIVITY. 
 
7. MR. FRANCO WAS INTERVIEWED BY RADIO QUITO ON USAID 
ASSISTANCE TO LATIN AMERICA. HE WAS OPTIMISTIC ABOUT THE 
SITUATION IN LAC AND PUBLICLY NOTED THAT ALL BUT ONE 
COUNTRY IN LAC HAVE A FREELY ELECTED GOVERNMENT - CUBA 
BEING THE EXCEPTION. MR. FRANCO REITERATED THE USG 
CONCERNS FOR THE GOVERNANCE SITUATION IN ECUADOR, BUT SAID 
HE IS OPTIMISTIC THAT THE GOE, CIVIL SOCIETY AND PEOPLE 
WILL FIND A SOLUTION. AT THE SAME TIME HE CLARIFIED THE 
USG SUPPORTS DEMOCRACY, NOT DICTATORS. 
 
8. AT THE TOWN HALL MEETING WITH USAID STAFF AMBASSADOR 
KENNEY AND DCM CHACON THANKED MR. FRANCO FOR HIS VISIT AND 
PRAISED AGAIN THE MISSIONS OUTSTANDING WORK, PARTICULARLY 
ON FTA, GALAPAGOS AND NORTHERN BORDER.  RESPONDING TO A 
CONCERN RAISED, MR. FRANCO INVITED THE MISSION TO CLEARLY 
DEFINE THE STATUS AND EXTENT OF THE ISSUE AFFECTING FSN 
RETIREMENT BENEFITS.  ACTING AID DIRECTOR CONFIRMED HE 
WOULD COMMUNICATE THIS CONCERN DIRECTLY TO MR. FRANCO 
UNDER SEPARATE COVER. MR. FRANCO SAID HE WOULD RAISE THIS 
ISSUE WITH DEPUTY ADMINISTRATOR SCHIECK AS PART OF AN 
INTER-AGENCY POLICY GROUP MEETING THIS COMING WEEK. 
 
9. THE DAYS EVENTS CONCLUDED WITH A WIDELY ATTENDED 
RECEPTION IN HONOR OF MR. FRANCO.  APPROXIMATELY 75 
ECUADORIAN OFFICIALS, BUSINESS AND CIVIL SOCIETY LEADERS, 
PRESS LEADERS, IMPLEMENTING USAID ORGANIZATION LEADERS, 
AND U.S. MISSION OFFICERS WERE PRESENT. THE EVENT WAS SEEN 
AS A HUGE SUCCESS AND ENABLED CONTACTS BETWEEN PRIVATE 
E 
SECTOR AND PUBLIC SECTOR ON A NUMBER OF KEY THEMES THE 
MISSION IS WORKING. 
 
 COMMENT: 
 
10. MR. FRANCOS VISIT COMES AT A TIME OF ECUADCORIAN 
POLITICAL UNCERTAINTY AND A RECENT CHANGE IN USAID MISSION 
MANAGEMENT.  HIS VISIT RAISED MISSION MORALE, BROADENED 
AWARENESS OF USG POSITION ON KEY ISSUES AND FOSTERED 
PRODUCTIVE DIALOGUE ON CONCERNS IMMEDIATELY FACING THE 
MISSION. KENNEY