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