US embassy cable - 05ASUNCION484

UNCLAS SECTION 01 OF 02 ASUNCION 000484 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR SCRONIN AND LYANG 
NSC FOR KIM BREIER 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, PBTS, SCUL, TINT, PINR, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, APRIL 2-7 
 
1. Summary: 
----------- 
--Paraguay and Brazil sign agreement to quell border control 
dispute 
--New poll shows deterioration in Duarte's image 
--Controversy over Duarte's decision not to attend Papal 
funeral 
--Government-owned phone company introduces wholesale 
Internet service 
 
Paraguay and Brazil sign agreement to quell border control 
dispute 
--------------------------------------------- - 
2. On April 16, FM Rachid signed an agreement with Brazilian 
Ambassador Valter Pecly Moreira to increase the amount of 
purchases made by Brazilian tourists in Ciudad del Este from 
USD150 to USD300.  The GOP had originally asked to raise the 
figure to USD500.  Other key points in the agreement call for 
strict control of the Friendship Bridge (connecting Paraguay 
and Brazil) to eliminate contraband and third-party sales, 
Paraguayan issuance of legal receipts for purchases over the 
USD300 limit, infrastructure improvements to immigrations and 
customs controls on both side of the bridge, and for a ban of 
merchandise transit from Paraguay to Brazil after 1900 hours. 
 
New poll shows deterioration in Duarte's image 
--------------------------------------------- - 
3. A poll by the Opinion Studies Group (GEO), commissioned by 
the daily La Nacion, released on April 3 claims that 
President Duarte's popularity has declined rapidly over the 
past six months.  Only 11.9% of respondents rated the 
president's performance as "good," 36.9% rated it as "bad" or 
"very bad," and another 48.6% rated it "regular," which can 
carry from neutral to mildly pejorative connotations in 
Paraguay.  Duarte rejected the poll's results, producing an 
alternative poll from a rival firm showing a 58% approval 
rating.  Duarte's popularity has been under pressure for the 
last several months, especially in the wake of the GOP's 
inability to solve the Cecilia Cubas kidnapping before her 
murder.  However, both polls raise methodological concerns. 
The government's poll did not come with data on how 
respondents were surveyed, and the GEO poll only surveyed 
registered voters in Asuncion and the immediate surrounding 
area. 
 
Controversy over Duarte's decision not to attend Papal funeral 
--------------------------------------------- - 
4. On April 5, President Duarte's office announced that 
Vice-President Luis Castiglioni would head the official 
Paraguayan delegation to the funeral of Pope John Paul II. 
The announcement aroused opposition in the press and among 
the Congressional opposition, who said it was inappropriate 
for the President of one of the world's most heavily Catholic 
countries not to attend personally.  (Within the Southern 
Cone, only Brazil and Bolivia will be represented by heads of 
state.  The Argentine, Chilean, and Uruguayan presidents are 
sending either vice-presidents or cabinet ministers as 
representatives.)  Several journalists highlighted their 
disappointment by pointing out that John Paul had received 
Duarte enthusiastically at the Vatican last October. 
Duarte's relations with the Catholic Church have been uneven 
during his nearly two years in office, with reports of 
tension between the president and the hierarchy arising from 
Duarte's attendance at an evangelical Mennonite church. 
Conversely, Castiglioni is reportedly a devout Roman Catholic. 
 
Government-owned phone company introduces wholesale Internet 
service 
--------------------------------------------- - 
5. The Paraguayan Communications Company (COPACO), the 
state-owned telephone provider, announced that during the 
first half of April it will begin selling wholesale Internet 
access to Paraguayan service providers (ISP).  COPACO, which 
over the last few years has been hostile to the growth of the 
Internet in Paraguay, signed an agreement with Telefonica of 
Argentina, and will route its traffic through Buenos Aires to 
the U.S. Internet backbone in Miami via undersea cable. 
Presently, Paraguayan ISPs can only connect to the global 
Internet backbone by satellite, making Internet access fees 
here among the highest in Latin America. 
KEANE