PARAGUAY POLITICAL AND ECONOMIC UPDATE, MARCH

UNCLAS ASUNCION 000270 SIPDIS SENSITIVE 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, MARCH 4-10, 2006 ¶1. (U) Summary: -- MEDRETE: Providing Care for the Poor -- Paraguay First to Ratify Environmental Accord -- Protesters Block Bridge -- Ex-Multibanco Directors Convicted -- GOP Ends Cuban Doctor Program -------------- MEDRETE: Providing Care for the Poor -------------- ¶2. (U) On 3/7 a team of 32 medical professionals from the U.S. military arrived in Paraguay to provide medical care for thousands of Paraguayans in the Department of San Pedro, roughly 216 miles northeast of Asuncion. The MEDRETE team is working in conjunction with 48 Paraguayan medical personnel to provide medical services in the cities of Lima, Santa Barbara, and finally Santa Rosa del Aguaray. The team has specialists in odontology, ophthalmology, and gynecology. During the ten day exercise, ending on 3/16, the team hopes to provide care for 1,000 Paraguayans a day, or 10,000 total. On 3/10 AMB Cason visited the MEDRETE team. San Pedro has been the site of peasant unrest in the past, had several of the departing Cuban doctors, and is Vicepresident Castiglioni's home area. -------------- Paraguay First to Ratify Environmental Accord -------------- ¶3. (U) Paraguay recently became the first country to ratify a Mercosur accord concerning the environment. The accord was written in 2004 during the Mercosur Summit in Puerto Iguazu, Argentina. It is intended to facilitate cooperation on environmental issues among the 4 countries. In recent months, an environmental conflict has been brewing between Argentina and Uruguay, the latter complaining that Argentine paper plants built alongside the banks of the Uruguay River are contaminating the water. Paraguay has also had problems with river contamination from Argentine paper plants. -------------- Protesters Block Bridge -------------- ¶4. (U) On 3/7 Protesters blocked the Friendship Bridge linking Ciudad Del Este with the Brazilian city, Foz de Iguazu, stranding thousands of Brazilians and Paraguayans on the wrong side of the border. The protest is in response to a recent increase in restrictions by Brazilian authorities on the movement of goods from Paraguay. Brazilian citizens have long taken advantage of the lower prices in Ciudad Del Este, buying electronics and other items then taking them back across the border to Brazil. However, Brazilian authorities claim that the bridge is also used to transport drugs, weapons, and counterfeit goods. Brazilian customs authorities have stated that they will only allow vehicles owned by authorized firms to carry goods across the border, a devastating blow to the estimated 1,400 taxi, van, and motorcycle drivers who regularly carry goods across the border at the behest of Brazilian buyers. On 3/8 the mayor of Ciudad Del Este and other local authorities arrived in Asuncion to solicit the intervention of Paraguayan President Nicanor Duarte. On 3/9 President Duarte criticized the Brazilian trade restrictions and announced his intention to meet with Brazilian President Luiz Inacio Da Silva to discuss the issue. On 3/9 the protesters declared a temporary lifting of the blockade, to last either until 3/13 or until they find out the results of President Duarte's meeting with his Brazilian counterpart. -------------- Ex-Multibanco Directors Convicted -------------- ¶5. (U) On 3/3 Pedro Daniel Miraglio and Enrique von Eckarsberg, ex-directors of the MultiBanco bank, were sentenced to 8 years for breech of fiduciary responsibility, inappropriate conduct in a crisis situation, and the favoring of certain creditors. They were absolved of the tax evasion charge. The court also failed to consider the application of a seizure of 4,900,000,000 guaranies (816,000,000 USD). Rocio Vallejo, the prosecutor for economic crimes, has stated that the GOP will insist on a seizure of their assets. The defense has consented to holding off their appeal of the sentence until hearing the court,s reasoning on 3/13. -------------- GOP Ends Cuban Doctor Program -------------- ¶6. (SBU) As it signaled it would do in February 2005, following the murder of a former President's daughter by leftist militants supported by FARC and other leftist foreign organizations and governments, the GOP ended the program that brought Cuban doctors to provide medical services in Paraguay's interior. 56 Cuban doctors departed on 2/25, which leaves between 10 and 16 unaccounted for, based on EmbOffs' knowledge of prior lists of participants. Paraguayan regional health officials complained that the Cuban doctors' departure would leave some rural communities without medical services. Many communities will receive Paraguayan doctors, some of whom were trained in Cuba through a GOC scholarship program. ¶7. (SBU) Comment: There is no shortage of doctors in Paraguay. The problem is how few want to work in the country's interior where conditions are more difficult. Pressure from unemployed Paraguayan doctors was one of the factors behind President Duarte's decision to end the Cuban missions. The GOC medical scholarship program continues. Additionally, Cuba recently began flying planeloads of Paraguayan campesinos from the conflictive Department of San Pedro to Havana for eye surgery. Venezuela provides the fuel to transport the scholarship recipients and campesino patients to Cuba. The USG annually treats thousands of needy Paraguayans through U.S. military medical training exercises (MEDRETEs). Continuing, if not expanding, the MEDRETE program here will serve as an important counterbalance to Cuba and Venezuela's disruptive influence in the countryside. Some of the Cuban doctors who are unaccounted for have likely defected. CASON