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07BRASILIA759 2007-04-30 15:22:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Brasilia
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DE RUEHBR #0759/01 1201522
P 301522Z APR 07
					  UNCLAS SECTION 01 OF 05 BRASILIA 000759 




E.O. 12958: N/A

1. (SBU) Summary: As Virtual Presence Post Officer, Econoff visited
Manaus, State of Amazonas from April 16-19 for public outreach and
economic-related meetings. While there, she visited the U.S.
Consular Agent in Manaus, the U.S. Chamber of Commerce-Amazonas, and
the bi-national center, Instituto Cultural Brasil-Estados Unidos
(ICBEU), in addition to meeting with several environmental
scientists. Econoff also conducted public outreach with print,
television and web-portal media, received an introduction to
administrators of the free trade zone area (SUFRAMA), and delivered
a presentation to the U.S. Chamber members on visas and our USG-GOB
cooperative efforts on biofuels. Her interlocutors expressed
concern over the potential environmental and social impacts of
increased sugar cane cultivation desired for ethanol production and
the reconstruction of a highway through the rainforest to Porto
Velho. Manaus revealed itself to be a city in transition, with its
own increasing development, environmental and social concerns.
Finally, despite the U.S.'s continuing status as the number one
trading partner for the Manaus free trade zone, there are challenges
for this entity to overcome in attracting continued U.S. foreign
direct investment to the region - rather than being diverted to
other areas of the country by promises of tax preferences. End

A River Runs Through It


2. (U) Manaus, on the north bank of the Rio Negro, has about 1.65
million habitants -- not a small city, despite the image that "the
Amazon" conjures up in most people's minds. Manaus is famous for
the Meeting of the Waters, where the Rio Negro meets the Rio
Solomoes. The tour, offered by several operators in the region,
enables one to see the striking demarcation between the two rivers.
Originating in Colombia, the Rio Negro, as its name suggests,
consists of darker waters, whereas the Solomoes -- originating in
the Andes of Peru (where it is known as the Maranon) -- is both
colder, faster moving, and lighter-tan in color. It takes
approximately eight to ten kilometers of co-mingling, farther
upriver, before the waters truly merge into one and eventually
become what is commonly referred to as the Amazon River.

3. (U) Little, from goods to people, gets brought into or out of the
region without using these waterways. Present throughout the river
are some very large boats and barges, often transporting cargo and
petroleum products, as well as smaller fishing and ferry boats.
Petrobras-affiliated gasoline/diesel vending boats, as well as some
generic mom-and-pop enterprises, are anchored at various parts of
the river for boats to refuel. In the smaller igarapes, or
tributaries, houseboats are docked singly or in multiples, often
appearing to house a large extended family between three or more
boats, among which the family members hop freely. The river is free
of bridges in this area, but ferries travel every half hour at
certain points between the other side of the river to bring workers
and vehicles to and from Manaus. Torrential rains the previous week
had caused many people in the region to lose their homes. The
river's water-level was fairly high as a result. In the dry season,
however, special navigators are employed who are well-versed in the
oft-changing depths and the location of sand bars that can inhibit
the movements of some of the larger boats.

4. (U) Manaus has some big-city problems, among them increasing
crime, transportation issues, pollution of the igarapes, and a
population who does not want to submit to government efforts to move
them out of where they have set up ramshackle homes on the river's
and igarapes' banks. Even when they are offered free, comparatively
nicer housing, many stubbornly stay put. They often do not want to
leave the conveniences of the city, and their friends and family
around them, and easier access to food and water only to be moved
out to the outskirts and incur higher transportation costs and more
difficult access to necessities. The problems of pollution of the
igarapes within the city limits, unemployment, and the general
gentrification struggle are ongoing. Traffic and transit delays
continue to increase as well. Estimates are that each month, 100
additional cars are being introduced into the city, congesting the
historic, narrow streets and creating chokepoints on even narrower
bridges over the igarapes.

BRASILIA 00000759 002 OF 005

Consular Agency Manaus


5. (SBU) Sherre Prince Nelson has been in the city for 27 years and
U.S. Consular Agent since 2004. She runs a small, welcoming office
for a large consular district whose constituents are widely
dispersed. The district has about 1,400 U.S. citizens, some of whom
reside well in the interior of the Amazon as missionaries.
Recently, since the announcement of a new policy permitting
Brazilian visa applicants to go to any consulate for their
interview, Sherre has been inundated with phone calls from local
Brazilian residents who do not understand that she is a consular
agency for U.S. citizens, not a consulate with visa adjudication
capability. Econoff tried hard to clarify this distinction through
media interviews and conversations during the rest of her week in

Public Outreach Efforts


6. (U) The overwhelming preoccupation of most people in Manaus with
whom Econoff spoke about the United States is -- as is often the
case in Brazil -- our visa process. From high-school students to
the elderly, many didn't understand the particulars, complained
about the cost, time, and distance required to travel to Brasilia to
interview, and in general, indicated that they feel the process is
onerous and one-sided. Brazil currently has some of the longest
non-immigrant visa interview wait times in the world, and this is in
no small part due to the increasing value of the Real relative to
the dollar; demand for interviews has increased 90 percent over the
last two years. Econoff conveyed this information so that people
could better understand the stresses on Mission Brazil's capacity,
and tried to mitigate the negative with the news that, as of April
2, Brazilians may apply in any of our four issuing consulates --
Rio, Sao Paulo, and Recife -- and no longer just in Brasilia. To
dispel some of the other common myths of the process, Econoff
informed the inquirers that the majority of visas were approved last
year -- 76.8 percent, according to consular section-provided
statistics -- and reassured people that Brazilians were not being
unfairly singled out; rather, that the new processing requirements
were put into place worldwide following September 11. She
emphasized the need for strong economic and social ties to Brazil
for non-immigrant visa applicants.

7. (U) ICBEU's gracious hospitality enabled Econoff to speak for 20
to 30 minutes at a time with four separate English classes, with an
audience ranging from adults to high-school level students. She
answered their questions on a wide variety of topics: everything
from the usual visa questions, to the words of a nursery rhyme that
one girl liked to sing to her little sister (Econoff was exhorted to
actually sing the rhyme for the other students who did not know it
and unfortunately for them, she did); studying and living in the
U.S.; her own background; how different some of our states are; the
electoral college process; biofuels cooperation; environmental
issues; and finally, the tragedy at Virginia Tech and related
questions on gun control. Only a few students in each class had
traveled to the U.S. before, and many of those trips had been
limited to Disneyworld. A tour of the facilities revealed a
well-equipped library, innovative instructional tools, and even a
little museum of sorts filled with pictures and memorabilia of the
founders and events held by ICBEU during the past 50 years,
including several photos of former U.S. Ambassadors and other
visiting American dignitaries.

8. (U) In media interviews on 19 April with local newspapers "A
Critica" and the "Jornal do Commercio," as well as the Globo
network's Portal Amazonia webchat and a subsequent on-camera
interview, Econoff discussed visas, USG-GOB cooperative information
exchange on biofuels and third-country efforts, and the positive
impacts of the visits of President Bush to Brazil and President Lula
to Camp David. Not surprisingly, most of what made it into print
centered on the visa process.

9. (U) Finally, Econoff was the featured speaker at a meeting of the

BRASILIA 00000759 003 OF 005

U.S. Chamber of Commerce-Amazonas, held at the Genius Institute of
Technology in the Industrial Sector. She presented a PowerPoint
slideshow that briefly recapped her visit to Manaus, provided
information and general advice on the visa application process, and
discussed cooperative efforts on ethanol before taking a number of
questions. Despite a relatively small turnout -- only 20 or so
people were able to make it due to other events that evening -- the
audience was welcoming and appreciative, and asked some questions.
The hosts, Genius Institute, offered to host someone from the
Embassy for another talk in the future (they provided the venue free
of charge to the U.S. Chamber.)

Environment-Related Meetings


10. (SBU) Environmental organization representatives commented on
the oft-repeated assertions by the GOB that sugarcane cannot be
grown in the Amazon region and therefore, the expansion of Brazil's
ethanol production poses no environmental threat or impact to the
rainforest. While the different environmentalists and ecologists
agreed with the viability of sugarcane cultivation in the Amazon,
they felt that it was not a given that there would be no impact.
Two interlocutors, from the Instituto de Pesquisas Ecologicas (IPE)
-- a USAID Environment Program partner-and the Fundacao Vitoria
Amazonica (FVA), indicated that there are still other significant
concerns. Ethanol, they asserted, would promote areas of
monoculture in Brazil. Additional worries they expressed were:
that by virtue of development of sugarcane fields, fewer resources
would be designated for other crops and agricultural prices would
rise; that a job-related migration would ensue which would have
other unforeseen economic and ecological effects; and finally, that
sugarcane labor on some plantations is tantamount to slave labor,
with large-scale employers that are far from the "heroes" that Lula
has recently called them.

11. (SBU) Eduardo Badialli from IPE, a former State International
Visitor and USAID contact, talked about strategic planning needs,
and defined a few principal threats to the region. First, he said,
there has been a general lack of success in inhibiting illegal
logging. "Many poor people cut down and work with illegal wood
because they don't see any alternatives for earning a living," he
said. He admitted that education and conservation efforts are a
difficult balance to achieve; the indigenous peoples who live in the
Amazon region are gatherers, not planters, and IPE and other
organizations are trying to respect and not change that culture as
much as possible. That said, his organization is involved in
education efforts, primarily with elementary school kids and
teenagers, but also with university students. They are also
investigating ways to develop and sustain ecotourism while
minimizing its impact, taking lessons from Ecuador and Costa Rica.
Badialli cited as another significant problem the lack of
integration of the public policies of the various governments
involved in the region-federal, state and municipal. IPE relies on
assistance from the World Bank, German banks, and the WWF.

12. (U) Carlos Durigan, an interlocutor from the Fundacao Vitoria
Amazonica, indicated that the majority of their support to date has
come from WWF-Brasil, Ford Foundation, and the Moore Foundation, but
that it is always a continual fight for resources. They have 20 to
25 technicians contracted, and those technicians take monthly trips
out to the remote parts of the region. There are also demands on
their time to participate in fora in other cities. The FVA has
enjoyed a very close relationship with the Instituto Nacional de
Pesquisas Amazonicas (INPA) for funding and for training (many FVA
scientists were trained by INPA for their master's or doctorates.)
Like the other environmental interlocutors, Durigan believes that
while ethanol development may not encroach upon the forest, it will
still impact other land development and have social ramifications.

13. (U) For example, Durigan is worried by the increased development
of large-machinery farms rather than those employing manual labor.
As he said, it promotes inequality and leads to a further
concentration of people into the cities. He agreed with Badialli
that policy coordination is important, and said that even if
something is guaranteed protected by law, the reality can be

BRASILIA 00000759 004 OF 005

different or have detrimental, unforeseen effects. He cited a
petroleum refinery near the Meeting of the Waters as an example,
saying there has been some pollution problems, and that some
regional environmental measures have either been enacted too slowly
to avoid problems, or in contrast, so quickly that they were not
well thought out.

14. (U) Another group, the Fundacao Paulo Feitoza (FPF), would like
to develop biofuels from babacu (pronounced bah-bah-SOO) (palm nut)
indigenous to the region, and foresees good benefits for several
indigenous communities in terms of employment. They would be
culling a naturally occurring product which can be used for various
purposes in addition to the oil for biodiesel. This sustainable
development project has, unfortunately, become a victim of lack of
funding. The project is estimated to cost only R$160,000
(US$80,000) but there does not seem to be significant hope right now
in attracting any more GOB investment, or from their usual sources
of support in the region, manufacturing and high-tech companies.
Foreign investment has so far not materialized for this project.
The foundation, which also has other research and development
projects related to computer voice processing for the deaf from sign
language and cell phone voice recognition and game software, was
recently forced to lay off staff. Even our interlocutor is only
employed there part-time on a consultant basis.

Highway to . . . ?


15. (U) Environmentalists also view warily the planned resurrection
of the BR-319 highway between Manaus and Porto Velho, the capital of
the State of Rondonia (the route between the two has been washed out
and the only major paved road from Manaus leads north, to Boa Vista
and eventually, Caracas). It is feared the reconstruction of this
road will create a "fishbone effect" of development along the sides
of the highway, thereby creating some increased settlements, and
related deforestation due to illegal logging and mining. While
parks have been created along the sides to try to protect the land,
enforcement is difficult and people, particularly those who already
live in the interior, just tend to move in and plant their families
and makeshift dwellings. In addition, the long-term viability of
this road is seen as suspect, particularly when combined with
current practice in Brazil of awarding construction and paving jobs
to the lowest bidder without much forethought as to the quality and
durability of the final product, along with a lack of funds for
continued maintenance. The U.S. Chamber interlocutors indicated
that they have heard that mega-trucks -- extremely long, heavy
trucks resembling mini-trains -- were being proposed to carry goods
on this highway, and that there was significant doubt that the
highway would be able to handle the traffic or weight of the trucks.
Many people are clamoring for a railroad to be built instead, but
even if that were to occur, it could also suffer problems due to
heavy rains and associated issues.

Helping Hands Needed


16. (SBU) SUFRAMA, the free trade zone ("zona franca") authority in
Manaus, indicated its desire for increased dialogue with Mission
Brazil. They want to increase U.S. investment and also educate
potential investors about how a free trade zone can help them. The
list of international companies that already operate there is quite
impressive, and includes Nokia, Philips, Siemens, Brastemp (a
Whirlpool subsidiary), and even -- surprisingly -- Harley-Davidson.
The latter's motorcycles made in the zona franca are only sold in
Brazil, but still sport the crucial logo and name-brand that
motorcycle aficionados crave. That said, operations for these
companies can cease and move very quickly due to tax incentives
offered by areas like Sao Paulo.

17. (SBU) The U.S. Chamber of Commerce-Amazonas also indicated it
needs support to maintain its membership and, hopefully, grow. A
planned visit from the U.S. Chamber of Commerce-Sao Paulo on April 2
had to be canceled due to aviation delays and bad weather, and now
has been tentatively rescheduled for June 5. They hope that the
much larger organization in Sao Paulo can essentially take them

BRASILIA 00000759 005 OF 005

under their umbrella, and help them with contacts, PR, and support,
particularly as some of the manufacturing in Manaus has been
siphoned away to Sao Paulo due to various tax incentives that the
latter is offering to businesses.

Travel Challenges . . .


18. (U) Flights have gotten better from Manaus to some places.
Miami now has daily direct flights on TAM and another option with a
stop in Panama City, on Copa. That said, domestic travel, just as
everywhere in Brazil these days, can be problematic and may involve
one or more stops. Econoff thus experienced first-hand what visa
applicants may deal with. She arrived in Manaus nearly two hours
late, at 1:30 AM. The return overnight flight to Brasilia entailed
a missed connection, two stops, and arrival two hours later than
scheduled. Rest on these overnight flights is difficult due to
frequent take-offs and landings.

. . . But a Very Positive Experience Overall


19. (U) Manaus may be isolated, but it is warm in more ways than
just its physical climate. Econoff found the people there friendly,
welcoming, and eager for more contact with the U.S.