SANTA CRUZ: ANXIETY ABOUT UNCERTAIN FUTURE

C O N F I D E N T I A L SECTION 01 OF 02 LA PAZ 000070

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: 01/11/2016
TAGS: PGOV PREL ECON EPET EINV ENRG SOCI ELAB BL
SUBJECT: SANTA CRUZ: ANXIETY ABOUT UNCERTAIN FUTURE

REF: A. LA PAZ 05 3771

B. LA PAZ 06

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


1. (SBU) Summary: Many Santa Cruz civic representatives,
stunned by the MAS's decisive electoral victory, are anxious
about Bolivia's uncertain future. Some believe the MAS
government will immediately begin dismantling the
market-based economic model while postponing (for tactical
reasons) its assault on democratic structures until the
Constituent Assembly - the real prize. In that connection,
Santa Cruz private sector leaders pleaded for U.S. support to
defend democracy and to build the institutional strengths of
the regional government ("prefectura"). Within the diversity
of Santa Cruz sentiment, which included significant pro-MAS
feelings, we heard little about the near-term prospect for
conflict between national and regional powers. End Summary.


2. (SBU) In a January 4-6 visit to Santa Cruz, poloffs found
civic and private sector representatives there stunned by the
decisive margin of the MAS's electoral victory, and still
trying to make sense of it. The MAS's majority share of the
national vote was one thing, many acknowledged, but its
unexpectedly strong showing in the department of Santa Cruz
itself -- almost 34% -- was quite another. (MAS sympathizers
in Santa Cruz told us that the party's support there was
unsurprising, and reflected the same frustration with an
unresponsive and corrupt political elite that had fuelled the
nationwide blowout.) A number of our Santa Cruz
interlocutors also expressed anger with the campaign of
Podemos candidate Jorge "Tuto" Quiroga, who they claimed had
taken the lowlands department for granted and, in
successfully "polarizing" the electoral field, had
nonetheless failed to articulate a compelling alternative
vision for Bolivia.


3. (SBU) Many Santa Cruz leaders expressed anxiety about the
uncertain future, for Bolivia and for their own region, under
a government led by Evo Morales. While they acknowledged
that the government should be given the benefit of the doubt
and that any proactive confrontation would be
counterproductive, they also suggested it was a question of
when, not if, the tidal wave -- of negative policy decisions
and attacks against regional interests -- would hit. Civic
leaders told us an early test of the government's intentions
would be whether President Morales honored his pledge to
allow the contract licitation for the massive Mutun iron
deposit to move forward under already established protocols
(ref A).


4. (SBU) Private sector representatives were also worried
about the government's plan to dismantle market-based
economic structures, in particular the (now infamous)
Executive Decree 21060 of 1985 that helped tame Bolivia's
then-rampant hyperinflation and set the country on the course
of privatization. Several business leaders told us that
undoing key articles of that decree, namely those enabling
businesses to hire and fire employees freely and allowing
prices for key goods to be set by the market, could prove
calamitous for the country's economic health.


5. (C) While skeptical about the MAS's democratic
intentions, many of our Santa Cruz interlocutors speculated
that the government would seek to avoid antagonizing its
alleged adversaries, including in Santa Cruz, during its
initial months in office. This tactical approach, they
suggested, would merely disguise the government's real aims
and seek to lull the opposition into complacency until the
establishment of the Constituent Assembly, which was the real
prize because it would define the future Bolivian state "for

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a generation or more." Many warned that the government would
spare no effort to control the process and shape the outcome
of the Assembly, and in doing so reveal its undemocratic
identity, "just like Venezuelan President Hugo Chavez."
Asked about VP-elect Alvaro Garcia Linera's request to the
Ambassador that the U.S. "be patient and give the government
six months before making judgments" (ref B),many suggested
this was part of the larger ploy.


6. (C) Given its importance, Santa Cruz leaders told us they
would now focus on the battle over the Constituent Assembly,
including the election of representatives and the definition
of its objectives. Private sector and civic representatives
pleaded for U.S. support in this connection. Several noted
the need to establish a "think tank" devoted to defending the
principles of democratic liberalism, which would eventually
re-emerge to challenge the MAS's bankrupt vision. Others
called for more direct assistance to strengthen the newly
elected regional government ("prefectura"),which they
claimed would serve as a bulwark against the future
government's anti-democratic assaults. Sounding a familiar
theme, several appealed to our shared democratic and
free-market values in calling for the U.S.'s help in facing
the coming challenge to those values in Bolivia.

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

7. (SBU) While the predominant note in Santa Cruz was one of
concern about an uncertain future, not everyone was
pessimistic. MAS partisans -- and there seem to be more of
them now than before -- told us that transforming the corrupt
power structure was long overdue, and claimed that those
interested in democracy should celebrate its clear advance
rather worry about its supposed retreat. Within the
diversity of Santa Cruz sentiment, we heard surprisingly
little about any near-term prospect for conflict between
national and regional powers. Several contacts whispered
that, if push came to shove, Santa Cruz could be pressed to
call for something more than mere autonomy, but nobody
predicted that that kind of confrontation was on the
immediate horizon.
GREENLEE