US embassy cable - 05ASUNCION1046

C O N F I D E N T I A L SECTION 01 OF 03 ASUNCION 001046 
 
SIPDIS 
 
STATE FOR WHA/BSC 
 
E.O. 12958: DECL: 08/19/2015 
TAGS: PREL, MASS, MOPS, KCRM, PTER, PINR, SNAR, PA, KICC 
SUBJECT: PARAGUAY: SECDEF RUMSFELD AFFIRMS SUPPORT FOR 
STRENGTHENED COOPERATION 
 
Classified By: A/DCM James P. Merz for reasons 1.5 (b) and (d). 
 
1.   (C)  Summary.  On 8/16, SECDEF Rumsfeld met for 90 
minutes with President Duarte Frutos to discuss cooperation 
in the fight against international terrorism and 
transnational crime, challenges to democracy in Paraguay and 
the region, and the expansion of economic opportunity. 
SECDEF drew attention to destabilizing undemocratic elements 
in the region, Cuba and Venezuela in particular.  Duarte 
described the political scene in Paraguay focusing on his 
government's desire to generate economic growth and address 
public security challenges.   He appealed to the U.S. for 
more open markets and greater assistance in tackling 
transnational crime. 
 
2.  (C)   The SECDEF's meeting on 8/17 with Defense Minister 
Gonzalez centered on U.S.-Paraguay military cooperation and 
Paraguay's efforts to contribute troops to the UN's 
peacekeeping mission in Haiti.  SECDEF reminded Gonzalez, as 
he had in his meeting with Duarte Frutos, that GOP agreement 
to an Article 98 agreement would facilitate some forms of 
U.S. economic and military assistance. 
 
3.  (U)  A group of some 50 protesters assembled to protest 
the SECDEF's visit but in no way marred the overall positive 
tone coming out of the visit.  End Summary. 
 
4.   (U)  On 8/16, SECDEF Rumsfeld accompanied by the 
Ambassador, James G. Stavridis -- Senior Military Assistant; 
Peter W. Rodman --  Assistant Secretary of Defense; Roger 
Pardo-Maurer -- Deputy Assistance Secretary of Defense for 
Western Hemisphere Affairs; A/DCM Merz; and DATT Dennis 
Fiemeyer met with Duarte Frutos who was accompanied by VP 
Luis Castiglioni, FM Leila Rachid, MOD Roberto Gonzalez, 
Minister of Public Works Jose Alberto Alderete, Director of 
Protocol Amb. Enrique Ramirez, Private Secretary Carlos 
Santacruz, Armed Forces Commander Gen. Jose Kanasawa, and 
Armed Forces Chief of Staff Gen. Caces.  The meeting was 
conducted in the President's personal residence, a privilege 
the President rarely bestows upon foreign visitors. 
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SECDEF Stresses Cooperation and Support 
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5.  (C)  SECDEF conveyed support for Duarte's efforts to 
combat corruption and transnational crime, including money 
laundering and drug trafficking.  The U.S. shared his 
commitment to democratic reforms.  U.S.-Paraguayan military 
cooperation was beneficial to both sides.   SECDEF was 
pleased to learn a recent medical humanitarian exercise 
(MEDRETE) had provided medical treatment to over 12,000 
Paraguayans in the countryside.  No country could solve its 
problems alone.  The U.S. supports Duarte's efforts to tackle 
its problems and as a friend was looking for ways to provide 
assistance. 
 
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Duarte Describes Historic Mission and Appeals for U.S. Help 
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6.  (C)  Duarte described his efforts to reform Paraguay as 
historic.  He represented the first President legitimately 
elected since Stroessner's overthrow with no ties to the 
exiled dictator.  When he took office, the economy was in 
recession, inflation was rampant, and Paraguay was in default 
on  international loans.  Two years later, he boasted, 
Paraguay had experienced two successive years of growth, 
however modest, inflation was in check, Paraguay enjoyed a 
fiscal surplus thanks to a significant increase in 
tax/customs collections, and the country had won high marks 
from the international banking community. 
 
7.  (C)  Notwithstanding his government's achievements, his 
administration found itself under constant assault by the 
press for not producing noteworthy progress on the poverty 
and public safety front.   He complained frustration with 
economic conditions and a peculiar nostalgia for the past 
that prompts people to forget its more unsavory aspects had 
produced significant popular support for the former 
dictator's grandson, Goli Stroessner, who is running against 
Duarte's supporters in next year's internal Colorado Party 
election for senior leadership positions.   At the other end 
of the political spectrum, Duarte averred, the country's 
leftists remained unable to attract popular support for their 
agenda in large measure because they didn't speak the same 
language both literally (most Paraguayans in the countryside 
speak Guarani as their first language whereas many of the 
leading leftist politicians come from Asuncion and struggle 
with Guarani) and politically (the Colorado Party has long 
political ties with the countryside that are difficult to 
overcome).  Other challenges to progress and democracy, 
Duarte stressed, were weak state institutions, impunity, and 
corruption, as well as weak civil society. 
 
8.  (C)  Duarte assured SECDEF that Paraguay was committed to 
fighting international terrorism and transnational crime 
including narcotrafficking, piracy, and money laundering. 
These problems obstructed his government's overarching aim to 
generate economic growth to reduce poverty levels and address 
concerns about public security.  He appealed repeatedly for 
U.S. assistance to help generate growth and tackle 
transnational crime.  He appreciated recent increases in the 
U.S. import quota for organic sugar from Paraguay and 
appealed to the U.S. to open its markets to other Paraguayan 
exports such as meat and apparel. Paraguay had accomplished 
much in fighting narcotrafficking and piracy on meager 
resources.  GOP efforts to combat illicit activity, however, 
would benefit significantly from U.S. assistance in the form 
of equipment, including radars. 
 
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Military Cooperation, PKO Missions, and Article 98 
--------------------------------------------- ----- 
 
9.  (C)  Duarte  welcomed military cooperation particularly 
inasmuch as it delivered concrete health benefits to poor 
Paraguayans and was characterized by respect for Paraguayan 
sovereignty.  SecDef and Duarte also agreed on the value of 
expanded Paraguayan  participation in PKO missions.  Duarte 
noted that Paraguay was willing, but lacks resources, which 
led to a plea for greater US assistance to help outfit the 
Paraguayan armed forces for a number of its missions (CD, 
PKO, etc.).  SecDef asked the question (rhetorically): 
"Wouldn't reaching an Article 98 agreement facilitate our 
ability to help with that?"  There were some nervous fidgets 
on the Paraguayan side of the table, and while Duarte 
deliberately remained mute, the FM replied that she did not 
think so.  Nevertheless, the point was made and it stuck. 
 
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Addressing Regional Threats to Democracy 
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10.  (C)  Affirming U.S. respect for Paraguay's sovereignty 
and its right to choose its own path of development, SECDEF 
conveyed U.S. concern about the emergence of strong leaders 
who seek to export problems and sow instability in the 
region.  In this regard, the U.S. was particularly concerned 
about Cuban and Venezuelan efforts to export an ideology that 
harms democracy.  The expansion of opportunity and fighting 
corruption were the best to shore up democracy, foster 
stability, and attract investment. 
 
11.  (C)  Duarte offered a mixed message in response.  He 
stressed, again, the importance of economic growth, 
development, cooperation and assistance.  Poverty and despair 
represent the greatest threats to democracy in the region as 
they create opportunities for the likes of a "Chavez, 
Morales, or another Stroessner" to emerge and galvanize 
support.  Paraguay currently had a relationship with both 
Cuba and Venezuela that redounded to its benefit 
economically.  Over 600 Paraguayan students were studying 
medicine in Cuba.  As in the U.S., Paraguay's foreign policy 
responded, in large measure, to domestic interests and 
Paraguay was hard pressed to reject this kind of valued 
assistance.  Paraguay was, on the other hand, looking at 
putting an end to the Cuban program that involves dispatching 
Cuban doctors out to the Paraguayan countryside out of 
concern over the "problems" it generates. 
 
12.  (C)  Venezuela was another story.  It aimed to build a 
model for power in the region based on providing significant 
aid.  The Paraguayan Government  received assistance from 
Venezuela in excess of USD 10 million in fuel subsidies which 
Duarte contended dwarfed U.S. assistance.   (Note: U.S. 
assistance to Paraguay in the form of AID programs, INL 
funds, Peace Corps volunteers, and military programs far 
exceeds USD 10 million but a fraction of that goes to the 
GOP, the source of Duarte's frustration.  End Note.) 
 
13.  (C)  Duarte signaled that he would prefer Paraguayan 
youth obtain an education in the U.S. and that if such 
scholarships were forthcoming he might consider ending the 
Cuban program.  He recalled U.S. aid programs delivered in 
his youth in the context of the Alliance for Progress that 
produced tangible benefits upon his generation.  The end of 
the Cold War, he lamented, however, had lead to significant 
reductions in this kind of assistance.  He recalled his 
appeal to President Bush for more scholarships.  In the 
absence of the U.S. providing this kind of assistance, he had 
to respond to domestic interests as a realist recognizing the 
strong support the Cuban medical scholarship program enjoyed. 
 
 
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SECDEF-MOD Focus on UN PKO Mission in Haiti 
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14.  (C)  On August 17, SECDEF met with Minister of Defense 
Gonzalez in a half-hour meeting that focused on Paraguay's 
participation in peacekeeping missions.  Gonzalez conveyed 
appreciation for U.S. military cooperation particularly in 
the form of U.S. MEDRETES, stressing Paraguay's commitment to 
combating narcotraffickers as evidenced by the recent arrest 
and extradition of Mendes Mesquita.  He also conveyed 
Paraguay's eagerness to participate in the UN PKO in Haiti, 
noting its lack of resources proved the only obstacle. 
Ambembassy ODC officials advised the SECDEF that they were 
exploring avenues for possible U.S. assistance.  SECDEF 
reminded MOD that the GOP's decision to sign an Article 98 
agreement would facilitate delivery of U.S. defense 
assistance.  The MOD tacitly acknowledged the SECDEF's 
message.  He alluded discreetly to MFA efforts to address 
this issue but appealed to the U.S. to consider ways to 
overcome this obstacle. 
 
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Protesters Loud but Few 
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15.  (U)  Approximately 50 protesters staged a small but loud 
protest across the street from a SECDEF wreath laying 
ceremony at a national military memorial.  Almost an equal 
number of riot police cordoned off the protesters from the 
SECDEF's delegation.  The protesters composed largely of 
students armed with megaphones chanted insults and hoisted 
signs condemning the SECDEF visit to Paraguay.  Proceedings 
went forward at the site as planned, however, and no other 
protests occurred during the visit. 
 
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Meeting Atmospherics 
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16.  (C)  Notwithstanding criticism in the press over the 
visit, Duarte was visibly pleased and invigorated during his 
meeting with the SECDEF.  While on occasion he lapsed into 
speechifying in describing his achievements and appealing for 
assistance, the exchange was marked by frequent displays of 
humor on the part of both principals. 
 
17.  (C)  Comment.  SECDEF's aim to strengthen the U.S. 
relationship with Paraguay and convey support was clearly 
achieved.  While Duarte devoted much attention to the forms 
of concrete assistance Paraguay seeks to derive from the 
relationship, he also recommitted Paraguay to strengthened 
cooperation with the U.S. in the consolidation of democracy, 
the fight against terrorism and transnational crime, and the 
expansion of economic opportunity.  We look forward to 
building on the good will produced by this visit in our 
mission's objectives in these areas.  End Comment. 
 
18.  (U)  SECDEF did not have an opportunity to clear on this 
message.  We understand SECDEF will be producing its own 
report on this visit. 
KEANE