PARAGUAY POLITICAL AND ECONOMIC UPDATE, DECEMBER 2

UNCLAS ASUNCION 001226

SIPDIS

SIPDIS
SENSITIVE

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 PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, DECEMBER 2
- 8

REF: A. ASUNCION 0869

B. ASUNCION 0999


1. (U) SUMMARY:

-- Military Receives Peacekeeping Equipment
-- Bond Sale Successful
-- Emergency Management Team Visit

MILITARY RECEIVES PEACEKEEPING EQUIPMENT


2. (SBU) The Charge signed and officially turned over the
final shipment of equipment requested by the Paraguayan Armed
Forces Peacekeeping Center (CECOPAZ) on December 5 during
their annual graduation ceremony. The equipment transfer is
part of the Enhanced International Peacekeeping Capabilities
Program (EIPC). EIPC funds included USD 350,000 for training
and USD 247,000 for equipment. Then Ambassador Keane
delivered the first equipment transfer of computers and
audiovisual equipment in 2005. The latest shipment included:
Kevlar helmets (60),crowd control kits (30),lensatic
compass (20),compass pouches (20),medical backpacks (9),
stretchers (9),tents (2),concertina wire (50 rolls),spot
lights (4),binoculars (14) tripods (4),sand bags (5000),
military spec rucksacks (50),reflective vests (10),hearing
protectors (20),Gasmin GPS systems (20). (NOTE: As this
equipment transfer used FY 2001 funds, it illustrates just
how laborious and lengthy our current foreign assistance
delivery mechanisms are, even for relatively small amounts of
U.S. aid. A Paraguay Peacekeeping unit is to deploy to Haiti
this month with the Brazilian Peacekeeping Force. END NOTE).

BOND SALE SUCCESSFUL


3. (U) The Government of Paraguay successfully conducted its
second sovereign bond issue this year on December 6. The
Central Bank conducted the auction that was 60 percent
oversubscribed, with all of the bonds purchased by local
banks. A total of about USD 41 million was issued, with USD
29.5 million in USD denominated bonds issued with an average
yield of 8.8 percent. The remaining local currency
denominated bonds (worth about USD 11.5 million) were sold
with an average yield of 14.9 percent. Five banks
participated, including Citibank. A portion of the proceeds
will help provide capital for Paraguay,s second-tier public
bank, although on much worse terms than a concessional IDB
loan meant for that purpose that the Paraguayan Congress
refused to approve.

EMERGENCY MANAGEMENT TEAM VISIT


4. (SBU) The Massachusetts National Guard (MANG) Deputy
Commander Colonel Thomas Sellers, along with several
officials from the Massachusetts Emergency Management Agency
(MEMA) visited Paraguay November 29 to December 6, as part of
SOUTHCOM's State Partnership Program (SPP). This is the
third exchange visit in the past five months to help
establish a firm military-to-military and
civilian-to-civilian relationship on issues of mutual
interest and benefit. The MANG and MEMA Team met with their
counterparts in the Paraguayan National Emergency Secretariat
(SEN) to discuss the need for creating a national emergency
strategy and developing a national response plan. The MEMA
and MANG Team also met with Diputado Miguel Rojas Salvioni
(Colorado - ANR) and Senator Jose Manuel Bobeda (UNACE) to
discuss on-going areas of cooperation (Emergency Management,
Police Reform, Business Development, and the Safe
Neighborhood Initiative) as well as offering an opportunity
for other areas of cooperation. As they were able to observe
themselves through TV coverage of this week's riots here, the
police desperately need assistance in civil disturbance
control. MANG is actively looking into providing National
Guard MP's (who are police officers in their "day jobs") to
provide riot control training.
FITZPATRICK