IRAN AND EVO: PUBLIC LOVEFEST; PRIVATE FRUSTRATIONS

C O N F I D E N T I A L SECTION 01 OF 04 LA PAZ 001352

SIPDIS

STATE ISN/RA FOR RICHARD NEPHEW
STATE IO/T FOR HEATHER VON BEHREN

E.O. 12958: DECL: 06/14/2018
TAGS: PGOV PREL PTER PARM KNNP MNUC IAEA UN IR QA
BL
SUBJECT: IRAN AND EVO: PUBLIC LOVEFEST; PRIVATE FRUSTRATIONS

REF: A. STATE 57726

B. 07 LA PAZ 2626

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


1. (C) Summary: Despite recent public gestures, such as a
Bolivian envoy meeting with the Iranian President Mahmoud
Ahmadinejad and the Bolivian Congress' Lower House
endorsement of the 2007 Iran-Bolivia bilateral agreement,
there is little evidence that Iran is on track to spend $1.1
billion in economic and development assistance promised over
five years. To the contrary, our contacts suggest such
"public shows" are an admission little has been accomplished
and are designed to expedite assistance. Michiaki Nagatani,
Chairman of the Lower House's International Relations
Committee, told PolCons June 11 that a senior Iranian
official in La Paz told him Tehran is frustrated with the
Bolivian government's lack of follow-through on the fledgling
bilateral relationship. An MFA insider claimed a formal
exchange of ambassadors was unlikely before 2009, that there
is a sense of buyers remorse in the MFA concerning the
relationship, and that Bolivian President Evo Morales plans
on visiting Iran, Libya, and Qatar in late August to find
alternatives to shrinking private foreign investment in
Bolivia's hydrocarbon sector. End Summary.

Frustrations Beneath Bilateral Lovefest
--------------


2. (U) Iranian President Mahmoud Ahmadinejad met with
Bolivian special envoy Carlos Garcia in Tehran June 10.
According to (mostly Iranian) press accounts, both officials
made platitudes about deepening relations, but no substantive
agreements or plans were announced. Ahmadinejad pledged
support "always" for the Bolivian government. Iran's Foreign
Minister Manouchehr Mottaki said Garcia's trip has opened a
new chapter in bilateral relations and spoke vaguely about
possible Iranian support for bridge, dam, power plant,
hydrocarbon development, education, and media projects.
Mattaki said "now we seek to implement the signed
agreements," characterizing the bilateral agreements signed
in September, 2007 to provide $1.1 billion in assistance as
an "outline." Garcia, who delivered a written message from
Bolivian President Evo Morales, spoke of the "similar views"
of the two counties, called on Iran to expedite assistance in
hydrocarbon and agricultural sectors. Garcia praised Iran's
steps toward development, peace, and improving the future of
the international community.


3. (C) MFA insider and Policy Planning Officer Jorge
Caballero told PolOff June 11 that Garcia's trip was "mostly
public show," but that his message from Morales was to push
the Iranians to hasten assistance. There is some frustration
among Morales, top advisers that there is "too much talk and
not enough progress," according to Caballero. He reversed
his earlier estimate that the MFA would try to post an
Iranian Ambassador before the end of the year due to general
domestic political "chaos." He now predicts that government
preparations with the August 10 recall referendum and prior
obligations to open embassies in South Africa and India will
push back any formal diplomatic exchange with Iran until

2009. He added, however, that an early appointment was not
out of the question because the resource/budget issue has
been worked out: the Iranians have offered to find and
finance the new embassy and the Bolivian MFA is inclined to
accept the offer. The government's likely candidate for
ambassador is Cansio Mamani, the well-liked political
appointee who was Director of Protocol until being relieved

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of duty for "errors."

Bolivian Lower House Supports Iranian Relations
-------------- --


4. (U) The Bolivian Chamber of Deputies, (lower house)
International Relations Committee approved the main bilateral
cooperation agreement with Iran June 4. There was no debate
during a cursory session passing a resolution supporting the
agreement. Although the endorsement is perfunctory, as both
executives have been trying to move forward with bilateral
projects and relations since the agreement was signed by
President Morales and President Ahmadinejad September 27,
2007, it is expected to get a more critical review in the
Senate, which is controlled by the opposition.


5. (U) During his address to the committee, Vice Foreign
Minister Hugo Fernandez emphasized the agreement has the
common characteristics of trade agreements with other
countries, such as Germany and Belgium, and that Bolivia's
attempt to make friends in the "non-aligned countries" should
not cause concern. The government has characterized the vote
as enabling a "common base" upon which future, more specific
bilateral agreements can be passed.

Agreement's Political Dark Side: Hegemonic Powers Beware
-------------- --------------


6. (C) Michiaki Nagatani, Chairman of the Lower House's
International Relations Committee, told PolCons June 11 that
he abstained from the session as a form of protest. Despite
the fact that Nagatani (opposition MNR party) called for the
meeting, he said he felt uncomfortable endorsing a deepening
of relations with Iran, particularly as the second paragraph
of the agreement's Article 1 is highly politicized and out of
character for an agreement aimed at increasing trade and
development: "To work for the consolidation of the changes
(referring to government's "change" agenda) and positive,
globally appreciated tendencies that advance political
regimes that oppose neoliberalism, that promote social
politics and a genuine integration and cooperation, at the
same time defending national interests of the peoples facing
hegemonic agendas." Based on a copy the Embassy obtained, it
appears only pro-government MAS party members voted in favor
of the resolution.

Iran Also Frustrated with Bolivia
--------------


7. (C) Nagatani also said that he had met with a member of
Iran's representation here in La Paz who told him Iran was
frustrated with the Bolivian government's lack of competence
and follow through. Nagatani said the Iranian complained
that despite the announcement of $1.1 billion in economic and
technological assistance and opening of diplomatic relations
amid great fanfare in September, 2007, the Bolivian
government lacks the capacity to move forward on bilateral
initiatives and he is having difficulty getting any work
done. He remarked that equipment for even smaller-scale
projects, such as establishing milk processing plants, is
being held up in Bolivian customs. The Iranian added that
the assistance is not an altruistic grant but is conditional;
every Rial must be accounted for and must show a return.

MFA Concedes Slow Progress; Defends Peaceful Nukes
-------------- --------------


8. (C) PolOff delivered reftel demarche on May IAEA Report to

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Minister Counselor Miriam Siles and Second Secretary Erika
Strauss in the MFA's Office of Multilateral Affairs June 10.
Siles said she would pass reftel points on to Bolivian
officials at the IAEA and UN in New York. She added "we are
plainly in favor of all UNSCRs" and "very clearly against any
military use of nuclear technology, although we support the
right of all countries to pursue peaceful ends." Siles said
political appointees run the Iran policy and do not "share
much information with careerists like us. We only know what
we read in the newspapers." She clarified that the Iranian
presence in La Paz is an "office of cooperation" at the
moment, even though it is commonly referred to as the Iranian
Embassy (Comment: These are semantics aimed at minimizing the
relationship; the head Iranian representative in La Paz acts
as an ambassador. End Comment). "We are not that far along
yet ... The projects do not seem to be moving along as
quickly as we thought and this has slowed the diplomatic
exchange."

Iran: Buyers Remorse Tempered by Investment Panic
-------------- --------------


9. (C) Caballero claimed he provided a packet of UNSCR and
IAEA resolutions to Foreign Minister Choquehuanca as part of
a presentation he delivered at his initiative to make the
case that Iranian relations are not worth the cost in
international credibility. Caballero claimed even the
architect of the Iran relations, Bilateral Affairs Director
Jean Paul Guevara, has had second thoughts. Caballero
advised that all future demarches on Iran be delivered to
Guevara. Caballero said he's had some success pushing back
on Iran at the MFA, but that reversing course was not likely
as it is still popular on ideological grounds in the palace.
More likely, the MFA would follow through on the existing
obligations, but push back on anything beyond that, i.e. any
new agreements or public initiatives.

Evo Prospecting for Iran, Qatar, Libya Investment
-------------- --------------


10. (C) Caballero claimed a reversal on Iran was also
unlikely because cabinet leaders and palace advisors are
panicking over the government's lack of foreign investment to
develop its hydrocarbon sector and is frantically reaching
out to non-Western countries to fill the void. Caballero
said this was the motivation for a trip planned for Qatar and
Libya the first week of June. Although the trip was canceled
due to domestic political concerns, it has been rescheduled
for late August and now includes a stop in Iran.

Comment:
--------------


11. (C) We have no doubt the agreement's dig at hegemonic
powers is directed at us. The house resolution and envoy's
trip serve the domestic political purpose of showing symbolic
progress regarding Iranian assistance in the absence of
significant actual progress. Nagatani's decision to boycott
the session, rather than fight the resolution, is becoming a
more common practice among legislators (even some in the MAS)
that disagree with Morales administration initiatives. We
have noticed little progress on the ground in deepening of
Bolivian-Iranian ties beyond scattered vehicle donations,
establishment of a handful of milk factories, and talk of
opening a television station.


12. (C) Besides broad political hostility toward the U.S., it
is difficult to fathom what "similar views" are shared by the

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very different Iranian and Bolivian societies. Between the
lines of the Garcia trip is the evident frustration both
sides are having with Iran's promise to invest $1.1 billion
in far-flung Bolivia. FM Mottaki's public comments are a
tacit admission that little has been accomplished since
September, supporting what we have heard privately from our
contacts. We will continue to closely track the evolution of
this anti-U.S. political marriage of convenience. End
Comment.
GOLDBERG