PARAGUAY POLITICAL AND ECONOMIC UPDATE, NOVEMBER 4

UNCLAS ASUNCION 001130

SIPDIS

SIPDIS
SENSITIVE

STATE FOR WHA/BSC, INL/LP (JIM HIDES),AND 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

E.O. 12958: N/A
TAGS: PHUM PREL PGOV PA VE UR AR BR BO JA SP
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, NOVEMBER 4
- 9, 2006

REF: ASUNCION 1089


1. (U) SUMMARY:

-- Journalists March for Enrique Galeano
-- Paraguay Ranked 5th Worst in Latin America
-- U.N. Tells Paraguay Ratify Arms Trafficking Protocol
-- The Royals, Evo and Paraguay


JOURNALISTS MARCH FOR ENRIQUE GALEANO


2. (U) The Paraguayan Journalist Union (SPP) organized a
"March for Life" November 3 to call attention to the
disappearance of journalist Enrique Galeano. More than 100
people attended the protest in the Plaza of the Disappeared,
located adjacent to the Government Palace in Asuncion. Nine
months ago, Galeano was declared missing after he did not
return home from work. Galeano had issued numerous critical
statements about individuals, including local Congressman
Magdaleno Silva of the Colorado Party, on his radio station
tying them to drug trafficking and corruption. The SPP has
remained very outspoken in its quest to have the government
continue its search for Galeano and hold those responsible
for his disappearance accountable. The case is still under
investigation by the Attorney General's Office. (NOTE: The
SPP has sought the assistance of the InterAmerican Court on
Human Rights (IACHR) at the OAS to push the GOP to continue
in searching for Galeano and those responsible for his
disappearance. In October, the IACHR sent a letter to the
GOP requesting information about the case. The GOP is in the
process of responding. END NOTE).

PARAGUAY RANKED 5TH WORST IN LATIN AMERICA


3. (U) Paraguay ranked 116 of 163 countries and remains one
of the most corrupt countries in the world, according to
Transparency International's Perceptions Index released
November 6. Paraguay's score ranked it as the 5th-most
corrupt country in Latin America, an improvement over the
previous year when it ranked second only to Haiti.
Paraguay's score of 2.6 represented a 0.5 point improvement
over last year's score on a 10-point scale and marked the
third straight year Paraguay has improved its score. But it
still falls comfortably into the "rampant corruption"
category.

U.N. TELLS PARAGUAY RATIFY ARMS TRAFFICKING PROTOCOL


4. (U) The U.N. held a conference in June to review progress
made on its program to address the illicit trade in small
arms and light weapons. As a result, the U.N. called on
Paraguay to ratify the "Protocol Against the Illicit
Manufacturing of and Trafficking in Firearms, their Parts and
Components and Ammunition," which came into force in July

2005. In 2001, U.N. Member States unanimously adopted the
protocol, committing themselves to collecting and destroying
illegal weapons, adopting and/or improving national
legislation to help criminalize the illicit trade of weapons,
regulating the activities of brokers, setting strict import
and export controls, taking action against violators of such
laws, and better coordinating international efforts to that
end. (NOTE: Paraguay's War Materials Directorate (DIMABEL) is
responsible for controlling and registering weapons.
However, DIMABEL does not have an operational unit capable of
investigating illegal arms transactions and thus has not been
active in making seizures. On a positive note, Paraguay's
Anti-Drug Secretariat (SENAD) is allowed to make weapons
seizures when it can tie weapons to information acquired from
drug traffickers. On that basis, SENAD has seized over 1,200
weapons in three major raids over the last three months. END
NOTE).


5. (SBU) In its June 2006 report the U.N. Review Conference
on Small Arms identified Paraguay as 1 of 60 countries that
has collected and destroyed large amounts of illegal small

arms. However, it also noted that Paraguay, along with
Uruguay, had not ratified the Protocol. Other Mercosur
countries, Brazil and Argentina, have already adopted the
Protocol and strengthened their national legislation to
control the illegal trade in small arms. SENAD Minister Hugo
Ibarra told POLOFF October 25 that the weapons are legally
purchased by distributors and gun dealerships. However,
these companies, which do not do background checks on
purchasers, resell legal and illegal weapons to criminal
organizations, which then traffic them across Paraguay's
porous borders with impunity. Ibarra acknowledged Paraguay's
control over the importation and sale of weapons is extremely
limited (reftel). The UN just hosted a two-day conference
here, with MFA support, to encourage Mercosur states to pull
up their socks and clamp down on gun-running.

THE ROYALS, EVO AND PARAGUAY


6. (U) In recent weeks, the King and Queen of Spain, Juan
Carlos Borbon and Sofia Frederika; Japanese Prince Akishino
Fumihito; and Bolivian President Evo Morales have all made
state visits with President Nicanor Duarte. The Royals met
with Duarte to discuss migration issues as well as economic
development and debt suspension. King Juan Carlos offered a
loan of USD 10 million for small businesses and offered to
exchange USD 11 million of the Paraguayan debt of USD 37
million for education projects. Prince Akishino expressed
his father's hope for further development in relations and
commemorated the 70th anniversary of Japanese immigration to
Paraguay. While Evo Morales met with Duarte to continue
dialogue to quash the concerns over the Bolivian/Venezuelan
military agreement. The two presidents are scheduled to meet
again December 8 in Cochabamba during the Summit of South
American Presidents.
CASON