PARAGUAY POLITICAL AND ECONOMIC UPDATE, DEC. 4 - 10

UNCLAS SECTION 01 OF 02 ASUNCION 001498

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 BARBARA MOORE
NAIROBI FOR MICHAEL FITZPATRICK

E.O. 12958: N/A
TAGS: PGOV PHUM PREL ECON PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, DEC. 4 - 10

REF: ASUNCION 1457


1. (U) SUMMARY:
-- President Signs Tourism Law
-- Duarte to Run for Party President; Impeachment Proposal
Submitted
-- Oviedistas Hold Coordinated Protests

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President Signs Tourism Law
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2. (U) On 12/5, President Duarte signed a new Tourism Law
setting a commission of six percent above the cost of airline
tickets for local travel agencies. The regulation of the law
will fall to the Secretariat of Tourism. The local travel
agents' association welcomed the decision, calling it a
victory for the local industry. American Airlines, which
stated during heated debate on the law that it would leave
the Paraguayan market if the measure was enacted, has not yet
reacted to the signing of the new law. The local American
Airlines representative told EconOff that she would be
meeting with her superiors in the US during the week of
12/12, and that she expected them to follow through with
their plans to pull out of the Paraguayan market.

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Duarte to Run for Party President; Impeachment Proposal
Submitted
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3. (U) On 12/5, President Duarte registered as a candidate
for presidency of the Colorado Party in elections scheduled
for February 19. On 12/6, following up on its threat to
impeach President Duarte were he to bid for the Colorado
Party presidency, the Beloved Fatherland Party (PPQ),
submitted a proposal to the Chamber of Deputies calling for
the impeachment of President Daurte on grounds it constitutes
a violation of several constitutional provisions most
prominent of which is Article 237 which prohibits the
President from assuming another position -- public or
private. A special session of Congress will be held on 12/13
to debate the issue. The PPQ also has the support of the
Authentic Radical Liberal Party (PLRA) and the National Union
of Ethical Citizens Party (UNACE),but its proposal will fail
due to the lack of votes (a motion of impeachment requires
2/3 support in both houses of Congress). Duarte has
dismissed the impeachment motion as irresponsible noting he
intends to name an ally to serve as acting Party President
should he be elected.


4. On 12/7, Senate President Carlos Filizolla (PPS) told CDA
that he did not believe Duarte's bid was illegal, describing
the opposition's proposal as political grandstanding more
than anything as even they knew they did not have the votes
to carry their motion. Filizzola stated that the country
under Duarte was more stable than ever. He argued against
impeachment on grounds it should only be considered when the
President was clearly implicated in illegal or corrupt
activities.

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Oviedistas Hold Coordinated Protests
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5. On 12/7, supporters of Lino Oviedo, held simultaneous
protests in Villa Florida and Encarnacion. In Villa Florida,
located in the Misiones department, approximately 120 miles
south of Asuncion, Diputado Edgar Venialgo led more than 200
people and blocked a major roadway more than 2 hours.
Venialgo said Oviedo should be freed and have the opportunity
to run for the 2008 elections. In Encarnacion, located in
the Itapua department, approximately 230 miles southeast of
Asuncion, Yuri Remesowsky, an Alderman in Itapua, led a
protest. Other local authorities attending the Encarnacion
protest included Julian Acosta, UNACE district president, and
Julio Hauron, an Itapua Assessor. These protests are an
extension of demonstrations that have been held by Oviedo
supporters in Asuncion over November calling for Oviedo's
release from jail. Oviedo supporters have vowed to continue
holding protests until Oviedo is freed.
JOHNSON