POTOSI MAYOR: A POTENTIAL CHALLENGER TO EVO?

C O N F I D E N T I A L LA PAZ 002607

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/29/2017
TAGS: ECON PGOV PREL BL
SUBJECT: POTOSI MAYOR: A POTENTIAL CHALLENGER TO EVO?

REF: LA PAZ 02217

Classified By: EcoPol chief Mike Hammer for reasons 1.4 (b) and (d).

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Summary
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1. (C) On September 18, Emboffs visited Potosi Mayor Rene
Juaquino who is emerging as a potential (albeit long-shot for
now) alternative to President Evo Morales. Juaquino who is
Quechua, the largest indigenous group in Bolivia, is
considered by most observers a very effective politician and
city manager. The mayor discussed a host of issues: the
mining sector, the Constituent Assembly, the government's
recent attacks on USAID, the state of President Morales'
Movement Toward Socialism (MAS) party, his Alianza Social
(AS) party's platform, and his negative views on Venezuelan
aid. The government appears to be taking Juaquino seriously,
at least in its own special way. On September 6, President
Morales fingered Juaquino as part of a plot to topple his
administration. While the charges appear totally unfounded,
if Juaquino were not a serious political threat, Morales
would not have brought up the Potosi mayor's name. With a
mostly centrist political, economic, and social agenda,
Juaquino strikes us as a future leader more in synch with
modern political outlook. End Summary

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Defending USAID
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2. (C) The mayor vigorously defended USAID, arguing the
central government's recent attacks were meant to distract
public opinion from the many problems the country is facing
due to President Morales' mismanagement. Juaquino discounted
as "completely false" the government's assertion that USAID's
democracy programs are part of a conspiracy with the
opposition to destabilize the Morales administration. He
stated that his municipality had worked with USAID for eight
years, and that he had never once heard talk of partisan
politics within USAID's programs. Citing numerous USG funded
initiatives -- including projects to prevent child mining,
food for the hungry, and health programs -- Juaquino stated
he and his constituents have a very positive image of USAID.
In fact, he asked if USAID could help him with the renovation
of the historical yet dilapidated mayor's office building.

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The State of The MAS
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3. (C) Juaquino provided a reasoned critique of the ruling
MAS party, and identified a number of the party's weaknesses.
Juaquino called the MAS a "situational project," implying
that it was simply a response to the series of crisis
impacting Bolivia at the start of the twenty-first century
and not a real political party. He mentioned that many
groups have abandoned the MAS, including teachers angry over
unfulfilled salary increases, and doctors who have been
marginalized by the government's constant focus on Cuban
doctors. He mentioned, once again, that cooperative miners,
who were once MAS stalwarts, now oppose the government for
its bias toward state-paid miners. The mayor also noted the
abundance of traditional leftists and the lack of indigenous
faces in President Morales' cabinet (with the exception of
Foreign Minister David Choquehuanca). He emphasized that
indigenous groups, such as CONAMAQ, are frustrated by their
lack of representation in the government and are preparing to
break with the MAS. Juaquino also mentioned inflation and
drugs as other threats to Morales, government.

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Venezuela: Achilles Heal for Morales?
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4. (C) Mayor Juaquino also spent considerable time
explaining that Venezuela is a potential Achilles heel for
Morales' government. Juaquino opined that most Bolivians do
not care for Venezuela's role in the country, stating that
many reject Chavez's "meddling" because it is an affront to
Bolivia's sovereignty, while others simply reject it for
ideological reasons. The mayor stated very few (perhaps 3
percent of) Bolivians actually applaud the assistance.
(Comment: A May 2007 Ipsos Apoyo poll suggests that Juaquino
is underestimating the amount of people who support Chavez's
role in Bolivia, given that 38 percent called Venezuela the
country "most friendly" to Bolivia. End Comment). He
continued by stating that political parties who take an
anti-Venezuela line (i.e., make Venezuela a campaign issue)
will tap into a broad base of support. He stated the
anti-Venezuela strategy should focus on: the opaque nature of
Venezuela's aid, that Venezuelan assistance will stop if/when
Hugo Chavez is no longer president, and Chavez's degrading
treatment of Bolivia with an emphasis on how Chavez makes
President Morales look like his puppet.

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Juaquino's Party: Alianza Social
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5. (C) The mayor then spoke about his political party, the
Alianza Social (AS). He explained that AS is no longer a
local (Potosi) party, and that it enjoys a broad base of
support. Juaquino stated that his party was not a populist
party (like the MAS),rejects the MAS' "statist" vision and
most of the MAS' Constituent Assembly proposals (see
paragraphs 8-10). Juaquino explained that he is trying to
establish a national campaign, and therefore is traveling
around the country to garner support. He mentioned that he
and his party have a message that resonates with average
Bolivians, citing a recent poll that shows that in Potosi he
enjoys 75 percent approval, while President Morales registers
only 25 percent. Juaquino understands that he is not ready
to challenge Morales today, but wants to build a national
following to take him on in the future.

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State of the Mining Industry
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6. (C) As Potosi (city and department) remains the
epicenter of Bolivia's mining industry, the conversation also
touched on the state of mining. Juaquino mentioned that the
recent global rise in commodity prices has resulted in an
economic boom for Potosi department. The mayor explained
that just two years ago, the prefecture budget was no more
than USD $40 million, while today it approaches USD $1.3
billion. Juaquino projected that Potosi's exports would soon
(in the next two years) exceed all other departments.
Responding to a question about the central government's
proposed mining law -- which would raise taxes significantly
and threaten the profitably of U.S. companies (especially
Apex Silver) ) Juaquino responded that the government "goes
after (all) companies that are profitable." Juaquino
mentioned that Coeur D'Alene is likely "safer" because it has
an agreement in place with cooperative miners.


7. (C) Comment: Juaquino likely called Coeur D'Alene safer
in terms of the possibility of the oft rumored government
"nationalization" of private mining projects. With
cooperative miners on the side of Coeur D'Alene, the
government would have a harder time, pushing through a
"nationalization" of Coeur D'Alene's San Bartolome project.
Coeur D'Alene is also "safer" in terms of proposed tax
increases since the government's plan focuses on concentrate,
whereas Coeur D'Alene's mine produces metal, reftel. End
Comment.

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State of the Constituent Assembly
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8. (C) Mayor Juaquino echoed the thoughts of most observers
of the Constituent Assembly that the assembly is in peril.
Juaquino explained that the MAS' call for dialogue with the
opposition is political theater, and that the MAS has no
intentions of participating in real negotiations. The mayor
mentioned that the MAS will likely use the failed
negotiations as a pretext to approve their version of a new
constitution using its simple majority within the Constituent
Assembly, without input from the opposition. (Comment:
Juaquino failed to explain what would follow this scenario.
Many observers state this would be just the first step in the
MAS' strategy to impose their new constitution without
following the rules governing the Constituent Assembly
process. End Comment).


9. (C) Juaquino cited indigenous autonomy as the most
contentious issue before the Constituent Assembly, explaining
that the MAS has purposefully confused "the people" on this
issue and has failed to provide any details on how indigenous
autonomy would be implemented. The mayor jokingly stated
that he, as a member of the nearly two million strong Quechua
group, should be in favor of indigenous autonomy, but then
raised a number of concerns regarding the MAS proposal.
Despite his own humble upbringing in a Quechua community, the
mayor seems fundamentally uncomfortable with the divisive
nature of President Morales' pro-indigenous rhetoric. To
Juaquino, the most important issue is how land would be
distributed under the MAS' ill-defined plan. He questioned
how the MAS would handle the people who are "left out" of
their indigenous autonomy proposal. (Comment: Juaquino did
not clarify what he meant by those who are "left out."
However, we can infer that he meant European and mestizo
urban dwellers, as well as rural peasants (campesinos) who
are not members of a particular area's dominant indigenous
group. End Comment).


10. (C) Mayor Juaquino also mentioned that he personally
opposed the MAS' proposal for a unicameral legislature and
for the consecutive re-election of presidents. Juaquino
argued that small departments like Potosi would be
disadvantaged should the MAS succeed in eliminating the
Senate which currently affords each department three
representatives. Although he has been elected mayor of
Potosi five times, the irony of his stance against
re-election was not lost on him. He defended his position by
explaining, that mayoral terms have changed three times over
the past fifteen years, and that he was re-elected under each
new revision. He added that the MAS if it truly represented
indigenous culture would respect the indigenous tradition
that requires leaders to rotate in and out of positions of
power.

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Comment
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11. (C) Rene Juaquino has already participated on a
Department-sponsored trip to the United Statesand has always
expressed a desire for close ties with the embassy. He has
political credibility for what most observers argue has been
his very effective and transparent management of the city of
Potosi. The fact that he is Quechua, and speaks Quechua,
negates President Morales, natural advantage over other
opposition leaders who look more like Spanish conquistadors
than Bolivia's largely indigenous and mestizo populace. In
fact, Juaquino, unlike Morales, has clear ties to his
indigenous roots. He explained to us with great pride that
in January 2008 he was going to be officially named "Kuraka"
(or leader) of the village he grew up in.


12. (C) National voter preference polls conducted in early
2007 still had Juaquino in the single digits (largely because
he is a local politician),but there are signs that he is
emerging as a national leader. On September 6, President
Morales released details of a supposed plot to overthrow his
government by Santa Cruz radicals (aka Nacion Camba). While
discussing the plot, Morales identified Juaquino as the
plotters' choice to be his successor. If the government did
not fear Juaquino's emergence, it would have never mentioned
him by name. During the September 18 meeting Juaquino
explained that he knew nothing of the alleged plot, and
argued it was yet another tactic by the government to
distract public attention from internal problems. The
government may have also been taking a pre-emptive shot to
prevent a possible alliance between AS and Santa Cruz
business (financial) interests. In this the government may
have been on to something; there are rumors that CAINCO (the
Santa Cruz Chamber of Industry and Commerce) is planning to
back Juaquino and his AS party. With CAINCO and other
financing in line, Juaquino could launch himself on to the
national scene. The countdown to launch may already be
underway, on September 24, Juaquino unveiled the AS'
alternative platform for the Constituent Assembly; a platform
that contained much of what Juaquino discussed with us on
September 18. End Comment.
GOLDBERG