C O N F I D E N T I A L SECTION 01 OF 04 BRASILIA 002675

SIPDIS

E.O. 12958: DECL: 10/06/2015
TAGS: PREL PGOV BR OVIP ZOELLICK ROBERT US
SUBJECT: DEPUTY SECRETARY'S MEETING WITH PRESIDENTIAL
INTERNATIONAL AFFAIRS ADVISOR MARCOS AURELIO GARCIA, 6
OCTOBER 2005

Classified By: AMBASSADOR JOHN DANILOVICH. REASONS: 1.4(B)(D).



1. (C) Summary. Deputy Secretary of State Zoellick,
accompanied by Ambassador Danilovich and delegation, met on 6
October with Marco Aurelio Garcia, International Affairs
Advisor to President Lula da Silva. Garcia has often served
as Lula's special envoy for crisis situations in the region,
and much of the discussion focused on Bolivia, where the GOB
has tried to use both economic and political influence to
enhance stability and press for constitutional solutions. The
GOB sees Bolivia (as well as Ecuador and Peru) as
"fragilized" and views the coming Bolivian elections, the
debate on regionalization and a future constitutional
assembly as the key passages that will determine Bolivia's
future. D/S Zoellick urged that the OAS and IDB be involved
in supporting Bolivia in weathering those moments and in
institution building generally. On Venezuela, Garcia
indicated that the GOB has used its influence with Chavez to
successfully insert the "Group of Friends" into a useful role
in last year's referendum, to try to "soften" his
anti-American stances, and to mediate between Colombia and
Venezuela during a recent crisis. But Garcia would not be
drawn into a substantive discussion of Chavez's repressive
internal political actions. D/S Zoellick asked that the USG
and GOB look for ways to place the theme of democratic
solidarity in the region at the center stage of the upcoming
Summit of the Americas (with emphasis on the roles the OAS
and IDB can play). On bilateral relations, D/S Zoellick
suggested that the GOB and USG look for areas where
cooperation could be intensified, as it seems ironic that
U.S. relations with China and India now seem more dynamic
than those with Brazil, the hemisphere's other giant
democracy. Garcia expressed receptivity and said that the
GOB's guiding principle in its foreign policy is "expanding
the space for democracy" in the region and world. End
summary.


2. (U) In a 6 October morning meeting lasting more than an
hour at the Presidency's Plana

lto Palace, Deputy Secretary
Zoellick and Lula's senior international advisor, Marco
Aurelio Garcia, reviewed a range of regional issues.
Highlights follow below. A delegation list is at paragraph

15.


BOLIVIA
--------------


3. (C) Garcia said the GOB fears the entire Andean region is
"fragilized," with Bolivia, Ecuador and Peru all facing grave
challenges (Garcia placed Colombia in a separate category,
owing to its internal armed conflict). Especially in Ecuador
and Bolivia, weak institutions undermine political comity and
stability. In Bolivia, Garcia said enormous social and
income inequalities exacerbate a belief in much of the
population that the nation has been systematically "looted"
of its natural riches (silver, energy resources), and
wrongfully denied access to the sea. "A certain type of
nationalism" stems from these views, affecting the behavior
of all political forces in the country, to the detriment of
rational discourse on politics, economics and foreign
investment, Garcia said.


4. (C) Brazil's approach to trying to assist Bolivia, Garcia
explained, includes deepening its economic presence in the
country, seeking to invest heavily in gas, chemical and
metallurgical projects that can create employment and attract
other foreign investment. But these efforts are "paralyzed"
in Bolivia's insecure environment, a point that Garcia said
he and other GOB envoys regularly stress with Bolivian
interlocutors ranging from Evo Morales to Santa Cruz
businessmen. With all of these interlocutors the GOB insists
that Bolivians must seek constitutional resolutions to their
country's political crises, which are both electoral and
institutional, Garcia said. (He added that President Lula
intends to meet the major candidates and personally reinforce
this message.) But the GOB doubts that any candidate in the
coming presidential candidate will garner close to fifty
percent of the vote. Hence the congress would again have to
select a president, inevitably undermining his legitimacy,
especially if the congress' choice is not the largest vote
getter. For that reason, Garcia expressed some sympathy for
the idea of a two-stage referendum.


5. (C) Despite the challenges, Garcia expressed the GOB's
belief that the situation in Bolivia is "unstable but
controllable." Noting his emergency visits to Bolivia as
Lula's envoy during crisis points in 2003 and again this
year, Garcia opined that Bolivians "may approach the edge of
the abyss" but always seem to find a way back. Whoever
emerges as president will quickly perceive the need to build
a national consensus for governance, and this will moderate
his views, including on the petrochemical questions. Garcia
said the GOB reinforces this reality in its conversations
with Evo Morales in particular, and the GOB "has information"
that Morales is actually becoming more pragmatic in his
outlook as he contemplates the possibility of winning (which
Garcia quickly said the GOB still sees as uncertain). Garcia
downplayed the importance of foreign actors in Bolivia,
saying that Hugo Chavez and foreign NGOs may try to exert
influence, but the dominant factors in Bolivia are internal
ones. Garcia even claimed that Chavez, at Brazil's behest,
had played a moderating role in convincing Morales and his
supporters to soften their positions on legislation on
petrochemical industries.


6. (C) Deputy Secretary Zoellick agreed with the importance
of addressing the fragility of institutions in Bolivia. He
pointed out the danger of a refusal by parts of the
population to accept election results, and in that regard,
emphasized the importance of international election observers
and an international presence in the election's aftermath.
He asked what the U.S., Brazil, the OAS, and the IDB could do
to build institutions in Bolivia.


7. (C) Garcia saw three key passages ahead where
international efforts to support Bolivia could be focused.
First, the election will set the political context and
anticipate the conflicts for the foreseeable future. Second,
the current debate about regionalization (including focus on
potential models such as Spain) will influence events. And
third, the constitutional assembly will be a bellwether of
Bolivia's direction, one that is linked closely to the first
two. If the election and regionalization debate can produce
results that contribute to legitimacy, stability and
dialogue, then a salutary environment will be set for a
constitutional assembly. But if the elections and
regionalization debate produce greater polarization, the
constitutional assembly will be "surreal," with extremist
forces hijacking debate with divisive, exotic and unworkable
proposals, Garcia said.


8. (C) D/S Zoellick replied that the USG believes the OAS
could play helpful roles. Indeed, the USG believes now is
the time for thinking creatively of how the OAS and IDB can
be used more effectively in institution-building throughout
the region, since democracy is not only about elections, but
about institutions that work. Observing that he had just
come from Managua, D/S Zoellick pointed to Nicaragua as a
vivid example of the need for political parties that can
represent broad constituencies (Nicaragua has no center-left
party that can counter balance the Sandinistas, he noted),
for objective courts, and for tackling corruption.


9. (C) Garcia said he shared these views on the OAS, though
he said the organization may at times have to operate in a
"complex" manner. In example, he noted that the OAS's ability
to engage in Bolivia during the crisis there earlier this
year had been hampered by the fact that the new Secretary
General is Chilean -- a sore point for Bolivians. Instead,
Argentina and Brazil had sent in envoys (Garcia was
dispatched by Lula). (Note: Garcia failed to mention that the
envoys never reached Sucre, where the Bolivian congress was
meeting, due to riots in that city. End Note.) In future in
Bolivia, the OAS may be able to become involved. He also
noted Brazil's efforts to assist Ecuador in developing a
non-politicized judicial system, and said this is an area in
which the OAS might be especially helpful throughout the
region.

NICARAGUA
--------------


10. (C) Picking up on D/S Zoellick's comments on Nicaragua,
Garcia said he would visit that country in the near future,
and intended to meet with representatives from across the
political spectrum. He said he would insist in all of his
conversations on respect for elections and institutions. D/S
Zoellick in reply urged Garcia to speak to the PLC.

SUMMIT OF THE AMERICAS
--------------


11. (C) D/S Zoellick expressed his concern that the
declaration for the upcoming Summit of the Americas (SOA)
could become a formulaic document. He emphasized that the
SOA should be an important forum for showcasing the potential
of the OAS and IDB to provide political and economic support
for fragile nations in the hemisphere, and for strong
democracies to express their solidarity. It is important now
to create a sense of hope, he added. Garcia agreed, and
observed that some problems in the SOA may result in part
from "summit fatigue" and a flawed approach that has heads of
state signing off on poor declarations at the end of
torturous negotiations.

VENEZUELA
--------------


12. (C) Turning to Venezuela, Garcia explained that the GOB
has sought to maintain good relations with Venezuela and play
a positive role there. Brazilian vital interests dictate that
there must be no "upheaval" in its populous neighbor, because
a meltdown in Venezuela would set a dangerous precedent for
regional stability and endanger Brazil's economic investments
there. The GOB has maintained a dialogue with the opposition
in Venezuela, which has come to see Brazil as a stabilizing
force. The GOB has used its influence with Chavez to bring
the "Group of Friends" into the referedum process (though
Chavez initially balked at the group's composition), to
mediate between Chavez and Colombian President Uribe in the
recent crisis over FARC presence in Venezuela, and to caution
Chavez to take a "softer" rhetorical line with regard to the
U.S. Brazil continues to actively pursue joint ventures with
Venezuela in petrol refineries, construction of oil platforms
and tanker vessels, and provision of concessions for
Brazilian firms operating in Venezuela. D/S Zoellick asked
whether the GOB is concerned about repressive internal
actions by Chavez against opposition elements, NGOs and the
press. Garcia demurred on a clear response, saying only that
the GOB is taking a "wait and see" approach to the internal
political scene and that the Venezuelan press appears to
continue to be outspoken in its attacks on Chavez.


BILATERAL RELATIONS
--------------


13. (C) In considering U.S.-Brazil relations, D/S Zoellick
said he wanted to "plant some seeds" with the GOB. Noting
that he had recently returned from a bilateral strategic
dialogue in China and that the U.S. relationship with India
is also evolving, D/S Zoellick said he had found himself
thinking of Brazil and finding it ironic that there is not a
similar movement toward broader horizons in the U.S.
relationship with Brazil, the other giant democracy in the
western hemisphere. D/S Zoellick suggested that the USG and
GOB should consider new ways for working together in
initiatives on democracy building, development and assistance
projects and cooperation in science and technology, health
and the environment. He also suggested more frequent contact
at the ministerial level in finance and other areas beyond
the traditional realm of foreign ministries.


14. (C) Ambassador Abednur endorsed this approach and noted
his own contacts with a range of ministries in Brasilia to
energize cooperation in several areas. Garcia also agreed,
saying the GOB would welcome concrete initiatives to deepen
relations between the U.S. and Brazil. He criticized
Brazilian pundits who have frequently charged that the Lula
administration's foreign policy ignores or antagonizes the
U.S. for ideological reasons. Garcia opined that, while
Brazil's is a government of the left, it does not allow
ideology to influence its "realistic" approach to the world.
The GOB's guiding interest is "expanding the space for
democracy" throughout the world, starting in this hemisphere.
Garcia further observed that personal ties are important to
Lula, and that the friendship he enjoys with Presidents Bush
positively colors the bilateral relationship, as does the
good relations between FM Amorim and D/S Zoellick, and
Finance Minister Palocci and Treasury Secretary Snow. Such
relationships "are not accidental" and are reflective of the
many things that the two countries have in common, Garcia
added.



15. (U) PARTICIPANTS:

GOB:

Marcos Aurelio Garcia, International Affairs Advisor to
President Lula
Ambassador Roberto Abdenur, Brazilian Ambassador to the
United States
Paulo Chuc, Foreign Ministry Americas Desk Officer
Cristian Viana, Foreign Ministry Advisor


USG:

Deputy Secretary Robert Zoellick
Ambassador John Danilovich
NSC Senior Director Tom Shannon
DCM Phillip Chicola
D Chief of Staff Chris Padilla
Political Counselor Dennis Hearne (notetaker)
Interpreter



16. (U) D/S Zoellick's delegation cleared this message.