HONDURAN PRESIDENT MADURO DISCUSSES UPCOMING

S E C R E T SECTION 01 OF 04 TEGUCIGALPA 000826

SIPDIS

STATE FOR TFIZ, IO, PM, S/CT, NP, DRL/IL, EB, AND L
STATE FOR WHA, WHA/CEN, WHA/PPC, WHA/CCA AND INL/LP
STATE PASS USTR
STATE PASS AID FOR LAC/CEN
DOL FOR ILAB

E.O. 12958: DECL: 04/02/2013
TAGS: PREL PGOV PTER SNAR EFIN ETRD ELAB KTIA IZ HO
SUBJECT: HONDURAN PRESIDENT MADURO DISCUSSES UPCOMING
MEETING WITH PRESIDENT BUSH, IRAQ, CUBA AND THE PENDING IMF
AGREEMENT

REF: A. STATE 75175

B. TEGUCIGALPA 674

C. 02 TEGUCIGALPA 3318

Classified By: Ambassador Larry L. Palmer for Reasons 1.5 (B) and (D)


1. (S) SUMMARY: Honduran President Ricardo Maduro suggested
that Central American Presidents remain interested in raising
non-CAFTA topics during their upcoming meeting with President
Bush. He also reaffirmed his commitment to provide Honduran
troops for post-conflict operations in Iraq, even while he
acknowledged weak public statements of support by the
Honduran UN Permanent Representative at last week's UNSC
session. Maduro concurred that the GOH would review any
actions in CUBA in light of Fidel Castro,s recent crackdown
on human rights activists. Finally, he flagged continuing
political problems in addressing the escalating public wage
bill, in particular the challenge of breaking a crippling
doctors' strike. He indicated that an IMF agreement remains
a top priority but said differences remained between the
Government of Honduras and the IMF. END SUMMARY


2. (U) Ambassador met one-on-one with President Maduro at the
Casa Presidencial March 28. Ambassador subsequently met with
Foreign Minister Perez-Cadalso on April 1 to discuss Iraq and
other key issues (septel).

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April 10 Central American Presidents Visit
--------------


3. (C) President Maduro opened the discussion by raising the
upcoming meeting between the five Central American presidents
and President Bush scheduled for April 10 in Washington.
Maduro reiterated that each president had been assigned
specific topics to raise with the President and would take a
regional rather than bilateral approach. He emphasized that
the Central American presidents wanted to present their
vision for the future of the region to the President.
Specifically, the Presidents had laid out that vision in the
Roatan Declaration. The list follows: Agriculture and the
asymmetry which should govern our future commercial relations
(Costa Rica); Central American security, the fight against
narcotrafficking, terrorism and organized crime (El
Salvador); Disarmament and reduction of arms in the region
(Nicaragua); Consolidation of democracy and regional
integration (Guatemala); and Promotion of investment in
Central America and the development of infrastructure
(Honduras).


4. (C) While deeply appreciative of the opportunity to meet
with President Bush given the ongoing war, Maduro suggested
that, in his view, the Central American Free Trade Agreement
(CAFTA) is only part of the process needed to turn the region
as a whole "into a success story" and that the presidents
wanted to make the most out of this meeting with the
President to advance the U.S.-Central American agenda. He
stated that the Central Americans wanted to point out the key
areas that had to be addressed in the region in order to
promote needed political and economic integration for
long-term economic growth and poverty reduction. Ambassador
reminded Maduro that in this instance, given the short amount
of time available before the meeting, that remarks should be
concise, focused, and limited to CAFTA.

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Maduro Supportive on Iraq
--------------


5. (S) Ambassador acknowledged President Maduro's supportive
stance on Iraq and for Honduras joining the coalition. He
noted the Government of Honduras' (GOH) support underscored
the strong relationship between the two countries and that
Washington was appreciative. Ambassador also told Maduro
that Washington was interested in pursuing his offer of
troops to assist in post-conflict Iraq and encouraged Maduro
to make a formal offer in writing to the USG so our
military-to-military planning could move forward. However,
Ambassador called attention to USG disappointment with the
luke-warm statement delivered by Ambassador Manuel Acosta
Bonilla, the Honduran Permanent Representative to the United
Nations, during the March 26 Security Council open session on
Iraq. Ambassador urged Maduro and the GOH to play a more
active public role in support of the coalition's goals.
Maduro reaffirmed Honduras' support for the coalition and was
apologetic regarding the statement by Acosta Bonilla. He
acknowledged that the remarks were insufficient and that they
did not reflect the solid support Honduras has for the
coalition's goals. He went so far as to suggest that he
would tell the Foreign Minister to remove Bonilla if his
performance at the UN did not improve. (COMMENT: Only the
President has the legal authority to remove a standing
ambassador and Maduro is probably aware of this. In
addition, given Bonilla's status as one of the Nationalist
Party's senior statesmen, only Maduro himself would be able
to dismiss him. More than likely Maduro's statement was
intended to deflect criticism of his administration's
relatively meek public support of the coalition's efforts to
date. END COMMENT.)

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ICC Article 98 Agreement and Counterterrorism Conventions
-------------- --------------


6. (SBU) Ambassador reiterated the necessity of Honduran
ratification of the International Criminal Court (ICC)
Article 98 Agreement and expressed hope the agreement could
be sent to Congress for action as soon as possible.
Ambassador also provided President Maduro with a list of five
outstanding UN and two OAS counterterrorism
conventions/protocols that the USG would like Honduras to
sign and/or ratify as soon as possible (ref C). Maduro did
not seem fully informed on this subject, confusing the
Article 98 Agreement with the outstanding counterterrorism
conventions. Maduro said he would pass the list to the MFA
(which Post confirmed he did) but he did not offer any
time-frame for movement on either the ICC agreement or the
outstanding counterterrorism conventions/protocols.
(COMMENT: The GOH is unlikely to forward the Article 98
Agreement, or seek congressional action on it, until after it
secures congressional authorization for the deployment of
Honduran troops to Iraq. END COMMENT.)

-------------- --------------
AMB Urges Continued Delay on Honduran Ambassador to CUBA
-------------- --------------


7. (S) Ambassador called Maduro's attention to the fact that
Fidel Castro was taking advantage of the conflict in the
Middle East to crack down on human rights/pro-democracy
activists in CUBA (ref A). He directly asked Maduro to
further delay the appointment of a Honduran ambassador to
CUBA. If an appointment is forthcoming in the future,
Ambassador reminded Maduro that the GOH had agreed to consult
Post prior to any type of announcement. Maduro acknowledged
that he is not very comfortable with CUBA or the CUBAn
doctors in Honduras, referring to concerns that the CUBAn
doctors practice "more than medicine." However, Maduro once
again repeated that his administration was not responsible
for the opening to CUBA and that he had inherited the
situation from his predecessor. He promised to keep USG
concerns in mind in any dealings with CUBA.

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Disappointing Results on Honduran Counternarcotics Efforts
-------------- --------------


8. (S) The Ambassador underscored USG disappointment over the
lack of effective Honduran interdiction efforts against the
large amount of illegal narcotics that transit Honduras
annually. He pointed out that drug seizures in Honduras are
at a three-year low. Ambassador spelled out how corruption
within the Honduran military and police is undermining law
enforcement efforts. He explained that whenever the USG
passes counternarcotics information to GOH sources it is
invariably leaked to the traffickers. Maduro expressed
dismay and asked if the USG knew who was responsible.
Ambassador told Maduro the USG was investigating but to date
had no firm suspects. However, when the culprits are
discovered, Ambassador insisted that they be "summarily
dismissed." Maduro promised full support on the issue but
also cited a lack of resources as a major impediment to GOH
efforts to improve counternarcotics results.

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Maduro Very Concerned Over Continued Doctors' Strike
-------------- --------------


9. (C) Maduro then raised his deep concern over the
continued doctors' strike which began in Tegucigalpa March 18
and spread nationwide March 24, raising his fears that it
could cause general instability and that the doctors may try
to take over hospitals as had been done in the past. He said
he was considering dispatching police units to the hospitals
to prevent this from occurring and that he might be forced to
declare a "state of emergency," if the situation deteriorated
further. (NOTE: Maduro was scheduled to meet with his
cabinet later that same day regarding the strike. Since this
meeting, the doctors have suspended their strike and have met
with the GOH to discuss their differences. The GOH has
agreed not to fire any of the doctors that were on strike for
the time being. END NOTE.)


10. (C) Negotiations are ongoing. While the proximate cause
of the strike was a dispute with the Minister of Health Elias
Lizardi over appointments of doctors in public hospitals, the
deeper issue is the impending revision of a law which
guarantees that the basic doctor's salary is 14 times the
minimum wage which leads to relatively exorbitant salaries
compared with other public sector employees. Doctors earn
anywhere from USD 14,000 - 50,000 a year from just one public
salary, and many hold two government jobs or have a private
practice which greatly increases their income. The
government must reduce its public wage bill in order to reach
an agreement with the IMF. (See para 12 for additional
detail on IMF negotiations.)

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Increased Foreign Direct Investment and an IMF Package
-------------- --------------


11. (C) Maduro highlighted that increasing foreign direct
investment (FDI) remains a high priority for his
administration. Maduro referred to a conversation he had
with Ian Walker (a British economic consultant on the Casa
Presidencial payroll) who claimed that Honduras would need to
attract between USD 2.5 to 3 billion annually in order to
increase GDP by two percent. Maduro said he was considering
tax credits, tax forgiveness, duty free status, and other
measures to accomplish this goal. Maduro expressed optimism
that with increased FDI, GDP could rise to the level of
between five and six percent annually. Ambassador
complimented Maduro on his desire to attract increased FDI,
but noted that the main obstacle to accomplishing this goal
is deeper reform of the dysfunctional judicial system.
Ambassador added that "the lack of judicial security," is the
most serious concern for any prospective investor.


12. (S) During the conversation on FDI Maduro segued into his
desire to complete an IMF agreement as soon as possible (ref
B). Maduro stressed that his administration had been making
real progress on constraining the budget deficit and that the
IMF should take that into account. He also stated he thought
the IMF was being too dogmatic on the civil service salary
issue. The possible revision of laws guaranteeing doctors
and teachers salaries in multiples of the minimum wage,
meaning that every raise in the minimum wage leads to large
raises for doctors and teachers, is a hot button political
issue. (COMMENT: Interestingly, Maduro refrained from
asking for any type of USG assistance to move the IMF process
forward. It appears that he understands the parameters of
what the USG is willing to do with the IMF. END COMMENT)

Palmer