US embassy cable - 05ASUNCION1272

UNCLAS SECTION 01 OF 02 ASUNCION 001272 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR LYANG 
NSC FOR SUE CRONIN 
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, ECON, SNAR, KDEM, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, OCT. 01 - 
OCT. 09 
 
1.(U) Summary 
    -- Ambassador Keane Received Honors 
    -- Paraguay Ranks 7th in Democratic Development 
    -- Taiwan Donates $3 Million to Paraguay 
    -- Judicial Administrator Removed Under Charges of 
Corruption 
 
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Ambassador Keane Received Honors 
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2.(U) On 10/3, Vice President Luis Castiglioni decorated the 
Ambassador with the National Anti-Drug Secretariat (SENAD) 
Meritorious Recognition Medal.  Castiglioni described the 
Ambassador as a friend and an ally in the struggle against 
drug trafficking.  Paraguay remained steadfast in its 
commitment to fight drugs because it was "morally" the right 
thing to do but thanked the U.S. for its cooperation and 
support in this fight.  On 10/4 the Ambassador  received a 
national recognition of Merit of Gran Cruz from the 
Government of Paraguay.  Foreign Minister Leila Rachid hosted 
the ceremony and thanked the Ambassador for the significant 
contribution he had made to strengthen U.S.-Paraguayan 
relations. In his remarks, the Ambassador affirmed that the 
"U.S. wants for Paraguay to be successful in its efforts to 
implement fundamental reforms that will create a strong 
foundation and will demonstrate that the road of responsible 
democracy produces positive results". 
 
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Paraguay,s Ranked 7th in Democratic Development 
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3.(U) According to the Index of Democratic Development in 
Latin America (IDD-Lat), produced annually by the Konrad 
Adenauer Foundation, Paraguay's democratic credentials have 
improved significantly over recent years.  According to the 
index, Paraguay ranked seventh and performed better than 
other countries in the region including Argentina, Brazil, 
Columbia and Venezuela.  Parting from a low score in 2002, 
Paraguay's current ranking places it around mid-range among 
all the countries surveyed in the region. 
 
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Taiwan Donates $3 Million to Paraguay 
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4.(U) On 10/5, President Duarte received USD 3 million in 
donations from the Taiwanese government through their 
representative, Ambassador David Hu, in Asuncion.  According 
to reports, the money is part of a series of donations the 
Taiwanese government has made to Paraguay in the past, and 
will continue to donate as part of a promise made by the 
Taiwanese government which will total USD 29 million over the 
next three years (ending 2007).  The funds will be used for 
construction of 1,200 homes that will be donated to low 
income families.  President Duarte remarked that Taiwan's 
donation is a reflection of the confidence the Taiwanese 
government has in his administration. Ambassador Hu took the 
opportunity to thank President Duarte for supporting Taiwan 
at the UN General Assembly including its petition for 
international recognition as an independent country.  Press 
reports suggested the funds were tantamount to compensation 
for Paraguay's position on Taiwan before the UN but the MFA's 
Director of Bilateral Affairs and former Ambassador to 
Taiwan, Ceferino Valdez, denied that was the case. 
 
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Judicial Administrator Removed Under Charges of Corruption 
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5.(U) On 10/5, it was reported that Luis Insua Ego, General 
Director of Administration and Finance of the Judicial 
Branch, was dismissed for corruption.  According to the 
reports, Insue made several direct contracts with private 
companies without going through the bidding process 
established by the courts. The courts will submit all of the 
evidence to the Public Ministry to initiate a criminal 
investigation against Insua. 
KEANE