BOLIVIA: NEW AND ONGOING ATTACKS ON USAID

C O N F I D E N T I A L LA PAZ 001426 SIPDIS PLEASE PASS TO USAID/LAC CARDENAS, CORNICK, AND LAWRENCE E.O. 12958: DECL: 06/25/2018 TAGS: PGOV PREL BL EAID ASEC PTER SUBJECT: BOLIVIA: NEW AND ONGOING ATTACKS ON USAID REF: LA PAZ 1166 Classified By: EcoPol Chief Mike Hammer reasons 1.4 b,d ¶1. (C) Summary: On June 24, the six coca-growing federations of Chapare (President Evo Morales' most loyal support base) and five mayors of the region announced their intention to expel USAID from the region. In a blatantly political move, these groups accused USAID of conspiracy and even support for the potential assassination of the president, while asserting that they would remove every trace of USAID from the region. USAID has received reports that these aggressive actions by a small group of radical cocalero leaders is alienating the broader group of Chapare farmers, who are not in agreement with expelling USAID. (Note: On June 25, the Embassy received a call from the coordinator of a Cochabamba Peasant Farmer Women's Association, who said that her organization is planning a department-wide march in support of USAID on July 7, protesting the government's actions against USAID. End note.) While there have been similar and often empty threats (albeit with a little less hyperbole) in the past, USAID is (at least for now) taking the cocaleros' statements seriously and has instructed contractors to evacuate the region and protect assets. Vice Minister Hugo Fernandez stated publicly that the cocaleros' position is not that of the central government but that, "they have the right to do this and they have their reasons for doing it...the cocaleros don't want new (USAID) projects and this is their firm position." Despite these most recent attacks in a long history of aggressive anti-USAID government rhetoric, Foreign Minister David Choquehuanca declared that USAID will not stop its cooperation: "The United States is willing to align its cooperation toward the objectives of (the central government's) National Plan." ¶2. (C) Summary continued: The Bolivian government's ongoing resistance to USAID projects, and its three-month portfolio review of the program (reftel),are also threatening nation-wide projects, with rumors suggesting that the Bolivian government may close down the Strengthening Democratic Institutions (FIDEM) project. Meanwhile, in the course of the portfolio review parts of the Alternative Development program have been frozen and USAID partner World Council of Credit Unions (WOCCU) has been asked to shut down. ; However, USAID official contacts at the technical level and many political contacts recognize their shared interests with the USG (development, democracy, and inclusion, among others.) Many officials and Bolivians in general appreciate USAID's activities in Bolivia, and the government will likely find it difficult to shut down the program completely. As it has in the past, Post plans to ride out the attacks and rhetoric, gaining time by using the procedural clauses established in agreements with the government. In the run-up to the possible August 10 recall referenda, the government's sharp rhetoric and bullying are political tactics taken from the cocalero playbook to distract attention from domestic problems. End summary. - - - - - - - - - - - - - - - - - - - Cocaleros "Expel" USAID from Chapare - - - - - - - - - - - - - - - - - - - ¶3. (SBU) On June 24 cocaleros and municipal governments in the Chapare announced that they would be throwing USAID out of the Chapare. Villa Tunari Mayor Feliciano Mamani minimized the potential impact of USAID's 'expulsion': "Through the (central government) program 'Evo Delivers' and the support of the European Community we receive more support for municipalities and they give us the financing without conditions." Mamani added that in the Chapare "everyone knows that the U.S. Embassy promotes propaganda against the President and the government and that it is conspiring with some prefects." The Vice President of the cocalero federations, who is also a Movement Toward Socialism (MAS) Congressman, Asterio Romero announced that, as of June 25, the cocalero federations would begin removing USAID signs from USAID projects: "Not a single trace of this foreign organization must be left in the entire tropic." ¶4. (C) As a protective measure, USAID has removed contractors, staff, and some assets from the area and has also removed external signs from the projects. USAID contractors and staff have been told not to speak with the press. As of the morning of June 25, personnel from the contractors ACDI/VOCA and Chemonics have left or are preparing to leave. Another implementer, Caminos Vecinales, secured its equipment and is not working, instead remaining in a wait-and-see mode. Mayor Mamani called a USAID employee working in the Chapare to try to alleviate worries about personal safety, explaining that the cocaleros' instructions were to take out any signs with "USAID" but not to do anything extreme. However, USAID has heard that a radical wing is calling for the cocaleros to seize assets (this is not the official position apparently, and it is not clear how much credibility the rumor has.) Congressman Romero's statements add some weight to the rumors of radical action, however: "There cannot remain any agreement, not a single office, nor a sign, nor absolutely anything that mentions its (USAID's) presence in the region." - - - - - - - - - - - - - - - - Wild Accusations Against USAID - - - - - - - - - - - - - - - - ¶5. (C) Romero's unbridled rhetoric is more worrisome since it comes from a cocalero leader (that is, one of Evo's strongest supporters) and a national congressman for Evo's MAS party. Romero publicly accused USAID of being involved in a coup d'etat against Evo's government, adding, "They're even planing to take his (Evo's) life." Romero accused USAID of supporting and promoting groups such as the Santa Cruz Youth Union which, according to Romero, spread terror and violence in departments that have had autonomy referenda. Romero declared that USAID will be expelled completely from the Chapare, mentioning specific USAID projects by name. Romero added that USAID will later have to leave Bolivia entirely. - - - - - - - - - - Conflicting Stories - - - - - - - - - - ¶6. (C) The Bolivian government and social-sector views are muddled. The leading Chapare mayor has said that USAID will have to leave once current and ongoing projects are finished. (Note: USAID has in the past received several thank you letters from this mayor for technical assistance which has increased his municipality's revenues exponentially. End note.) Cocalero-leader and MAS Congressman Asterio Romero is taking a much harder line, saying that USAID must be "gone from the Chapare" by June 26. ¶7. (C) Foreign Minister Choquehuanca said USAID cooperation will continue, and added "The United States is willing to align its cooperation toward reaching the objectives of (the government's) National Plan." Vice Foreign Minister Hugo Fernandez (who is often the government's public "voice of reason") attempted to separate the declarations of the cocaleros from the position of the central government, but added that the cocaleros are a "very important social movement" and that the cocaleros "have a right to do this and have their reasons for deciding to do this." Fernandez added that the cocaleros don't want new USAID projects and that the government should revise all USAID projects so that they match with the National Development Plan. (Note: The Embassy believes USAID's programs also support the National Development Plan and has said so publicly on several occasions. End note.) - - - - - - - - - - - - - - - - Ongoing Difficulties for USAID - - - - - - - - - - - - - - - - ¶8. (C) In mid-March, the Bolivian government launched a four-step review of USAID's portfolio. The review, which was intended to be done within thirty days, has resulted in a de facto freeze of several USAID programs: --Alternative Development: Several months ago the Vice Ministry of Coca and Integrated Development (under the anti-USAID, anti-donor Ministry of Rural Development) informed us by letter that per "orders from above" USAID should halt any new co-investments under the Rural Competitiveness (ARCo) project. (Note: ARCo is one of several components of the Alternative Development program. Co-investments are grants to farmer organizations to help them with banana, pineapple, palm heart, specialty coffee, cacao, and other alternative development products. End note.) ARCo continues to implement ongoing, previously-approved co-investments but has not undertaken any new ones. Certain farmer groups have complained to the vice ministry, which has covertly approached us--behind the backs of their GOB counterparts in charge of the portfolio review--to plead that USAID restart alternative development efforts. The Vice Ministry is more interested in infrastructure investment than in alternative crops, but the situation has offered an opportunity to bargain: USAID has told Vice Ministry that the mixed signals are confusing, and that infrastructure investment and support for crops are linked. --Environment: The Ministries of Presidency and Development Planning requested that USAID not initiate new projects until the portfolio review is concluded. Several months ago, USAID asked the Vice Ministry of Public Investment (VIPFE, the official Bolivian government counterpart for donors) for a green light to initiate procurement for an important new environment project aimed at protecting Lake Titicaca and Altiplano biodiversity. Bolivian government technical counterparts from several vice ministries support this project. The Minister of Planning (a former Millennium Challenge chair, who as Minister now sits over VIPFE) forwarded the request to the very-political (and anti-USAID) Ministry of the Presidency, asking for guidance. Presidency Minister Quintana (who publicly attacked USAID on state television last August) sent the Minister of Planning a reply saying USAID should not start new activities until the portfolio review is completed. The Minister of Planning forwarded that letter to USAID. --World Council of Credit Unions (WOCCU): The Ministry of Finance asked USAID partner WOCCU to shut down because their credit union strengthening program is "not necessary" for Bolivia. This is probably the most well-considered attempt to stop a USAID project: the Ministry is using its power over the international NGO registration process and its accompanying procedures to stop the WOCCU program. The Ministry has told WOCCU, in writing, that it will not renew WOCCU's framework agreement. (Note: the agreement is a prerequisite to registering in Bolivia; if there is no agreement, there is no registration, and therefore WOCCU would be in Bolivia illegally.) While USAID is not a party to the exchanges between WOCCU and the government nor the framework agreement, USAID agrees with WOCCU's plans to set up a local NGO ("WOCCU Bolivia"),which will have different, more achievable, legal requirements for registration. USAID does not believe the GOB's assertion that credit union strengthening is unnecessary, but rather suspects this to be a technical fig leaf to hide the political intention of closing down USAID-funded projects. Many credit unions in Bolivia (and their tens of thousands of members) benefit from stronger institutions that manage money and intermediate financial transactions more efficiently. These credit unions have expressed a willingness to stand up for WOCCU's program at the proper moment. USAID is considering raising WOCCU's situation with the Minister of Planning, noting that the Finance Ministry's letters to WOCCU contradict the spirit of the portfolio review, which is supposed to conclude prior to any decisions to shut down USAID projects. Although the portfolio review seems to have stalled, it may be possible to use the government's own rules for the review to forestall efforts to closeout WOCCU and other projects. - - - - - - - - - - - - - - - - - - Possible Future Challenges to USAID - - - - - - - - - - - - - - - - - - ¶9. (C) On June 17, in the wake of the Ambassador's departure and President Morales's published attacks on USAID, USAID began to hear credible rumors that the Bolivian government was planning to close the Strengthening Democratic Institutions project (FIDEM.) The government has always targeted FIDEM, which is implemented by Chemonics, because part of its work involves supporting the departmental governments. Vice President Garcia Linera has repeatedly told us that he opposes democracy programs, like FIDEM's, because they strive to "win the hearts and minds," presenting a different vision of democracy than the government's. FIDEM works in eight of the nine departments (three of which are governed by democratically-elected MAS prefects) providing the kinds of state-building training and technical assistance that USAID and other donors provide worldwide. The work--regional development planning, service delivery, financial planning, and others--is technical and non-political. USAID has heard rumors that the government may try to replace FIDEM (projects with the departmental governments) with a new draft USAID program to strengthen municipal governments. This would fit with the MAS's goals of strengthening municipal governments to the detriment of departmental governments, thus weakening one of the MAS's main sources of opposition. This rumor suggests that the government may not be interested in kicking USAID out completely, but instead manipulating USG aid to meet their own needs. One possible USAID response would be to start the new project with municipalities while continuing FIDEM and departmental government support, through FIDEM's closeout date of September 2009. - - - - Comment - - - - ¶10. (C) The Bolivian government and cocalero's steps against USAID are interfering with the completion of USAID's goals in the country, and we do not anticipate any improvement in the near future. In fact, in the run-up to the August 10 recall referenda and in the wake of the autonomy referenda, we can probably expect more government attacks on the USG and USAID in particular. That said, officials at the technical and even some at the political level recognize our shared interests with the GOB (development, democracy, inclusion, among others.) Many officials want USAID to continue, and the government will likely find it difficult to shut down the USAID program completely. For now, Post plans to endure the attacks and tired theatrics, relying on the procedural clauses established in agreements with the government to gain time and stay in the game. USAID will continue to coordinate closely with the Embassy and Washington. End comment. URS