PARAGUAY POLITICAL AND ECONOMIC UPDATE MARCH 3 -

UNCLAS ASUNCION 000193

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/BSC, INL/LP (JIM HIDES)
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 PHUM PREL PTER PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE MARCH 3 -
9, 2007


1. (U) SUMMARY: Action Request, see para 2.

-- POTUS and the Mayor
-- Barakat Kidnapped
-- Better Health with Better Information
-- Journalist Attacked by Log Traffickers
-- Afro-Paraguayans Release Report

POTUS AND THE MAYOR


2. (U) POTUS, March 5 speech on the Americas was widely
covered in the local media. The POTUS mention of Villarrica
City and its recently-elected mayor as a model of
transparency and good-governance gained positive attention.
Villarrica is one of the best examples of many municipalities
in Paraguay that have used USAID assistance to improve
transparency and governance. USAID assistance to Paraguay
has helped over 50 municipalities increase accountability to
their citizens through transparent budgeting, improvements in
financial software, setting internal controls, and in some
cases, removal of corrupt public officials from office. In
2005, targeted municipalities increased property and
commercial tax collection by 104 percent in total dollar
terms (220% average increase per municipality),resulting in
an additional USD 2 million in revenue.

BARAKAT KIDNAPPED


3. (SBU) Muhammad Fayez Barakat was reported to have been
kidnapped March 6 in Foz do Iguazu, Brazil. The vehicle
Barakat was driving that evening was found abandoned in
Cuidad del Este, Paraguay. It was reported that family
members initially received ransom requests of USD 3 million
dollars. Paraguayan prosecutors and police are currently
investigating the matter. It is reported that negotiations
with the kidnappers has led to the ransom being lowered to
USD 2 million dollars. Rumors regarding those responsible
have shifted from local criminal elements to members of the
Lebanese community in the tri-border area or foreign
intelligence services, including the USG. (NOTE: The US Dept
of Treasury designated Muhammad Fayez Barakat as a Specially
Designated Global Terrorist December 6, 2006, for his links
to the Hizballah financial network in the tri-border area.
End Note). This is the third kidnapping in two weeks in the
tri-border area, but it is unknown if all three have been
carried out by the same group. Local investigators suspect
that the kidnappings could be the work of a gang of known
criminals operating in the area. RSO septel to follow.

BETTER HEALTH WITH BETTER INFORMATION


4. (U) The Minister of Health approved an executive
resolution creating a national program for strengthening
health information systems. This decision will establish
better health data that is cross referenced, and made more
accessible at all levels of government. Currently, there are
65 different health data sub-systems. Some of these function
and others don't and much of the data collected is
duplicative. USAID/Paraguay provided technical assistance to
help the Minister finalize the resolution and will assist in
its implementation. The Pan-American Health Organization
(PAHO),as part of a regional initiative supported by
USAID/LAC, is also providing assistance to this effort. The
goal is to integrate health information on a sector wide
basis in Paraguay.

JOUNALIST ATTACKED BY LOG TRAFFICKERS


5. (U) Alberto Nunez, a journalist for Cronica Newspaper, was
attacked by 12 illegal log traffickers March 4 in Capiibary,
San Pedro Department. The traffickers beat Nunez and
threatened his life in the Capiibary National Forest Reserve
for taking photographs. (NOTE: Paraguay has a long history
of human rights violations against journalists. In addition,
the deforestation in this region, as well as the rest of the


country, has been allowed to continue without little
interference from government authorities. End Note). Vicente
Paez, the Deputy General Secretary for the Paraguayan
Journalists Union (SPP) and journalist for the La Nacion
newspaper, noted that they are keeping a watchful eye on this
case.

AFRO-PARAGUAYANS RELEASE REPORT


6. (U) The Kamba Cua Afro-Paraguayan Association (AAPKC)
released a preliminary census report on Afro-Paraguayan
descendents March 9 at the Paraguayan-American Cultural
Center (CCPA). The report identified slightly more than
8,000 Afro-Paraguayans with most living in Kamba Cua, Central
Department; Kamba Kokue, Paraguari Department; and Emboscada,
Cordillera Department. The AAPKC was founded in 1999 and
advocates for the rights of Afro-Paraguayans against
discrimination in health, jobs, and education. Director Jose
Medina told PolOff that AAPKC intends to get more politically
involved to promote democracy and eradication of hunger and
poverty.
CASON