WELCOME TO ECUADOR, CODEL SHAW

UNCLAS SECTION 01 OF 02 QUITO 001191

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON SENV EC
SUBJECT: WELCOME TO ECUADOR, CODEL SHAW



1. The U.S. Mission in Ecuador extends a warm welcome to the
Honorable E. Clay Shaw, Nancy L. Johnson, John M. Spratt, Sam
Johnson, Bill Archer, Ed Pastor and spouses. You are coming
to one of the most environmentally diverse and spectacular
countries on Earth. You will experience the diversity of
the Andean highlands as well as the Galapagos Islands. The
Nature Conservancy (TNC) will be guiding your trip, however,
the Embassy stands by to provide the support necessary to
ensure your trip is an informative and productive one. We
are grateful that you are coming in order to highlight the
importance of conservation in one of the most environmentally
rich countries of the world.

Your Environmental Program
--------------


2. You will arrive in Quito late in the evening. The
following day TNC will take you to the 300-plus year old
Hacienda Zuleta to discuss the importance of Ecuador and
introduce TNC,s strategies. You will overnight at Zuleta,
and the next day you will visit the Condor Biosphere Reserve.
The Condor Bioreserve (named after the planet,s largest
flying bird and Ecuador,s national symbol),in the heart of
the Kichwa indigenous community, presents a unique
opportunity to experience diverse vegetation, Andean forests,
bird watching, and local culture.


3. USAID has formed an alliance with TNC, the Municipality of
Quito, The Quito Water Fund (FONAG) and the Ministry of the
Environment to conserve the Condor BioReserve, half of which
is comprised of five protected areas of the Condor BioReserve
(Cayambe-Coca, Antisana, Sumaco-Napo Galeras, Cotopaxi and
Llanganates National Parks). These protected areas provide
70% of the water for the city of Quito and conserve the
Tropical Andes Ecoregion, the world,s richest.


4. The main threats are seasonal burning of the pramo (or
the highland areas) for pastureland, clearing for
agriculture, environmental consequences of infrastructure
projects including roads, dams, pipelines, and the same
infrastructure that provides water to the City. You will
overnight in Papallacta at approximately 11,000 ft, known for
its hot springs.


5. The following day you will return to Quito (at
approximately 9,500 feet, it is the second highest capital in
the world) for a tour of the city and meetings with the Mayor
of Quito, Paco Moncayo, and other local representatives.
That night, U.S. Embassy officials will join you, TNC, Quito
officials and representatives from other NGOs for an intimate
discussion of environmental matters in Ecuador.


6. After your highland experience ends, you will proceed to
the Galapagos Islands to experience a rare and unusual
ecosystem. In the Galapagos, you will discuss conservation
with TNC,s representative.


7. Over the past five years, the USG has given through USAID
some $9 million to Ecuador to support conservation in the
Galapagos. While no previous Ecuadorian administration had
been particularly interested in Galapagos conservation, they
did at least maintain stability in the Galapagos National
Park. The main threats to the Galapagos are political
instability in the national park system, unsustainable use of
the park,s natural resources by fishermen, and illegal
immigration to the islands. The USG provides aid to the
Galapagos through various channels. The bulk of the aid is
channeled through USAID.


8. During your stay in the Galapagos, you will visit a
variety of islands, experiencing a panorama of both flora and
fauna. After visiting the islands, you will meet with
scientists from the Charles Darwin Research Station. From
the Galapagos, you will return to Quito in transit to the U.S.

The Hand of Man on the Environment
--------------


9. In terms of natural resources, Ecuador is an extremely
rich country. It may have more biological diversity per area
than any other nation on earth. Much of this is concentrated
in the Tropical Andes, the biologically richest region on the
planet. In marine environments, the conservation priority is
the 133,000 km2 Galapagos Marine Reserve, the world,s second
largest protected marine area.

10. The potential for Ecuadorians to benefit from natural
areas is enormous. In 2004, tourism totaled $367 million,
and most international tourists came to visit a protected
area. Watershed management is key to providing water for
hydropower, which accounts for 60% of the countries nations,
electricity, for personal and industrial consumption, and for
agriculture.


11. Unfortunately, Ecuador suffers the second highest rate of
deforestation among South American countries. The fall of
Gutierrez and the succession of Palacio as President have
brought no relief to the environmental situation in Ecuador.
Experts agree that the environmental area - which is
typically not a priority during calm times - has suffered
particular neglect and instability. Illegal logging,
overexploitation of the Galapagos, and weak institutions top
most experts, list of concerns.


12. Ecuador has established an impressive park system, which
covers 18% of the mainland plus 95% of the Galapagos.
Unfortunately, mainland parks are significantly under funded,
and in some cases one person is responsible for as many as
200,000 acres. In the Galapagos, monitoring and enforcement
has been severely undercut by disputes between the national
park authorities and fishermen allied with local politicians.

Political Considerations
--------------


13. Ecuador is highly unstable politically, with seven
presidents in the past nine years. None of the last three
democratically elected presidents served their term.
Ex-president Lucio Gutierrez was the most recent to fall to
popular uprisings, on April 20. His vice president, Alfredo
Palacio, succeeded him after Congress declared Gutierrez to
have "abandoned" his constitutional responsibilities. Some
Ecuadorians criticized the USG for not immediately
"recognizing" the Palacio administration. Relations with the
Government of Ecuador were never broken, however, and
continue to be strong. Given the uncertainty surrounding the
recent change of government, it is appropriate that your
visit maintain a low political profile. We suggest you keep
the focus on environmental issues, which are of great concern
to this Mission.

Economic Situation
--------------


14. Blessed with substantial petroleum reserves, excellent
soil and perfect climate, Ecuador is a rich country with a
poor population. Endemic corruption, bad economic policies
and political instability are to blame, resulting in 25 years
of stagnant wages and a 70 percent poverty rate. Despite
coffers swelled by rising oil revenues, government
expenditures never approach meeting the population,s needs.
Many migrate, others take up illegal trade, especially in the
border areas near Colombia. We are currently negotiating a
free trade agreement with Ecuador and Andean neighbors Peru
and Colombia. A successful FTA could stimulate job creation
that helps reduce these problems.

Chacon