US embassy cable - 05ASUNCION1355

UNCLAS SECTION 01 OF 02 ASUNCION 001355 
 
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, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, OCT. 23 - 
OCT. 29 
 
1.(U) Summary 
 -- Brazil's Agenda in Paraguay 
 -- German Ambassador Responds to Duarte's Dig 
 -- Ambassdor Working Up Until Departure 
 -- Wichita Mayor Visits Paraguay 
 -- Colorado Party Holds Convention 
 -- FBI Director Visits Paraguay 
 -- Dominguez Runs For ANR President 
 
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Brazil,s Agenda in Paraguay 
--------------------------- 
 
2. (U) On 10/23, Brazilian Ambassador Valter Pecly Moreira, 
met with a local newspaper to discuss Brazil,s agenda in 
Paraguay. Brazil is focused on integration between the two 
states and seeks the peaceful solutions to controversies; it 
would have to create programs with Paraguay to simplify 
customs with integrated control and to facilitate commerce 
and the promotion of productive investments. Military 
cooperation between the two countries is of high importance 
for Brazil with the hopes of improving the armed forces of 
both countries. Ambassador Moraira also stressed the 
cooperation with Paraguay in the fight against piracy, all 
forms of contraband, drug and arms trafficking, and sexual 
exploitation of children. Judicial cooperation to accelerate 
the legal proceedings between the two countries is key. 
Moreira initiative with the press was a response to a string 
of controversies casting criticism at Brazil. 
 
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German Ambassador Responds to Duarte,s Dig 
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3. (U) On 10/24, German Ambassador to Paraguay, Dr. 
Horst-wolfram Kerll, sent a letter to a local newspaper, 
cleverly taking issue with President Duarte, the local 
newspaper quoted President Duarte during a recent trip to 
Spain qualifying Paraguay and South America,s poverty as 
legacy of its colonial past and maintaining Europe had an 
obligation to help Paraguay.  The Ambassador pointed out that 
Europe imports products worth millions of Euros from 
developing countries and provides financial assistance to the 
GOP through Mercosur. The EU is the largest importer of goods 
produced by Mercosur. Germany has provided Paraguay much 
assistance in the area of technology. It,s not fault of 
Europe or Developed nations that countries that are rich in 
natural resources continue to live in extreme poverty. 
Rather, it is the responsibility of political leaders who 
implement unprincipled policies. Developing countries will 
remain poor until they effectively combat corruption, 
eliminate nepotism and address impunity. 
 
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Ambassador Working Up Until Departure 
------------------------------------- 
 
4. (U) On 10/27, Hours before departing post, the Ambassador 
granted radio and press interviews. He remarked on the 
strengthening of US and Paraguayan relations over the past 
two years and rejected the rumors that USG is interested in 
installing a military base and wants the Guarani aquifer. He 
stressed that a country such as Paraguay can not continue to 
survive on donations. Development is born and created by the 
people, and Paraguay needs to open its markets to private 
companies, so that the country can attract foreign 
investment. Upon conclusion of his remarks, the Ambassador 
drove across Paraguay,s border with Argentina into 
retirement from the Foreign Service and into the next chapter 
of his life. 
 
 
----------------------------- 
Wichita Mayor Visits Paraguay 
----------------------------- 
 
5. (U) On 10/25, Carlos Mayan, Mayor of Wichita arrived in 
Asuncion to offer his experience in managing municipalities 
and offered advised to administrators of the various 
metropolitan areas on how to resolve problem that afflict the 
city.  Mayan,s advised on how to solve problems related to 
the collection of taxes, administration of the city and 
investment in public works. He stressed that for democracy to 
work citizens must develop a sense of responsibility. 
 
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Colorado Party Holds Convention 
------------------------------- 
6. (U) On 10/23, A special convention was held by the ANR 
(National Republican Association, Colorado Party) to 
introduce changes in next year's internal elections based on 
a proposal by the ANR leadership headed by President Duarte. 
The convention appointed an electoral court which paved the 
way for electing party officials in February and separating 
the internal elections for municipal elections. It also 
increased the number of Executive Board members from 72 to 
90. The dissidents, who were in obvious minority, left the 
convention when their request for secret voting was rejected, 
but left open the possibility to challenge the convention's 
decisions. Duarte,s supporter casted the conventions as a 
strong vote of confidence in Duarte,s leadership. (See 
Septel Report) 
 
---------------------------- 
FBI Director Visits Paraguay 
---------------------------- 
 
7. (U) On 10/27, Acting President Luis Castiglioni meet with 
FBI Director Robert S. Mueller, III, who arrived yesterday as 
part of a tour of several Latin American countries. Regarding 
his visit, Castiglioni said that one of the issues they 
discussed is the installation of an FBI office in the US 
Embassy, which is expected to start operating early in 2007. 
He announced that 20 prosecutors and police officers will 
travel to Washington in December for training at the FBI 
headquarters and that only two FBI agents will come to 
Paraguay to act as liaison between the FBI and local security 
organizations. Mueller also met separately with Interior 
Minister Rogelio Benitez, Supreme Court President Antonio 
Fretes, Newly appointed National Security Advisor Oscar 
German Latorre and National Police Commander Fidel Isasa. 
Issues discussed was the role of the future FBI office and 
expressed that they will be working together with their 
Paraguayan counterpart to combat transnational crime, 
including money laundering, arms and human trafficking, 
terrorism and narcotics. (See Septel Report) 
 
-------------------------------- 
Dominguez Runs For ANR President 
-------------------------------- 
 
8. (U) On 10/26, businessman Osvaldo Dominguez Dibb (ODD) 
announced that his candidacy for the presidency of the 
Colorado Party (ANR) signaling he had formed an alliance with 
Colorado dissidents to include Juan A. Ramirez Diaz de Espada 
and Alfredo "Goli" Stroessner (ODD,s), who are the leaders 
of the National Republican Reconstruction (RNR) movement, 
against the candidacy of President Nicanor Duarte Frutos in 
the upcoming ANR primaries programmed for February 2006. 
Ramirez, who was the RNR,s candidate for ANR president said 
he was ready to give up his candidacy to Dominguez in order 
to unify the dissident groups under one candidate in the 
upcoming elections. (COMMENT: Dominguez is one of the richest 
individual in Paraguay, notorious for his involvement in the 
sale of contraband, including pirated cigarettes. He ran 
against Duarte in the highly contested 2002 primaries for 
presidential candidate and nearly defeated Duarte. END 
COMMENT.) 
JOHNSON