PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 21-27

C O N F I D E N T I A L SECTION 01 OF 02 ASUNCION 000711 SIPDIS STATE FOR WHA/BSC AND EB/IFD/OIA STATE PASS TO USAID FOR LAC/AA STATE PASS TO USTR FOR SCRONIN AND LYANG NSC FOR KIM BREIER 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: DECL: 05/27/2015 TAGS: PGOV PREL PINR KCRM MOPS VE CU PM PA SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 21-27 REF: A. ASUNCION 675 ¶B. ASUNCION 627 ¶C. ASUNCION 594 Classified By: PolCouns James P. Merz, reason 1.4 (b) and (d) ¶1. (U) Summary: -------------- -- Congress approves military exercises with the US -- Paraguay to sign Open Skies with Panama -- Bangladeshi nationals arrested -- Presidential cabinet shuffle -- Brazilian troops control border with Paraguay -- Venezuela and Cuba seek deeper ties Congress approves military exercises with the US -------------- ¶1. (U) On May 20, the Chamber of Deputies approved a bill to extend diplomatic privileges and immunities to U.S. participants in more than twenty joint combined exercises, medical training exercises, and exchanges from July 2005 through December 2006. Although unable to thwart approval of the bill, the Deputies belonging to the Beloved Fatherland (PQ) and the Country in Solidarity Party (PPS) opposed the bill. Authorization for U.S. forces to enter Paraguay is still making its way from the Defense Ministry to the Senate, but adoption in June is expected. Paraguay to sign Open Skies with Panama -------------- ¶2. (C) On the heels of Open Skies agreements signed in early May with Chile and the U.S. (ref B and C),a highly placed source within the GOP indicated that Paraguay will sign its next Open Skies agreement with Panama on June 2. Additionally, media reports indicate that Brazilian budget airline Gol Linhas Aereas Inteligentes SA (GOL) has already received authorization for direct flights to Asuncion, which should begin in the second half of 2005. Bangladeshi nationals arrested -------------- ¶3. (C) The Police Special Operations Force (FOPE) and the Secretariat for the Prevention and Investigation of Terrorism (SEPRINTE) agents arrested 14 Bangladeshi nationals in Ciudad del Este on May 19. Comment: Sensitive reporting indicates that the Bangladeshi nationals are part of a larger document smuggling ring and possibly part of an alien smuggling circle. Although several of those arrested carried legitimate documentation, they were falsely obtained. A police station in the outskirts of Ciudad del Este, whose chief is Alfredo Mino, was responsible for authorizing the issuance of several of these documents. Presidential cabinet shuffle -------------- ¶4. (U) As reported per reftel A, President Duarte appointed former Industry and Commerce Minister, Ernst Bergen, as the new Finance Minister on May 19 after previous Finance Minister Dionisio Borda resigned. Separately, the President appointed Ruben Candia Amarilla as the new Justice and Labor Minister on May 19, Jorge Von Horoch as the new Deputy Finance Minister on May 22, and Raul Vera Bogado as the new Industry and Commerce Minister on May 23. Biographical information on the new ministers will follow septel. Brazilian troops deployed to control border with Paraguay -------------- -------------- ¶5. (U) On May 22, local press reported that Brazil deployed Army, Air Force, and Navy units to its border with Paraguay to control strategic points through which contraband, arms, and drugs could enter. The military operation named "Jaura II" covers the Brazilian states of Mato Grosso, Mato Grosso do Sul, and the northeastern region of Parana. To date, there has been little public Paraguayan reaction to the Brazilian military's exercise. Venezuela and Cuba seek deeper ties -------------- ¶6. (U) On May 24, local press announced that Venezuela's government proposes a plan to provide free medical treatment to Paraguayan citizens who must undergo eye surgery. The patients would be sent to Cuba via Venezuela. The GOV would pay for the airfare between Paraguay and Venezuela; the Cuban government would cover the airfare between Venezuela and Cuba as well as the medical treatment. Separately, media reports that Venezuela,s President Chavez seeks Paraguayan support for its plan to create a Latin American television network, "Televisora del Sur". The new system would compete with the US network CNN en Espaol. Paraguay is reportedly studying both proposals. KEANE