Identifier
Created
Classification
Origin
06ASUNCION1200
2006-12-01 18:38:00
UNCLASSIFIED
Embassy Asuncion
Cable title:  

PARAGUAY POLITICAL AND ECONOMIC UPDATE, NOVEMBER

Tags:  PGOV PHUM PREL 
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DE RUEHAC #1200/01 3351838
ZNR UUUUU ZZH
R 011838Z DEC 06
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC 5087
INFO RUCNMER/MERCOSUR COLLECTIVE
RUMIAAA/USCINCSO MIAMI FL//SCJ3/SCJ33/SCJ34/SOCSO LNO//
RHEHNSC/WHITE HOUSE NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
UNCLAS ASUNCION 001200 

SIPDIS

SIPDIS

STATE FOR WHA/BSC, INL/LP (JIM HIDES)
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: PGOV PHUM PREL
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, NOVEMBER
25 - DECEMBER 1


UNCLAS ASUNCION 001200

SIPDIS

SIPDIS

STATE FOR WHA/BSC, INL/LP (JIM HIDES)
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: PGOV PHUM PREL
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, NOVEMBER
25 - DECEMBER 1



1. (U) TABLE OF CONTENTS:

-- Oviedo Sentence Confirmed, Prompting Protests
-- UN Official Discusses Torture
-- Pension Fund President Indicted
-- Security Expert Talks About Military Transformation
-- Supreme Court Justice Fretes Rejected by Opposition
-- Paraguay Ranked an Imperfect Democracy
-- Government Reduces Time To Open a Business
-- Languishing Corruption Cases: aka, Impunity
-- HIV/AIDS Prevention

OVIEDO SENTENCE CONFIRMED, PROMPTING PROTESTS


2. (U) The Supreme Court rejected a motion by General Lino
Oviedo and UNACE Senator Jose Manuel Bobeda November 14 to
overturn their convictions and sentences of 3 to 10 years
respectively for their involvement in the 1996 coup attempt.
Oviedo and Bobeda had argued it was unconstitutional for
their case to have been tried before a military court.
Oviedo was imprisoned upon his return in June 2004 from
having taken refuge in Brazil and is now only in the third
year of his 10-year sentence. Bobeda has already completed
an abbreviated version of his sentence and had been trying
essentially to clear his name. Separately, the Supreme Court
ruled November 30 that no new evidence had surfaced to merit
reconsideration of Oviedo's sentence. Several Oviedo
supporters protesting Oviedo's continued imprisonment
crucified themselves November 29 in downtown Asuncion,
evoking shock but producing no impact on legal decisions.

UN OFFICIAL DISCUSSES TORTURE


3. (U) Manfred Nowak, the U.N. Special Rapportuer to the U.N.
High Commissioner for Human Rights, released his preliminary
findings on "Torture and other Cruel, Inhumane or Degrading
Treatment in Paraguay" to members of the Diplomatic Corps
November 29. Nowak noted that torture "does exist" in
Paraguay however, he found the government willing to address
the problems that exist. He stated persons are most likely
to encounter torture or inhumane treatment while in police
custody. Nowak referred to testimonials about forced
confessions via the use of suffocation and/or tools to

squeeze testicles. (NOTE: According to Attorney General
records, no one has been prosecuted or convicted of torture
since 1999. END NOTE).


4. (U) The Special Rapportuer's report asserts that
corruption in the prison system is endemic because the
government does not provide basic needs. Nowak described
conditions as "alarming," expressing concern about unsanitary
food, health conditions, limited authority of guards over
prisoners and inadequate dormitory facilities. The report
found no evidence of forced recruitment of children by the
military, however, hazing still remains a problem. (NOTE:
The U.N. is preparing human rights booklets for distribution
to soldiers. Henry Jackelen, the U.N. Resident
Representative, stated that the U.N. plans to establish a
working group with the Diplomatic Corps to evaluate the human
rights programs and progress in Paraguay. END NOTE).

PENSION FUND PRESIDENT INDICTED


5. (U) The president of the Municipal Pension Fund, Edgardo
Gomez Zaputovich, was indicted November 27 by prosecutor
Rocio Vallejos of the Attorney General's Economics Crime
Unit. Gomez Zaputovich allegedly accepted bribes and caused
significant economic loss to the Fund by proposing and
ordering unreasonable purchases of stock. The total economic
loss caused to the Fund amounts to approximately USD 400,000.
The indictment is based on evidence provided by the Support
Unit of the Office of the Controller,s General, which
receives technical assistance from USAID. The head of the
Municipal Pension Fund,s investment department and one
member of the executive council were also indicted for their
involvement in causing economic loss to the Fund.



SECURITY EXPERT TALKS ABOUT MILITARY TRANSFORMATION


6. (U) Dr. Michael Gold-Biss, a National Security Professor
at the Center for Hemisferic Defense Studies at the National
Defense University, conducted a series of meetings with VP
Luis Castiglioni, Members of Congress and senior military
officials November 27-30 regarding military transformation
and modernization. Gold-Biss stressed the need for Paraguay
to develop a national security strategy with guidance from
the President, in order to modernize and transform the
military into a force that can meet the challenges they face
internally and in the region. Gold-Biss and Vice
Presidential Advisor Juan Facetti are working on creating a
working group of some 10-12 experts who would convene
potentially in February 2007 -- as a follow-up to the CHDS
seminar in Asuncion in September 2005 -- with a view to
developing a National Security Strategy. (COMMENT:
Gold-Biss' visit occurred at an opportune moment with the
identification of a new Commander of the Armed Forces in
General Bernardino Soto Estigarribia, who has sounded a
commitment to military reforms. It remains to be seen
whether Soto will be able to garner sufficient support from
disperse political sectors to forge a meaningful and
implementable defense strategy. END COMMENT).

SUPREME COURT JUSTICE FRETES REJECTED BY OPPOSITION


7. (U) The Senate, controlled by the opposition, rejected the
confirmation of Supreme Court Justice Antonio Fretes to
another five-year term. The opposition (including Colorado
dissident Senator Julio Dominguez) voted 27 against 17
Colorado votes for Fretes. The opposition set its sights on
removing Fretes immediately following the Supreme Court's
decision in early 2006 to allow President Duarte to
simultaneously assume the presidency of the Colorado Party.
Fretes was one of 5 Supreme Court Justices that sided with
Duarte. The opposition argued the Supreme Court's decision
was in violation of Article 237 of the Constitution which
prohibits a sitting president from holding other positions.
Fretes will remain a Supreme Court Judge until the selection
process produces a candidate that can win a majority of votes
in the Senate. Meanwhile, Fretes his filed his own legal
challenge to his tenure being terminated.

PARAGUAY RANKED AN IMPERFECT DEMOCRACY


8. (U) The Economist Magazine recently ranked Paraguay 71
among 167 countries in its "The World in 2007" Democracy
report. Paraguay is ranked in the group of states considered
to have an "imperfect democracy," including Brasil (42),Peru
(75),and Bolivia (81). Paraguay received its lowest scores
in: Cultural Politics, Political Participation and Government
Functioning. Its highest rankings were in Electoral
Processes and Civil Liberties.

GOVERNMENT REDUCES TIME TO OPEN BUSINESS


9. (U) The World Bank,s global survey estimates that it
takes an entrepreneur a glacial 74 days (on average) to
register a business in Paraguay. The Government of Paraguay
unvieled November 27 a simplified business registration
system to slice that time in half, and reduce average
start-up costs to an entrepreneur from an estimated USD 850
to USD 200. With assistance provided from the USAID-managed
MCA Threshold Country program, seven varied government
institutions, including the Ministry of Industry and
Commerce, the Supreme Court, and local governments, came
together and committed three months ago to fix Paraguay,s
business start-up process. Paraguay has now put the
simplified system into operation, and will look for ways to
reduce time and cut costs even further. Further reductions
will require Congressional approval of specific legal
reforms. The goal now is to obtain those legal changes and
drop the registration time down to a blistering fast 9 days.
Who could possibly object? Only those currently getting


kickbacks from the current system.

LANGUISHING CORRUPTION CASES, AKA IMPUNITY


10. (U) The University in Asuncion (UNIDA) released the
results of a comprehensive analysis of the fate of economic
crime and corruption cases opened in Paraguay during
2001-2005. This study, conducted with USAID support, was the
first of its kind since Paraguay moved to a new criminal
procedure system. Looking in-depth at all 80 economic crime
cases that reached the accusation or trial stages, the
analysis revealed extraordinarily long delays at every step
of the process, which in many instances dramatically exceeded
timeframes set by law. A startling 77 percent of the cases
ultimately just expired under the statute of limitations.
Wealthy or well-connected defendants often simply play "beat
the clock," filing motions that simply prevent legal progess
-- and lead to legalized impunity Key judicial leaders have
commented to USAID that the results and the data obtained
will reinforce efforts to improve efficiency and combat
corruption in the system.

HIV/AIDS PREVENTION


11. (U) The Global Fund for HIV/AIDS, Tuberculosis and
Malaria recently approved USD 9.1 million in funding for
Paraguay,s proposal in HIV/AIDS prevention. The program
will focus on six regions where the epidemic is concentrated
or where the potential for fast growth of the epidemic is
indicated, including places where there is high migration
to/from neighboring countries (Brazil/Argentina) with higher
prevalence; an increase in trade, drug use, and/or sexual
exploitation; or limited access to health services. Funding
will be administered by a leading Paraguayan NGO, the Center
for Investigation in Development (CIRD),a key USAID partner
in both democracy and public health with a proven track
record in successfully managing funds to produce expected
results.
CASON