MORALES-SHANNON MEETING: PRESIDENT RECOUNTS

C O N F I D E N T I A L SECTION 01 OF 05 LA PAZ 000195

SIPDIS

SIPDIS

STATE FOR WHA A/S SHANNON AND PDAS SHAPIRO
STATE ALSO FOR WHA/AND
NSC FOR DFISK
USCINCSO FOR POLAD

E.O. 12958: DECL: 01/26/2016
TAGS: PGOV PREL ECON EPET EINV ENRG SOCI ELAB BL
SUBJECT: MORALES-SHANNON MEETING: PRESIDENT RECOUNTS
PERSONAL, POLITICAL HISTORY

REF: LA PAZ 006

Classified By: Ambassador David N. Greenlee for reasons 1.4d and b.


1. (C) Summary: Summary: In their January 21 meeting, WHA
Assistant Secretary Thomas Shannon told President-elect Evo
Morales the U.S. agenda in Bolivia reflected our larger
agenda in the region: consolidating democracy, promoting
economic growth through free markets and integration, and
protecting the democratic state by attacking organized crime,
terrorism, and drug trafficking. Shannon told Morales that
the U.S. was prepared to work with his government in support
of this agenda. Morales referred to his personal experience
and to the birth of his political movement, and spoke of
wanting to help Bolivia's marginalized indigenous majority
and to vanquish a political class that had repeatedly failed
to meet its promises to the people. He emphasized that the
MAS had emerged from the ground up, not from a group of
ideologues or intellectuals. He also reaffirmed the future
government's commitment to democracy, private property and
investment -- "to benefit all Bolivians" -- and reiterated
that the "cato" agreement had created peace in the Chapare
coca-growing region. Stressing that he had turned the corner
from opposition leader to head of government, Morales
underscored the importance of relations with the U.S. and his
openness to continued dialogue with us.


2. (C) Comparing Bolivia with South Africa, VP-elect Alvaro
Garcia Linera said the Morales government wanted to improve
the lives of Bolivia's poor and mostly indigenous majority,
and that the state would assume a strengthened role in taking
on this challenge. In a clear reference to Venezuela, Garcia
emphasized Bolivia had no intention of "importing other
countries' problems," only of resolving its own. He hoped
the U.S. would cooperate in securing "justice" for former
President Gonzalo "Goni" Sanchez de Lozada. Greenlee said we
appreciated Morales' openness, and suggested that bilateral
teams meet to discuss concrete issues and programs as soon as
the new government was prepared to do so.


3. (C) Morales was relaxed during the meeting. He seemed
intent on keeping space open for a policy dialogue that would
define the relationship. We should not underestimate the
difficulty of this challenge, or have any illusions about
Morales. However, we should engage with this government and
call its bluff at each turn. We can use such engagement to
bring other allies into the effort, and to try to drive a
wedge between Chavez and Morales. End Summary.

Morales' Sartorial Message
--------------

4. (SBU) WHA Assistant Secretary Thomas Shannon met late
January 21 with President-elect Evo Morales, on the eve of
the formal "transmission of power" ceremonies (held on
January 22),at Morales' residence in the Miraflores
neighborhood of La Paz. The relatively humble setting,
coupled with Morales' sartorial choices -- trademark striped
sweater and slacks (in addition to rose-colored plastic
sandals) -- underscored the subliminal message of the
meeting: that the future President is a simple man committed
to bettering the lives of the people. While clearly
fatigued by the frenetic activity of recent weeks, Morales
was also charged with enthusiasm by the turn-out and success
of the ceremony at the Aymara ruins of Tiwanaku, where he
received the "symbolic" mandate of Bolivia's and the
continent's indigenous peoples, earlier in the day. VP-elect
Alvaro Garcia Linera accompanied Morales. Accompanying A/S
Shannon were Ambassador Greenlee, DCM Robinson, Ecopol
Counselor Chapman and poloff Ludwig (note-taker).


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Morales' Personal/Political History
--------------

5. (C) A/S Shannon began by congratulating Morales for his
decisive victory in the recent democratic elections, and
wished him and the Bolivian people great success in the
future. The U.S. acknowledged the result as indisputable,
Shannon said, and would seek ways to work with the new
government in pursuit of our shared interests. After
thanking Shannon, Morales embarked on a 20-minute personal
history in which he stressed the seriousness of his work and
sincerity of his intentions on behalf of Bolivia's poor, most
of them indigenous. He noted that, according to the 2001
census, 62% of Bolivians were indigenous, Quechuas, Aymaras,
Guaranis or one of the country's many lowlands groups, and
that these people had been abandoned and forgotten by the
prevailing political system. Referring to his own childhood
in rural Oruro, Morales said there were no basic services
where he lived, no potable water, no electricity and no roads
to reach the makeshift schools that only went up to the third
grade in most cases. If we have blockaded, he exclaimed, it
has only been to force those in power to listen to our
legitimate social and economic demands.


6. (C) Morales then related the litany of failures of the
established system and its principal actors in government to
respond to the needs of the country's neglected poor. This
included negotiations with successive governments that,
Morales explained, never lived up to their side of the
bargain. He described the onset of privatization in the 80s,
with the now infamous Executive Decree 21060, which (he said)
caused the collapse of the mining industry and unleashed a
flow of migrants to other parts of the country, including the
Chapare where many former miners began growing coca. "The
Chapare is the synthesis of Bolivian poverty," he said, where
the economic failures of the system have been most
concentrated.


7. (C) Morales described how a 1994 agreement between
Chapare cocaleros and then-President Gonzalo Sanchez de
Lozada ended with the government, again, failing to comply.
At that point, he explained, "we asked ourselves if the
government would ever comply, and we decided that this would
happen only when we ourselves became the government." That
is how my political movement was born, which focused on land,
territory and economic issues, as well as coca. In this
connection, Morales explained that the Movement Toward
Socialism (MAS) was formed not by a group of ideologues or
intellectuals committed to an abstract political vision, but
by social sector and union groups in pursuit of concrete,
practical demands.

Key Issues
--------------

8. (C) Turning to the issues discussed in his previous
meeting with the Ambassador (ref),Morales said he was
prepared to work constructively on areas of shared concern.
He recounted that in the early 90s a journalist from
Cochabamba had congratulated him for having passed an alleged
investigation by the U.S. DEA, which he claimed had
discovered nothing untoward -- "no narco-trafficking or
womanizing or anything more serious than the occasional
beer." He noted that the "cato" per family coca set-aside
free from eradication had been a consistent demand of
cocaleros since 1994. Since the "cato" agreement was reached
with former President Mesa in 2004, he explained, there had
been no blockades, no deaths, no injuries and no problems in
the Chapare. He further mentioned the ongoing EU-funded
study on legal use of coca, and acknowledged separate
negotiations would be necessary to resolve the complicated
situation in the Yungas.

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9. (C) Morales emphasized that public and private investment
was necessary for the economy to grow. "I myself have
private property, including land and llamas." He said he had
told European leaders during his tour that Bolivia would not
confiscate property or expropriate their investment, but only
work to ensure that all Bolivians benefited from it. He
noted that his message must have gotten out because Repsol
and Total had announced their intention to withdraw the
arbitration trigger letters they had sent to the Bolivian
government last year. (Note: While newspapers reported this
last week, we have been unable to confirm that it is in fact
the case. End Note.) His chief aim, Morales explained, was
to improve the economic condition of Bolivians by creating
jobs. Noting that more than 80% of Bolivians worked in micro
and small businesses, he said his government would form a
Ministry for Small Businesses to foment further growth in the
sector. He also pledged that the government would implement
his announced salary cuts -- 50% for Ministers and other
high-level officials, as well as for legislators -- and
claimed this would help pay for needed investments in
education, "which the people are expecting."


10. (C) On U.S.-Bolivia relations, Morales explained that
after all the accusations he had turned the page. He fully
agreed with VP-elect Alvaro Garcia Linera on the importance
of this meeting (with U.S. representative Shannon) above any
other, and had in fact cancelled other scheduled meetings to
make room for this one. It is critical for us to have
relations with the world's most important power, he
explained, but in the context of mutual respect. "Before I
used to call for 'death to the oligarchy.' But I know I have
lots to learn." Joking that it turned out to have been
easier to become President than to realize his dream of being
a journalist, he said: "I see just how much responsibility I
have now. It's not like being a university student, when you
can be a radical. Now I have graduated." Morales then
emphasized his commitment to democracy, a fact highlighted in
the 84% voter turnout in the December 18 elections and the
majority support he received, and explained that the planned
Constituent Assembly would seek to change the country by
votes and not by violence. "We'd like your help in
accomplishing this," he said.

VP Garcia on Economic Plans, Venezuela, Goni
--------------

11. (C) In response to Morales' invitation, VP-elect Alvaro
Garcia Linera explained that the government had the simple
goal of overcoming the poverty of the majority. "66% of
Bolivians live with less that $600 per year; 45% on less than
$1 a day. We want to change that." He continued that many
Bolivians, most of them indigenous, were living in economic
conditions identical to those of the 16th century. "We want
to bring them into the 21st century." He explained that the
neo-liberal model was wrong in seeking to reduce and destroy
the state, because government was a necessary force in
promoting economic development. The result of the state's
decline had been increased regional, sectoral and ethnic
tensions that had come close, in the past five years, to
exploding into outright violence.


12. (C) Garcia explained that the Morales government would
strengthen the role of the state in Bolivia's development but
"not in an irresponsible way with leaps into the void."
Rather, given the failures of the market-focused system to
help the poor, the state would promote production, capital
development and more favorable conditions for small and
medium-sized businesses. It would focus political-economic
policies on the neglected majority, to begin including them
in the system. It would start with the internal market, and

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also engage selectively with markets outside of Bolivia. "We
are not trying to deny the reality of globalization," he
explained.


13. (C) Garcia said Morales' political project of expanding
democracy had found a propitious moment, and had to be led by
a Bolivian of indigenous ethnicity. What has happened here,
he explained, is similar to the downfall of Apartheid in
South Africa. "A racist system has been defeated, and the
only surprise was that it didn't happen earlier." This is a
great democratic achievement, fully compatible with the
democratic values of the U.S; there is more equality, more
opportunity and more dignity now in Bolivia than there was
before. The tensions will be resolvable, he said. "We are
fully open to dialogue, we will acknowledge our mistakes; and
hopefully you will too."


14. (C) In a clear, if veiled, reference to Venezuela and
Cuba, Garcia stated that the Morales government would not
bring the conflicts of "other countries" into Bolivia. "We
have enough problems of our own to solve," he explained, "and
do not need any more." He said the government was interested
in ensuring the health of its alliances with the U.S. and
European partners, and hoped to continue receiving the aid on
which Bolivia depends for its education, health and
infrastructure needs - "but with the aim of shedding the
dependency and standing on our own two feet."


15. (C) In closing, Garcia raised the issue of the trial of
former President Gonzalo "Goni" Sanchez de Lozada. He noted
that justice for Goni was an important social sector demand
and a central message in the MAS's own campaign. He
promised, somewhat incredibly, that the Morales government
would allow justice to take its own course, without pressure
or interference, but said the ball was in the court of the
U.S. at this moment. (Comment: Judging from his remarks,
Garcia appeared to believe, wrongly, that an extradition
request for Goni had already been made to the U.S. End
Comment.) Garcia praised the integrity of the U.S. justice
system, and hoped we would cooperate in ensuring that justice
took its course in the Goni case.

Shannon Underscores U.S. Priorities
--------------

16. (C) A/S Shannon thanked Morales and Garcia for their
expressions of openness, and reiterated that a similar
disposition existed on the U.S. side. Using inter-agency
agreed upon red lines, Shannon then walked Morales through
our primary interests in Bolivia and the region:
consolidating democracy, promoting economic development, and
protecting the democratic state.


17. (C) Regarding democracy, Shannon referred to his
personal experience in South Africa as labor attach, saying
the transition to post-Apartheid democracy there had
succeeded, averting the prospect of civil war, in large
measure thanks to the leaders' respect for democratic
institutions and fundamental human rights. Institutions were
vital, he explained, in preserving democracy and freedom, and
the U.S. was interested in working with the Morales
government to consolidate Bolivia's democratic institutions.
Combating poverty was also a high priority for the U.S., he
explained. The U.S. did this by opening our markets to
Bolivian and other countries in the region, and by seeking
ways to promote economic opportunity. He explained that the
state could play a key role in this respect, if it avoided
creating dependencies rather than opportunities. He noted
that respect for private property, rule of law, and
successful dispute resolution were vital components of
economic growth.

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18. (C) Another key U.S. goal in Bolivia, Shannon continued,
was defending the security of the democratic state from
international crime, terrorism and narcotics trafficking.
He acknowledged that aspects of the U.S.' counter-narcotics
strategy were controversial in Bolivia, but noted they had
been vital in protecting Bolivia from predatory drug cartels.
He believed cooperation on a mutually satisfactory basis was
possible. In this respect, he noted that U.S.-supported
eradication efforts did not target legal coca, which was part
of Bolivia's traditional culture, only that excess coca which
was destined for manufacture as cocaine. Shannon emphasized
that the U.S. was willing to work together with the future
government in pursuit of our shared interests to counter
cocaine production and trafficking, and hoped we could reach
agreement on this front soon.


19. (C) The Ambassador praised Morales for creating a
positive atmosphere that facilitated the possibility of
future cooperation. He noted their important first meeting
two weeks ago, and Morales' progress since that time in
assuming a practical stance, moderating the rhetoric and
demonstrating openness to dialogue. Acknowledging that
entrenched poverty in "deep Bolivia" had gone unaddressed in
the four decades he has known the country, the Ambassador
emphasized that "we want you to succeed" in changing this.
He further explained that, while we surely had ideological
differences with the future government and were likely to
disagree on specific issues, we were willing to seek ways to
work together. The Ambassador suggested that bilateral teams
meet to discuss the range of concrete issues and programs
before us as soon as the government is prepared to do so.
Morales agreed.

Comment:
--------------

20. (C) Morales used the meeting to convey that he is open
to dialogue with the U.S. on key issues including
counternarcotics. We should engage him and his government,
recognizing that this will be a difficult challenge given his
past and the ideology of many of his supporters. Still,
engagement will help us to enlist other allies in the effort
and will also allow us to try to drive a wedge between Chavez
and Morales.


21. (U) A/S Shannon cleared this message.
GREENLEE