Identifier
Created
Classification
Origin
07LAPAZ3236
2007-12-12 15:04:00
CONFIDENTIAL
Embassy La Paz
Cable title:  

PL-480: WE CAN'T GIVE MONEY AWAY

Tags:  ECON PGOV AGR FAO FAS IFAD IICA BL 
pdf how-to read a cable
VZCZCXRO9942
PP RUEHLMC
DE RUEHLP #3236/01 3461504
ZNY CCCCC ZZH
P 121504Z DEC 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 5933
INFO RUEHAC/AMEMBASSY ASUNCION 7405
RUEHBO/AMEMBASSY BOGOTA 4771
RUEHBR/AMEMBASSY BRASILIA 8680
RUEHBU/AMEMBASSY BUENOS AIRES 5907
RUEHCV/AMEMBASSY CARACAS 3123
RUEHGE/AMEMBASSY GEORGETOWN 0512
RUEHPE/AMEMBASSY LIMA 3325
RUEHMD/AMEMBASSY MADRID 3747
RUEHMN/AMEMBASSY MONTEVIDEO 5108
RUEHPO/AMEMBASSY PARAMARIBO 0198
RUEHQT/AMEMBASSY QUITO 5760
RUEHSG/AMEMBASSY SANTIAGO 0369
RUEHUB/USINT HAVANA 0790
RUEHLMC/MILLENNIUM CHALLENGE CORP
C O N F I D E N T I A L SECTION 01 OF 03 LA PAZ 003236 

SIPDIS

SIPDIS

CORRECTED COPY

E.O. 12958: DECL: 11/26/2017
TAGS: ECON PGOV AGR FAO FAS IFAD IICA BL
SUBJECT: PL-480: WE CAN'T GIVE MONEY AWAY

REF: LA PAZ 002960

Classified By: Ecopol Chief Mike Hammer for reasons 1.4 (b) and (d).


-------
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 03 LA PAZ 003236

SIPDIS

SIPDIS

CORRECTED COPY

E.O. 12958: DECL: 11/26/2017
TAGS: ECON PGOV AGR FAO FAS IFAD IICA BL
SUBJECT: PL-480: WE CAN'T GIVE MONEY AWAY

REF: LA PAZ 002960

Classified By: Ecopol Chief Mike Hammer for reasons 1.4 (b) and (d).


--------------
Summary
--------------


1. (C) Institutional incompetence, politicking, and
resistance to cooperation with the United States is hampering
USDA programs in Bolivia. At the end of the Title I wheat
monetization program in 2005, a committee within the PL-480
Secretariat was set up to administer the approximately US$6

SIPDIS
million in remaining funds. To date, the joint U.S./Bolivian
committee has spent only US$46,154 on projects. Moreover,
current government decrees restricting the use of foreign aid
threaten to further complicate the situation. The Morales
Administration shows little willingness to cooperate, even
with a program that directly benefit their campesino base.
End Summary.

--------------
PL-480 Advisory Board
--------------


2. (U) The PL-480 Advisory Board was established in 2005 to
administer the approximately US$6 million in funds which
resulted from Title I wheat monetization. According to the
bilateral agreement, the Board is comprised of two
representatives from the Ministry of Agriculture, the
Regional Agricultural Counselor of the U.S. Embassy (Eugene
Philhower, out of Lima),and a representative from Post
(EconOff). Decisions are based on majority vote and, in the
event of a deadlock, the decision of the U.S. Agricultural
Attach is controlling. The board has generally met every
three months.


3. (C) Entering the September meeting, the Board had
approved seven projects for nearly US$4 million. No action
had been taken on any of them, and the Minister of
Agriculture representatives said that two of the projects
were no longer acceptable: The first because some of the
funds were to be given to a private entity and the second,

although they didn't say it outright, because it was to take
place in the opposition state of Santa Cruz. In an attempt
to continue to maintain cordiality Philhower agreed with the
decisions. Moreover, he encouraged the representatives to
come up with project alternatives.


4. (C) In a November 29 meeting, no additional funding had
been spent to support the five outstanding projects. After
more that two years, only US$46,154 has been spent. When
asked, the PL-480 director general (the PL-480 also handles
donations from other nations) said that they "have no reason
why none of the money has been spent."

--------------
Alfalfa, Milk, and Eager Campesinos
--------------


5. (C) During Philhower's September visit, we visited an
altiplano project to encourage alfalfa production in support
of dairy farming in the desperately poor altiplano outside of
La Paz. The project is managed by Save the Children and
counts on the cooperation of the National Program of Seeds
(PNS). The participating campesinos were enthusiastic,
well-organized, and ready for the alfalfa planting season
(late November, early December). At the board meeting and in
a separate meeting with Vice Minister of Agriculture Roxana
Liendo, EconOff was assured that the seeds would soon arrive
to support the projects. The seeds had still not been
purchased as of the November 29 meeting. The Ministry
representative said that there were problems in the bidding
process, but could offer no concrete details. He said that a
new bidding process will take place on December 14 and the

LA PAZ 00003236 002 OF 003


seeds may still reach the campesinos shortly after.

--------------
Trying to Support Food Health and Safety
--------------


6. (C) The largest project approved by the Board (US$1
million) would go to support the activities of Bolivia's
National Service of Food Health and Safety (SENASAG).
Currently, the USDA and the InterAmerican Development Bank
(IDB) have been the primary financiers of SENASAG programs
(IDB funds run out this year). In order to ensure the
quality of work, the USDA has wholly funded an administrative
unit (UNADE) as a part of SENASAG. UNADE has two U.S. Animal
and Plant Health Inspection Service (APHIS) employees and has
been instrumental in the fight against hoof and mouth disease
and other plant and animal health issues. Over the past year
however, the Ministry of Agriculture has been replacing
trained scientists and technicians in SENASAG with political
allies and now may be trying to eliminate UNADE and the
oversight it provides. SENASAG was scheduled to present its
reorganization plans to the Ministry on December 10. While
unofficially, Ministry representative have said that the role
of UNADE will be preserved, many other signs indicate
otherwise.


7. (C) While it is normally difficult for Embassy officials
to communicate with high level members of the government,
EconOff recently sat next to SENASAG president Rolando Cazzol
on a flight to southern Bolivia. (Note: Cazzol is a childhood
friend of Agricultural Minister Susana Rivero and has no
previous plant and animal health experience. End Note.) This
provided an opportunity to try to understand why SENASAG had
yet to spend any of the approved project money and has also
been unable to use 22 pick-up trucks donated to the agency by
the USG in May 2007. As to the project money, Cazzol said
that they desperately needed the funds, but were waiting
until after the reorganization meetings to decide how to use
it. He also said that he planned to try to preserve the role
of UNADE.


8. (C) As to the donated trucks, which were officially
handed over by Ambassador Goldberg to help with fruit fly
inspections, Cazzol said that the law prohibited the
government from buying "luxurious" vehicles. However, he
went on to add that SENASAG really needed the vehicles and he
was going to pay the dealer the outstanding balance using the
SENASAG budget (only 20% of the cost has been paid to the
dealer). He would then ask the Minister Rivero to reimburse
SENASAG with the funds donated by the USG. (Note: Carolyn
Cohen, regional director of APHIS, said that the bidding
process for the truck contract was rigidly transparent and
that after the top bidder was identified, Ministry officials
requested that the bid go the second place bidder. After
insisting the contract go to the top bidder, the Ministry
accepted the decision and paid for 20% of the total value of
the trucks. However, the remainder of the bill has not been
paid and the trucks sit locked in a car lot. The Ministry at
first claimed "irregularities" in the procurement and
insisted on auditing the process. Two internal audits and
one external audit by Price Waterhouse were conducted and no
irregularities were found. Now the government is claiming
that the trucks are too "luxurious" and cannot be accepted.
Ironically, Evo recently exhibited four similar trucks in the
central plaza of La Paz which were donated by the Venezuelan
government for use by community groups. End Note.)


9. (C) EconOff shared the news with Dr. Cesar Orozco, the
veterinary officer at UNADE, and he said Cazzol was simply
not telling the truth. First of all, SENASAG does not have
the resources to pay for the trucks. Secondly, he had just
come out of a meeting on December 10 with Minister Rivero and
Cazzol where Cazzol flatly stated that the trucks would never
be released because they were to be used in the opposition
state of Santa Cruz. Moreover, Liendo said that she would
not authorize their release because it was the US Ambassador

LA PAZ 00003236 003 OF 003


himself who officially donated the trucks. Orozco believes
that they forgot that he was present in the meeting.
Finally, both Orozco and Juan Chavez, Interamerican Institute
for Agricultural Cooperation (IICA) representative, believe
that Rivero cannot authorize the Title I funds to be used to
support agricultural projects because she will be seen as
cooperating with the U.S. and would thus be in danger of
losing her job. A final discouraging sign is that when
Agricultural Counselor Philhower sent a letter directly to
Vice Minister Roxana Liendo to explain the possibility of
funding SENESAG along with UNADE, she answered by sending
back a copy of the decree outlining new restrictions on
external donations (Ref A).

--------------
Wheat Refused, Looking for Alternatives
--------------


10. (C) Government intransigence is also affecting the
Title II programs administered by USAID. In order to import
the commodities necessary to support their programs, USAID
needs a Ministerial Resolution. On December 3, a day before
a ship with some US$6 million dollars worth of commodities
was set to be loaded, the Ministerial Resolution had yet to
be signed. At the last possible moment, the Ministry did
issue the permission, but with some restrictions. They would
allow the importation of some commodities to be distributed,
but would not allow any wheat flour to be imported for
monetization or distribution. This wheat is now in the
process of being directed to other countries. (Note: The
restriction is particularly odd considering government
efforts to control inflation, which have included requiring
military units to bake bread. End Note.) For the Title II
program, the loss of the wheat is a heavy blow. Without
monetization, cooperating partners stand to lose around US$6
million. Currently, USAID is negotiating with Food For Peace
in Washington to replace the forgone income from monetization
with cash resources in order to successfully conclude the
affected Title II program by December 2008.

--------------
Comment
--------------


11. (C) Despite the hostile environment, the Embassy
continues to try to work with its Bolivian counterparts to
continue joint programs. However, as the PL-480 situation
shows, moving forward is difficult when the Morales
Administration seeks to limit cooperation or ministries
believe it is not safe to work with us. More generally, a
cloud of uncertainty remains over many programs and the
vaguely written decrees addressing foreign assistance, few of
which have been defined by implementing regulations. We are
not confident that the "rules of the game" on foreign aid
will be clarified any time soon. The deterioration of SENASAG
is also of considerable concern. Funding for the agency runs
out at the end of the year, which, in combination with the
increasing politicization of the agency, puts at risk the
continued effective control over plant and animal health.
End Comment.
GOLDBERG