US embassy cable - 05ASUNCION844

UNCLAS ASUNCION 000844 
 
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, EFIN, MASS, SNAR 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 
25-JULY 1 
 
1. (U) Summary 
--------------- 
-- Protest on behalf of Former Army General 
-- Drug Busts Give Hope 
-- Senate Grants Entry of US Troops 
-- Peasants Killed in Land Dispute 
-- Revival of Privatization Law Halted 
 
Protest on behalf of Former Army General 
---------------------------------------- 
2.  (U) Thousands of protesters rallied on June 28 in support 
of former Paraguayan Army General Lino Oviedo. The protest 
marked the first anniversary of Oviedo's return to Paraguay 
after five years in Brazil.  Oviedo is serving a 10-year 
prison sentence for a conviction on charges of leading an 
attempted coup in 1996.  The demonstrators, organized by the 
National Union of Ethical Citizens (UNACE), were demanding 
Oviedo,s release from prison and urging authorities to drop 
their investigation of Oviedo's alleged role in the 1999 
assassination of former Vice President Luis Argana. 
 
Drug Busts Offer Hope 
--------------------- 
3.  (U) The National Anti-drug Secretariat (SENAD) had three 
separate seizures at check-points last week. INL-funded dogs 
from the SENAD Canine Unit successfully uncovered 726 grams 
of cocaine in the city of Mariscal Estigarribia, and a total 
of 55,840 kilograms of marihuana in two unconnected seizures 
in Ciudad del Este. SENAD agents arrested four individuals. 
 
Senate Grants Entry of US Troops 
-------------------------------- 
4.  (U) On June 28, the Senate granted permission for 13 US 
military units to enter Paraguay for joint military exercises 
from July 2005 until September 2006. The motion passed with 
27 votes in favor, six against, and two abstentions. This is 
the first time the Senate passed multiple permissions to 
enter; they were previously done individually. Embassy sought 
immunities and entry permission (separate steps) for 13 
exercises over 18 months to limit the possibility of a new, 
leftist Senate leader blocking them. Several Senators argued 
for a clause affirming Paraguay would honor its obligations 
to the Rome Treaty in connection to immunities for U.S. 
participants. In comments to the press, FM Rachid said that 
the MFA is prepared to consider developing language that 
addresses Congressional sensitivities on this issue in future. 
 
Peasants Killed in Land Dispute 
------------------------------- 
5.  (U) On June 24, on orders of a local prosecutor, police 
evicted and arrested a number of peasants from a property 
claimed by Brazilian settler Ademar Aloisio Lotterman in 
Tekojoja, Caaguazu Department. When Lotterman returned to the 
property accompanied by several workers, a confrontation with 
peasants still in the vicinity ensued resulting in the 
shooting death of two peasants. There are conflicting claims 
to the land and versions of events. Lotterman and several of 
his employees have been arrested on murder charges as part of 
the investigation underway. The VP alleges that the lands 
were illegally transferred to the Brazilian settlers. 
 
Revival of Privatization Law Halted 
----------------------------------- 
6.  (U) On June 30, the Chamber of Deputies unanimously 
rejected a bill passed in May by the Senate that would have 
reactivated a 2002 privatization law.  The renewed prospect 
of privatization generated a wave of protests by campesino 
groups and unions.  President Duarte announced that he was 
against the law.  An opposition deputy, whose party had 
supported the law in the Senate, said his party,s deputies 
would oppose it based on their belief that the process would 
be manipulated for the purposes of illicit enrichment. 
Reform of the state-owned enterprises may go forward, 
however.  President Duarte has said he favors reform of the 
enterprises to increase their efficiency, quite possibly with 
as yet undefined private sector participation, and there is 
speculation in the press that a revised law will be 
introduced in the near future. 
KEANE