PARAGUAY POLITICAL AND ECONOMIC UPDATE, FEBRUARY

UNCLAS ASUNCION 000245 SIPDIS SIPDIS STATE FOR WHA/BSC 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: PGOV PREL PINR KCRM PA SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, FEBRUARY 25-MARCH 3, 2006 ¶1. (U) Summary: -- Agriculture Minister Discusses Priorities -- Police Corruption Alive and Well -- Ambassador Visits Itapua -- Ambassador and Attorney General Discuss Priorities -- Prosecutor Accused of Taking Bribes -- Ambassador and Mayor Seeking U.S. Scholarships -------------- Agriculture Minister Discusses Priorities -------------- ¶2. (U) During the February 22 courtesy call of Ambassador Cason, Minister of Agriculture Gustavo Ruiz Diaz said that the Ministry's priority was increasing technical assistance (TA) to small farmers to increase productivity. He noted that TA has been insufficient, which has compounded the problems of the Ministry's historic over-reliance on soil-depleting cotton as a crop to which it has steered small rural farmers. Ruiz mentioned success stories with sesame exports and plans to increase sugar cane production for conversion into sugar, honey, and then into alcohol as futures areas of export. Ruiz may travel to Washington in early March and mentioned an interest in seeking meetings with USDA's Extension Service. According to Ruiz, the USDA helped establish Paraguay's extension service 30 years ago, but Paraguay's version has become ineffective. He would like to discuss ideas for improving the service, as well as the possibility of technical assistance from USDA. Econcouns later shared with the Ministry a copy of the trip report done by CSREES official James L. Green in 2004 after a visit to Paraguay. The Ambassador praised Ruiz for finally beginning the certification process needed to eventually export beef to the US. He encouraged Ruiz to seek funds, perhaps from Taiwan, to undertake studies necessary to gain FDA approval of the natural sweetener Stevia as a food additive. -------------- Police Corruption Alive and Well -------------- ¶3. (U) Paraguayan press reported that 3 of the 4 men caught on 2/27 robbing a police security van carrying 150 million Guaranies (25,000 USD) were policemen. The van was transporting the money to a bank from a supermarket. The robbery led to a shootout in which one of the criminal policemen was injured. ¶4. (U) On 3/1, local press published an extensive list of policemen that were involved in criminal acts over recent years ranging from narcotrafficking and robbery to homicides and taking bribes. President Duarte, in a recent interview, indicated that since he became President, more than 200 policemen have been fired because of corruption or criminal behavior. Duarte also defended his Chief of Police, Fidel Isasa, and stating that he will remain in his position. -------------- Ambassador Visits Itapua -------------- ¶5. (U) During a 2/23-2/25 trip to the Department of Itapua, the Ambassador discussed development, tourism, corruption, trafficking in persons and trade issues with Governor Luis Viedma Vigo. Governor Vigo was thankful for USAID assistance and expressed interest in exploring other avenues to work together, particularly in the area of economic development. In the city of Fram, the Ambassador discussed the USAID Healthcare project with Fram Mayor Tatiana Trosciuk and Dr. Jose Rolon at the local Health clinic. The Ambassador also visited the UPISA Sausage Factory, located in Fram, which is a part of USAID's Paraguay Vende Project, in an effort to promote increased sales and exports, and therefore increased employment. While in the city of Encarnacion, the Ambassador promoted tourism and English education with Mayor Juan Alberto Schmalko. He also met with Monsignor Ignacio Gogorza, the Bishop of Encarnacion and the President of the Paraguayan Episcopal Conference (CEP),to discuss the Catholic Church's views on government and the country's priorities. Gogorza maintained government corruption undermined economic development and had a harmful effect on the cultural behavior of the general population. He said that the Catholic Church would continue to criticize the government as appropriate and work to alleviate poverty. -------------- -------------- Ambassador and Attorney General Discuss Priorities -------------- -------------- ¶6. (U) On 2/28, the Ambassador met Attorney General Candia stressing the importance the U.S. placed on adoption of the anti-money laundering law and reform of the procedural code. Candia conveyed his support on both initiatives, noting that he had discussed with President Duarte support for the AML law. Candia described his desire to strengthen the Public Ministry as an institution weeding out bad prosecutors, training the good ones, and obtaining greater resources particularly for prosecutors historically neglected in the country's interior. The Ambassador applauded his initiative but reminded him that that it was just as critical he address the problem of impunity particular as relates to cases covered by the Economic Crimes Unit including the cases of Barrakat, Hijazi, and Panza (mid-level customs official implicated in offering a bribe). This unit has received resources in the past and will receive significantly more with implementation of Millennium Challenge Account Threshold Plan; it was critical he support the unit and press for closure on key cases. -------------- Prosecutor Accused of Taking Bribes -------------- ¶7. (U) On 3/2 prosecutor Arnaldo Giuzzio charged fellow prosecutor Miguel Angel Jara Servian with several counts of accepting bribes. Jara Servian was filmed during an operation by the Anti-Corruption Unit (UFA) receiving a bribe of 2 million guaranies (roughly 333 USD) to drop charges against a suspect. Jara Servian's assistant, Vivian Valenzuela, is also under investigation, but has not been charged. Jara Servian was the prosecutor for the Itapua Department, located approximately 231 miles Southeast of Asuncion, where corruption problems are especially pronounced. -------------- - Ambassador and Mayor Seeking U.S. Scholarships -------------- - ¶8. (U) On 3/2, the Ambassador called on Asuncion Mayor Enrique Riera. Among other things, they discussed joining efforts to secure scholarships and financial assistance for underprivileged , English-speaking Paraguayan students to attend universities in Florida and elsewhere. The Ambassador advised that he is seeking the cooperation of some 45 universities in this regard. Riera participated in a student exchange program in the U.S. in 1976, and has a solid network of connections in Miami. Miami and Asuncion are sister cities. CASON