BOLIVIA: USAID PORTFOLIO REVIEW UPDATE

C O N F I D E N T I A L LA PAZ 001166

SIPDIS

PLEASE PASS TO USAID/LAC JOSE CARDENAS AND JEFFREY BAKKEN.

E.O. 12958: DECL: 05/19/2018
TAGS: PGOV PREL BL
SUBJECT: BOLIVIA: USAID PORTFOLIO REVIEW UPDATE

REF: A. LA PAZ 695

B. LA PAZ 1079

Classified By: CDA R. Urs for reasons 1.4 (b) and (d).


1. (C) SUMMARY: This cable updates REFTEL A, which announced
the launching of the sensitive Government of Bolivia (GOB)
review of the USAID portfolio. The review continues,
although in recent weeks the GOB has announced it will
accelerate the process by cutting out previously requested
program presentations and field visits while focusing efforts
on reviewing documentation and information requested by the
GOB while holding back on financial and personal information
protected by U.S. commercial law and the Privacy Act. The
GOB interests around the portfolio review table appear to
range from a genuine need to better understand how USAID
works to a focus on greater control or flat out stopping at
least parts of the program. Post is concerned that it is the
latter that will prevail and that another attack on USAID may
be in the wings. END SUMMARY


2. (C) The GOB launched the four-step portfolio review in
mid March; sought to finish it in thirty days; intensely
reviewed the Integrated Alternative Development (IAD)
program; but quickly fell behind schedule on what has been a
frustratingly ad hoc and improvised process. During these
initial weeks, the review was driven largely by the Ministry
of the Presidency and included a strong political flavor.
The review has slowed IAD program implementation, creating
frustrations on the part of the Vice Ministry of Coca and
Integrated Development (USAID's technical counterpart, who
needs assistance to advance coca control),and tensions
between this Vice Ministry and the GOB reviewers.


3. (C) After receiving in-depth IAD presentations and
speaking with project implementers, local officials and
beneficiaries on field trips to the Yungas and Chapare, the
GOB switched tactics pushing to accelerate the process while
focusing strictly on a rapid document review. The GOB has
requested summary financial, impact and related information
on projects and programs, as well as the back up
documentation (copies of contracts, sub contracts, etc) it
claims to need to corroborate the summary information. The
change in tactics and the sudden desire to hurry give us
pause.


4. (C) In the last two portfolio review meetings, we have
noted more leadership from previously absent players, such as
the Minister of Planning and the Vice Minister of Public
investment and External Finance - VIPFE (USAID's and donor's
official GOB counterparts) as well as technocrats from the
ministries of planning, commerce, and at least two line
ministries. Different players seem to have different agendas
and so far, the GOB is not speaking with one voice.


5. (C) Generally, the technocrats from Planning, VIPFE, and
the line ministries appear focused on the legitimate issue of
value for money from USAID, whereas the Presidency
representative Albaracin, has a more political agenda aimed
at control and perhaps stopping at least some programs.
Albaracin has used the review to complain about what he
claims is our expensive and inefficient method of delivering
development assistance via projects. He appears to want more
funds to go to the GOB for implementation by public sector
institutions. These however, have not yet shown their
capacity to deliver assistance, achieve results, and account
for funds.


6. (C) The GOB has requested a large amount of information
as part of the review. These requests put us between a rock
and hard place. We suspect that whatever we give them may
very well be used against us. However, refusing to share
information enables them to attack us for bad faith and
opacity. We've chosen a middle ground and on May 19 handed
over some of the backup documentation requested. The package
includes summary financial, impact and other information on
projects and programs, but excludes that information
protected by U.S. law (personal data and certain kinds of
financial information.)


7. (C) What the GOB will do with the information is not yet
clear, but signs (including a recent meeting between the
Ambassador and the Vice President, see reftel B) suggest
several possibilities. On the one hand, they may want to
alter parts of the USAID Democracy program or close it down
entirely. Then again, they may reiterate past requests to
quickly pass parts of the portfolio from implementation by
NGOs and contractors to the GOB. While this would be
somewhat, but not entirely, consistent with the principles of
the Paris Declaration on Aid Effectiveness (to which the USG
is a signatory),the GOB does not at present have the
capacity to comply with requirements governing the use of
U.S. funds. The GOB may also simply distort and misrepresent
the information to discredit the U.S. and USAID in the court
of public opinion, a tactic they have tried in late August
2007 and which, judging by media reports, was not effective.
Unfortunately, the possibility that the GOB intends to use
the review to negotiate good faith adjustments to USAID's
program seems like a long shot.


8. (C) COMMENT: The political calendar has shifted markedly
since the portfolio review began, with the landslide victory
of the May 4th referendum on the Santa Cruz Autonomy Statutes
and the promulgation by President Morales of the Law on the
Revoking of Mandates (of the President, Vice President, and
Prefects). One wonders whether such high stakes electoral
politics will put attacks on USAID on the back burner or make
them valuable political currency. The bottom line is that we
don't know what the GOB is planning to do with this
information but are not optimistic. END COMMENT.
URS