PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 7-13,

UNCLAS ASUNCION 000507

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/BSC, INL, 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
NAIROBI FOR MICHAEL FITZPATRICK

E.O. 12958: N/A
TAGS: PGOV PREL PINR PHUM PARM ENRG MCAP MNUC PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 7-13,
2006

REF: ASUNCION 0479


1. SUMMARY:
-- Paraguay Signs $35 Million Threshold Program
-- VP Hosts Conference on Nuclear Security
-- Another Patria Libre Member Captured
-- Ambassador Attends Book Fair

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Paraguay Signs $35 Million Threshold Program
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2. (U) On May 8, President Duarte, Millennium Challenge
Corporation Board Member Kenneth Hackett, and USAID Assistant
Administrator Adolfo Franco signed an agreement outlining the
terms for a $35 million MCA program with Paraguay. The
program will span 10 activities focusing on combating
impunity and informality. Paraguay will have two years to
implement the program and satisfy a wide range of performance
indicators before qualifying to be considered for a MCA
compact. Hackett, Franco, and Paraguayan Senior Advisor to
the President Carlos Walde met later in the day with members
from the NGO and business community on the TCP Advisory
Council who conveyed eagerness to assume their important role
in making the TCP program a success.

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VP Hosts Conference on Nuclear Security
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3. (U) On May 10, Vice-President Castiglioni hosted
speakers from the International Atomic Energy Agency (IAEA)
in Asuncion for presentations on Nuclear Security and the
need for Paraguay to develop an integrated nuclear security
plan. Peter Colgan, the representative from the IAEA's
office of Nuclear Security and Sophia Miaw also from IAEA in
Vienna were presenters at the conference. The one-day
conference allowed senior Ministers, military personnel, and
foreign embassies, as well as members from non-governmental
organizations to better understand Paraguay's role as a
transshipment country of nuclear materials and weaponry and
its need for a national plan on nuclear security. Several
key ministers such as Defense Minister Roberto Gonzalez,
Minister of Interior Rogelio Benitez, and Police Commander
Fidel Isasa were in attendance along with high-ranking
military and police officials. Following the senior-level
conference, technical experts gathered to develop Paraguay's
plan for nuclear security with assistance from the IAEA
experts.

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Another Patria Libre Member Captured
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4. (U) On 5/8, Gustavo Lezcano Espinola, a member of the
Patria Libre (Free Fatherland) Party (PPL),wanted in
connection to the Cecilia Cubas kidnapping and murder, was
arrested by Argentine authorities. Lezcano is the sixth PPL
member detained by Argentine after fleeing investigation in
Paraguay in hopes gaining refugee status from the government
of Argentina. On 5/2, five other members were arrested in
Argentina. Paraguayan authorities are still seeking to
apprehend Blas Franco and Angel Acosta Gonzalez, both also
under investigation for involvement in the Cubas Case.
(reftel)

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Ambassador Attends Book Fair
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5. (U) On May 10, the Ambassador joined Governor Enzo Cardozo
Jimenez in the City of Coronel Oviedo, located in the
Caaguazu Department approximately 85 miles east of Asuncion,
for the Third Annual Caaguazu Book Fair. The Ambassador

discussed with the participants the benefits of learning
English and promoted the possibility of scholarship
opportunities offered by the US Embassy. Special attention
was drawn to a new pilot English micro-scholarship pilot
project that was launched this week by the PD section to
reach out to their community. On May 9, a PD officer and an
FSN attended the fair and presented a paper show on
children's books as well as discussed Fulbright and other
scholarship opportunities.
JOHNSON