PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 3 -

UNCLAS ASUNCION 000605 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 PA SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 3 - JUNE 9, 2006 REF: A. ASUNCION 0507 ¶B. ASUNCION 0589 ¶1. (U) SUMMARY: -- Ambassador Signs Environmental Agreement -- Duarte Plans Meeting with Ministers on MCA -- Coordinating Anti-TIP Efforts -- Paraguay's Ambassador to Argentina Removed -------------- Ambassador Signs Environmental Agreement -------------- ¶2. (U) On 6/7, the Ambassador signed an agreement that names Paraguay as a recipient of USD 7.4 million under the Tropical Forest Conservation Act of 1998. The agreement is a bilateral initiative based on the 1991 Enterprise for Americas Initiative which allowed countries to convert their foreign debts into funds directed towards programs to support child survival and environmental conservation. The signing ceremony for the Tropical Forest Agreement and the Debt Reduction Agreement took place at the Palace of the Government, and President Duarte Frutos signed the agreement as a witness of honor. Acknowledgment was also given to Vice President Castiglioni, Ministry of Finance, Ernst Bergen, Ministry of Foreign Relations, Leila Rachid, Ministry of Environment, Alfredo Molinas, as well as other Ministries, Congressmen, and Senators, national and local authorities, other ambassadors, and representatives from NGOs, civil society, the private sector, and cooperative agencies. The agreement marks a commitment between the governments of both Paraguay and the United States to work together to ensure conservation of tropical forests in the Atlantic Forest of the Alto Parana. The agreement entails a partnership between public and private sectors, led by civil society and local communities, to identify specific goals for conservation and then mobilize the community to institute creative solutions. Congress must ratify the act by 9/29, which USAID representatives in Asuncion believe to be likely. -------------- Duarte Plans Meeting with Ministers on MCA -------------- ¶3. (U) Minister Walde and Victor Sosa briefed President Duarte on the Millennium Challenge Account Threshold Country Program for Paraguay approximately two weeks ago. Victor Sosa, Technical Director of the program, reported that the President seemed very excited about the matter. Duarte indicated that he encourages all seventeen ministries involved to honor their commitments under the program. Victor Sosa also reported that in order to accomplish this goal the President plans to meet with all seventeen ministries this month. The MCA is a USD 35 million program that will span 10 activities focused on combating impunity and informality. The program will be implemented in two years and Paraguay must satisfy a range of performance indicators in order to be considered eligible for a MCA compact. (ref. A) -------------- Coordinating Anti-TIP Efforts -------------- ¶4. (U) Post has made a concerted effort to coordinate its anti-TIP work with other key players from the international community. In recent weeks, PolOff met with Bernardo Puente, International Labor Organization Country Representative; Vivian Argueta, Inter-American Development Bank Representative; and Dr. Luis Bogado Poisson, Director of the International Organization of Migration, to set the groundwork for a larger meeting among all donor NGOs and Embassies that assist the GOP on anti-TIP efforts. The planned purpose of this future meeting is to better coordinate and concentrate funding to support the critical need areas in the fight against TIP. PolOff through numerous conversations with GOP officials identified some of those critical needs in a recent request for additional funding. (ref. B) -------------- Paraguay's Ambassador to Argentina Removed -------------- ¶5. (U) On June 3, FM Rachid removed Orlando Fiorotto as Paraguay's Ambassador to Argentina. In the course of hearings held in Argentina the prior week by Paraguay's Truth and Justice Commission which is investigating abuses committed during General Stroessner's dictatorial regime, Fiorotto was accused of being an informant during Stroessner's regime. Fiorotto denied the charges and insisted that Rachid and several Colorado Party members had targeted him for seeking to fire Paraguay's well-connected minister counselor in its Embassy in Argentina. Upon his return to Paraguay, Fiorotto announced plans to run for mayor of Asuncion in elections scheduled for November. CASON