PARAGUAY POLITICAL AND ECONOMIC UPDATE, MARCH

UNCLAS ASUNCION 000270

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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

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MEDRETE: Providing Care for the Poor
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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.

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Paraguay First to Ratify Environmental Accord
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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.

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Protesters Block Bridge
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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.

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Ex-Multibanco Directors Convicted
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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.

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GOP Ends Cuban Doctor Program
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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