Identifier
Created
Classification
Origin
06TEGUCIGALPA853
2006-05-09 22:57:00
CONFIDENTIAL
Embassy Tegucigalpa
Cable title:  

WHA DAS MADISON MEETS WITH HONDURAN PRESIDENT

Tags:  PREL PGOV ECON ETRD KCRM SMIG SNAR PINR HO 
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DE RUEHTG #0853/01 1292257
ZNY CCCCC ZZH
O 092257Z MAY 06
FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2002
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0134
RUEHMD/AMEMBASSY MADRID PRIORITY 0460
RUEHBS/USEU BRUSSELS PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0102
RUEAHLC/HOMELAND SECURITY CENTER WASHDC PRIORITY
RHMFISS/DIRJIATF SOUTH PRIORITY
RUEPWJF/HQ BICE WASHDC PRIORITY
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RUEHIN/AIT TAIPEI PRIORITY 0181
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RUEAIIA/CIA WASHDC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUMIAAA/CDR USSOUTHCOM MIAMI FL//CINC/POLAD// PRIORITY
RUEAHND/CDRJTFB SOTO CANO HO PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 TEGUCIGALPA 000853 

SIPDIS

SIPDIS

STATE FOR D, E, AND P
STATE FOR WHA, WHA/PPC, WHA/EPSC, AND WHA/CEN
STATE FOR EAP/CM, EAP/TC, INL/LP, AND PRM
STATE PASS AID FOR LAC/CAM
NSC FOR DAN FISK
TREASURY FOR DDOUGLASS

E.O. 12958: DECL: 05/09/2036
TAGS: PREL PGOV ECON ETRD KCRM SMIG SNAR PINR HO
SUBJECT: WHA DAS MADISON MEETS WITH HONDURAN PRESIDENT
ZELAYA AND CABINET, PREPS FOR POTUS MEETING IN JUNE

REF: TEGUCIGALPA 809

TEGUCIGALP 00000853 001.2 OF 004


Classified By: Ambassador Charles A. Ford;
Reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 04 TEGUCIGALPA 000853

SIPDIS

SIPDIS

STATE FOR D, E, AND P
STATE FOR WHA, WHA/PPC, WHA/EPSC, AND WHA/CEN
STATE FOR EAP/CM, EAP/TC, INL/LP, AND PRM
STATE PASS AID FOR LAC/CAM
NSC FOR DAN FISK
TREASURY FOR DDOUGLASS

E.O. 12958: DECL: 05/09/2036
TAGS: PREL PGOV ECON ETRD KCRM SMIG SNAR PINR HO
SUBJECT: WHA DAS MADISON MEETS WITH HONDURAN PRESIDENT
ZELAYA AND CABINET, PREPS FOR POTUS MEETING IN JUNE

REF: TEGUCIGALPA 809

TEGUCIGALP 00000853 001.2 OF 004


Classified By: Ambassador Charles A. Ford;
Reasons 1.4 (b) and (d).


1. (C) Summary: WHA DAS Kirsten Madison visited Honduras
April 26-28 and met with Honduran President Jose Manuel "Mel"
Zelaya, key members of his cabinet, congress, and the
business community. Key themes of the visit included
cooperation on regional security problems such as
narcotrafficking, Honduras' relationship with Venezuela
including PetroCaribe, and the unique opportunity presented
by CAFTA, MCC, and debt relief for Honduras to reform its
economic reality and boost growth that will reduce poverty.
DAS Madison and AMB's frank points on Venezuela were tough
but necessary for the GOH to hear, as the GOH appears to seek
to straddle the U.S.-Venezuelan divide. While the visit
served as an excellent preparatory session for the planned
June 5 meeting with POTUS, Post will push the GOH to focus
more on specific issues Zelaya wishes to discuss. End
Summary.

Meeting with President Zelaya
--------------


2. (U) WHA DAS Kirsten Madison visited Honduras April 26-28
and met with Honduran President Jose Manuel "Mel" Zelaya, key
members of his cabinet, congress, and the business community.
The visit followed her visit to Nicaragua.


3. (C) DAS Madison met April 27 with President Zelaya in the
Presidential Palace. AMB, DCM, and PolChief accompanied DAS
Madison, and Vice President Elvin Santos, Foreign Minister
Milton Jimenez, and Minister of Public Security Alvaro Romero
accompanied President Zelaya. The meeting followed a private

dinner the night before with DAS Madison and EmbOffs with VP
Santos, Minister of the Presidency Yani Rosenthal, Minister
of Defense Aristedes Mejia, and Minister of Trade and
Industry Elizabeth Azcona. Zelaya noted that, as his
Administration approached the 100 day mark, he had already
tangled with transnational companies, gangs, the press, and
others. The president noted that he had maintained good
relations with the Catholic Church, the U.S. Embassy, and
local business groups. In his estimation, notable early
achievements were the extension of Temporary Protected Status
(TPS) for Hondurans in the U.S. by the USG, the
implementation of the Central American Free Trade Agreement
(CAFTA) on April 1, and international debt forgiveness.
Zelaya noted that the GOH had close counternarcotics
cooperation with the USG, especially the DEA, and sought to
strengthen the role of Soto Cano Air Force Base near
Comayagua (which DAS Madison had visited that morning). He
noted that narcotrafficking in La Mosquitia and along the
Nicaraguan border was a serious concern. The AMB noted that
DEA had developed a draft counternarcotics plan for the GOH
that the Embassy would share with Minister Romero.


4. (C) DAS Madison made clear the USG valued a close,
collaborative relationship and looked forward to the June 5
POTUS-President Zelaya meeting. She emphasized that the
POTUS looks for regional partners and would want not only to
discuss bilateral issues but also regional issues like what
can be done to bolster Nicaragua's democracy. President
Zelaya said that FM Jimenez would work with the AMB on agenda
items for the visit, saying that he would like to discuss
ranching/farming issues with POTUS. DAS Madison noted that
the Embassy would work closely with State and the NSC on the
agenda. DAS Madison said the USG hoped that CAFTA countries

TEGUCIGALP 00000853 002.2 OF 004


would use the agreement as a centerpiece in an effort to
break open still rather closed economic structures and to
extend prosperity to a broader segment of the populace, which
is essential to the long-term strength of the region's
democracies. DAS Madison stressed the importance of people
experiencing genuine positive change. She said that the
region must move the democratic, free market approach to the
next level, noting that although some try to characterize it
that way, the USG does not view the region in left/right
terms but in terms of whether or not leaders are leading
democratically and working to extend prosperity to their
citizens through open markets. She noted that in the
Millennium Challenge Account compact with Honduras
anti-corruption was a key benchmark. She said that she had
discussed this issue earlier the same day in a lunch with
Liberal Party, National Party, and Christian Democrat Party
members of the congressional leadership and EmbOffs. (Note:
She hit on many of the same themes in an April 28 breakfast
with leaders of business organizations and EmbOffs. End
Note)


5. (C) Zelaya said that there were three key problems
Honduras faced: (1) the energy problem - rise of oil prices
which affected the prices of energy generation,
transportation, and consumer goods, (2) levels of poverty
were too high - need to improve public investment in
improving the life of the poor; CAFTA is an instrument for
investment/economic growth, and (3) crime - social problems,
transnational crimes, and a loss of values; augmenting police
and social programs were key.


6. (C) The Ambassador highlighted the May 5-7 National
Security Strategy Workshop that the U.S. Center for
Hemispheric Defense Studies would conduct with the Minister
of Defense, FM Jimenez, and other senior GOH officials and
members of the Country Team. (Note: EmbOffs later learned
that due to his son's wedding, President Zelaya will not be
able to attend the closing presentation at the workshop. End
Note.)


7. (C) Zelaya said he wants to liberalize commerce,
monopolies, oligopolies, etc., noting that competition is
key. President Zelaya said he found state or private sector
monopolies problematic, saying they led to poor quality, high
prices, and corruption. The AMB said the USG wanted to help
on breaking monopolies and reforming the economic landscape.


8. (C) DAS Madison noted that Venezuela is a major U.S.
concern on three levels: the increasingly anti-democratic
behavior of the GOV in Venezuela, the negative impact of
Venezuela's activities on the dynamics in the hemisphere, and
the implications of the Venezuelan-Cuban axis for the
prospects of a genuine transition in Cuba. Zelaya said
Chavez is a populist. DAS Madison emphasized that USG views
CAFTA countries as partners, noting that there was concern
about the future of Nicaragua. She emphasized the importance
of robust support for Guatemala's UN Security Council
candidacy (vice Venezuela). Zelaya responded that he did not
believe in signing up for ideologies, noting that when
ideologies impede change they do not work. He underlined the
close friendship with the U.S. on commercial, social, and
political issues. Zelaya said that the GOH was democratic,
not populist. Zelaya indicated that the GOH was looking at
PetroCaribe, checking out its business terms, and noted that
the Dominican Republic had signed on to PetroCaribe. Zelaya
said that the GOH was pro-President Bush.


9. (C) The AMB said the U.S. buys oil from Venezuela.

TEGUCIGALP 00000853 003.2 OF 004


However, he noted that PetroCaribe would lead not just to
buying oil but taking on political commitments. AMB said
that there had been a series of problems with the Venezuelans
failing to comply with the terms of PetroCaribe. While
noting that high gas prices are problematic for lots of
countries, including the U.S., the AMB warned Zelaya to be
careful, and that a PetroCaribe deal could end up
disappointing the Honduran people when it failed. Zelaya
noted that the Ambassador had made an important point. The
AMB noted that Venezuela is offering an approach that is
meant to be an alternative to the CAFTA model.


10. (C) Zelaya noted that he and several cabinet members
would be going to Tujillo on the Caribbean coast for the May
4 visit of the USS Underwood. AMB noted the success the GOH
had had thus far on fighting forest fires and crop burning
fires, and congratulated Zelaya on the border demarcation
with El Salvador.

Meeting With Foreign Minister Jimenez
--------------


11. (C) In a meeting that immediately followed the Zelaya
meeting, DAS Madison, AMB, DCM, and PolChief met with FM
Jimenez in the Presidential Palace. FM Jimenez said Zelaya
wanted to adjust the rules of the game for private interests
to improve social conditions. He noted the high level of
cynicism in Honduras. Jimenez said that the GOH must change
the situation to avoid social conflicts that would put
democracy at risk. He said that there would be no negative
steps directed at investment, foreign or domestic. Honduras
has been a closed market and that will no longer work, said
the FM. Jimenez said that high profits have been made, such
as with electricity generators, but little of these profits
has been invested in Honduras.


12. (C) FM Jimenez had just returned from Spain where he met
with the Spanish FM. He said that he conducted good meetings
based on a strong bilateral relationship. The GOH sought
greater Spanish investment in Honduras. Jimenez said that
they talked about the UNSC race, and he made clear the GOH's
support for Guatemala's candidacy. He said the Spanish FM
said Spain would support the Central American position and
along those lines lobby the European Union to support
Guatemala's candidacy.


13. (C) The FM noted that Panama and the PRC were conducting
negotiations and that the GOP may officially change
recognition from Taiwan to the PRC. He said that PRC
representatives had recently visited and that the trade
relationship was key. Jimenez noted that the future of the
PRC/Taiwanese unification issues was an issue of concern for
the GOH. The FM welcomed an invitation from the AMB to meet
with State experts on the China/Taiwan issue the next time he
was in Washington. DAS Madison said she understood that a
Panamanian shift could change the level of pressure on the
GOH on this issue, but underlined that it was a decision that
cannot be made in a vacuum and that the GOH would want to
consider other factors before deciding any possible change in
recognition.


14. (C) On immigration, Jimenez said that the GOH had a
different position than Mexico and did not want the issue to
negatively affect bilateral relations. DAS Madison noted it
was important that regional immigration meetings not become
part of the immigration firestorm that would worsen the
already heated political debate in the U.S., noting that
POTUS was working to have balanced immigration reform.

TEGUCIGALP 00000853 004.2 OF 004


(Note: FM Jimenez did not attend the May 2 regional
immigration meeting in Washington; the GOH was represented by
its AMB to the U.S. End Note.)


15. (C) EmbOffs delivered demarches on the Proliferation
Security Initiative and the Venezuelan Government's treatment
of AMB Brownfield (septels). FM Jimenez said that the GOH
has always had good relations with Venezuela. He noted that
the fuel issue was an economic issue, and said PetroCaribe
would be a last resort. He said the GOH needed a resolution
of the high gas price problem. He noted that a Brazilian
energy delegation would be visiting soon, and that a Spanish
oil company was interested in the Honduran market. He noted
that Venezuela had not had an Ambassador to Honduras for the
last one and a half years, and still had not named one.

Positive Visit Includes Frank Talk on PetroCaribe
-------------- --------------


16. (C) Comment: DAS Madison's visit highlighted both the
positive aspects of the bilateral relationship as well as the
concerns the U.S. has regarding Venezuela's motivations in
the region, particularly with regard to PetroCaribe. It was
important for President Zelaya and his top advisors to hear
that POTUS is seeking not only progress on bilateral issues,
but also leaders willing to step up, to work with the U.S.,
and to play constructive roles in the region. The frank talk
on Venezuela was tough but necessary for the GOH to hear, as
the GOH appears to seek to straddle the U.S.-Venezuelan
divide (see reftel). Post will push the GOH to focus more on
the planned June 5 meeting. Despite assurances, as of May 4
during a discussion with AMB, it was clear that neither
President Zelaya nor FM Jimenez had done much thinking about
what issues Zelaya would seek to discuss with POTUS. End
Comment.


17. (U) This cable was cleared by DAS Madison.
Ford