Identifier
Created
Classification
Origin
08GUAYAQUIL174
2008-07-28 14:27:00
CONFIDENTIAL
Consulate Guayaquil
Cable title:  

NEW MINISTER OF INDUSTRIES COMES FROM CUENCA,S

Tags:  PGOV ECON EC 
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VZCZCXYZ0020
RR RUEHWEB

DE RUEHGL #0174/01 2101427
ZNY CCCCC ZZH
R 281427Z JUL 08
FM AMCONSUL GUAYAQUIL
TO RUEHC/SECSTATE WASHDC 9490
INFO RUEHBO/AMEMBASSY BOGOTA 3349
RUEHCV/AMEMBASSY CARACAS 0466
RUEHLP/AMEMBASSY LA PAZ JUL LIMA 3770
RUEHQT/AMEMBASSY QUITO 0653
C O N F I D E N T I A L GUAYAQUIL 000174 

SIPDIS

E.O. 12958: DECL: 07/28/2018
TAGS: PGOV ECON EC
SUBJECT: NEW MINISTER OF INDUSTRIES COMES FROM CUENCA,S
PRIVATE SECTOR

Classified By: Consul General Douglas Griffiths for reasons 1.4 (b) and
(d)

C O N F I D E N T I A L GUAYAQUIL 000174

SIPDIS

E.O. 12958: DECL: 07/28/2018
TAGS: PGOV ECON EC
SUBJECT: NEW MINISTER OF INDUSTRIES COMES FROM CUENCA,S
PRIVATE SECTOR

Classified By: Consul General Douglas Griffiths for reasons 1.4 (b) and
(d)


1. (C) Summary: Xavier Abad replaced Raul Sagasti as Minister
of Industry and Competition. Both are businessmen who are
not affiliated with Correa,s party, but Abad may be a more
effective advocate for the private sector than the
low-profile Sagasti. Abad is from the prosperous southern
highland town of Cuenca, and his appointment may signal
Correa's interest in promoting Cuenca as a neutral ground
between Quito and Guayaquil industrialists. End summary.


2. (SBU) Raul Sagasti,s departure in late June from the
Ministry of Industry and Competition, or Ministerio de
Industrias y Competitividad (MIC),was no surprise, as he had
twice presented his resignation to President Correa in the
hopes of returning to the private sector. Sagasti publicly
announced that he would return to the metal industry sector
and that he would work with the government in its national
cement industry.


3. (SBU) Xavier Abad, a native of Cuenca, had been Executive
Director of the Chamber of Industries of Cuenca since 2005.
An attorney, he was Under Secretary for Industry in the
government of ex-President Lucio Gutierrez and a lead
negotiator in the Free Trade Agreement talks with the U.S.
He is not affiliated with the President,s Movimiento Pais.
Abad has been a good contact of ConGen Guayaquil, and he told
the Consul General at our Independence Day celebration in
Cuenca that he hoped to "sensitize the government to the
concerns of business leaders". He went on to explain that he
shared President Correa,s goal of creating a more just and
inclusive country, but he felt that some of the President,s
initiatives were putting a burden on the private sector and
that there were not the proper incentives for investing in
Ecuador.


4. (C) Pol/Econoff spoke with the Executive Director of the
American Chamber of Commerce (AmCham) in Cuenca, Geovany
Osorio, about Abad's appointment. He said a contact in the
President,s staff reported that Correa had said a week prior
to the announcement that he was "sick of the Quito and
Guayaquil industrialists who only cared about their own
interests". Osorio speculated that Correa sees Cuenca,
Ecuador,s third largest city, as the "happy neutral" site
and selected Abad as its representative.


5. (C) This sentiment was echoed by conversations with former
President of the Cuenca AmCham Esteban Crespo, who is
currently president of Cuenca,s Chamber of Industries.
Crespo outlined to Pol/Econoff his interest in creating a
strategy in which Cuenca could be the broker for private
industry interests. Crespo has been planning a private
meeting with Correa and Abad to discuss this strategy. He
has not yet held this meeting with the president.


6. (C) Upon hearing of Abad,s appointment, Executive
Director of the Guayaquil Chamber of Commerce Teodoro
Maldonado told Pol/Econoff that he believed it was a symbolic
gesture on the part of Correa, as the job now has fewer
responsibilities. (Note: In early 2007, the Ministry of
Foreign Affairs took the trade policy portfolio away from the
MIC. End note.) Maldonado stated that Abad clearly has a
different ideology than the current administration in terms
of industrial policy, but he doubted Correa,s sincerity in
appointing someone who represents the official private
industry sector. Fernando Carvajal, an ex-candidate for the
Constitutional Assembly for Movimiento Pais, stated to the
press that he recognized the nomination as the government,s
effort to achieve some kind of national agreement on
industrial policy, "considering (Abad) has questioned the
government,s policies".


6. (C) Comment: Sagasti, a Quito businessman, was expected to
be the liaison with the private sector, but he had few ties
and did not appear to be able to bring the president and the
business community closer together. While he apparently
helped modify a few decrees, he did not appear to be an
effective player in the Correa administration. Indeed, it
was newly appointed Coordinating Minister for Production
Susana Cabeza de Vaca who successfully pushed Correa to begin
holding meetings with business representatives, but those
meetings excluded representatives of the big Guayaquil and
Quito business chambers. Therefore, Correa's selection of an
official from the third largest industry chamber represents
an interesting choice. Like Sagasti, Abad is not part of the
president's inner team. However, he will likely be more
active than Sagasti and has closer ties to the established

business community, so he may be a better interlocutor
between the government and the private sector. Abad is very
open to the U.S. and attended the Embassy,s 4th of July
event in Cuenca. End comment.

GRIFFITHS