SANTA CRUZ: MAY 4 AS A PANACEA

UNCLAS LA PAZ 000717

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON KPAO BL
SUBJECT: SANTA CRUZ: MAY 4 AS A PANACEA

REF: A) La Paz 638 B) LA PAZ 670


1. (SBU) Summary: During a March 26-28 visit to Santa Cruz, American
Presence Post officer found the city surprisingly calm and
optimistic, although individual Santa Cruz citizens are outraged.
They cite an increasingly long list of grievances and complaints
against the central government, and they are putting all their
energy and hopes into the May 4 referendum on the draft autonomy
statute. Expectations among the population are high, and civic
leaders recognize that hand-in-hand with the get-out-the-vote
campaign they must dampen expectations for what will happen on May

5. Nonetheless, they hope a resounding "yes" vote will mark the
beginning of a new negotiation (difficult though it will be) with
the Morales administration which will result in restructuring the
system of government in Bolivia. End summary.

Hitting Where it Hurts
--------------


2. (SBU) Santa Cruz citizens have reached the boiling point after a
series of recent moves by the central government designed to hit
where it hurts most: their wallets. The March 19 decree forbidding
exports of cooking oil, an industry central to Santa Cruz's economy
(reftels),were seen as a direct attack not only on the business
owners, but on small producers, transportation workers, and factory
employees; in all 16 sectors of the economy. Since the decree
violates both market principles and common sense (hurting Bolivia's
economy and trade balance as a whole),Crucenos are convinced it is
merely a punishment for resistance to the government's socialist
vision. The only escape valve on this pressure cooker is the May 4
vote on Santa Cruz's autonomy statute.


3. (U) As the government imported Argentine rice to resell at
subsidized prices, Santa Cruz rice producers asked why the
government didn't buy the product directly from them. Now that the
rains have stopped and the roads are again navigable, local rice
prices have dropped below those of the government's Argentine rice,
which sits in warehouses.


4. (U) Strikes to protest the government ban on agricultural exports
have been peaceful and controlled. Prefect (Governor) Ruben Costas
called March 31 for the strikes to be lifted. He expressed his
intention to participate fully in the dialogue of reconciliation led
by the Catholic Church (after May 4),but at the same time called
for a huge pro-autonomy rally and march on April 2 to demonstrate
the unity of purpose in Santa Cruz.

Will the Real Indigenous Leaders Please Stand Up?
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5. (SBU) APP met with indigenous leaders representing the five
communities native to Santa Cruz. The Prefecture has designated ten
percent of income from the mining, forestry and hydrocarbons sectors
exclusively for development in indigenous communities, and created
an office to administer the funds under the leadership of a
Chiquitano. With USAID assistance, these indigenous leaders and
their communities have drafted prioritized development plans, and
they also serve as non-voting representatives in the regional
council. Under the autonomy statute, which they had a hand in
drafting, each indigenous community will have its own representative
(with voting rights) in the regional council, in addition to
representatives elected per district. This will result in double
representation for indigenous citizens.


6. (SBU) These leaders are opposed to Evo Morales' vision for
indigenous communities. One pointed to the difference between
"indigenism," which he defined as reciting poetry and telling
legends about noble races suffering for 500 years, and "indianism"
which meant fighting for your rights and your interests. He said
the government seemed obsessed with the former, while Santa Cruz
indigenous leaders were working on the latter.


7. (SBU) They are particularly worried that their communal lands
will be divided or taken away if the government's draft constitution
is passed. They are even more worried that the land will then be
given to "colonizers" from the altiplano who they believe live less
in harmony with the land. (Note: These migrants are usually
indigenous Aymara or Quechua.) They point for example to the
environmental destruction caused by coca cultivation and the
resulting natural disasters. As coca has never been an important
element in Eastern indigenous cultures, they are completely opposed
to the incursion of coca in their protected areas and communal
lands.


8. (SBU) The indigenous leaders working with the prefecture resent
the image of Morales as the indigenous face of Bolivia. However,
they admit that there are many Morales supporters in their
communities, and MAS party activists are campaigning hard against
the autonomy statute and in favor of the draft constitution. (Media
reports April 1 said that a different group of indigenous leaders
had declared their respective communities autonomous in line with
the vision of the draft MAS constitution.) Nonetheless, they are
convinced that the majority of Santa Cruz indigenous community
members favor departmental autonomy.


9. (SBU) The indigenous leaders said their most immediate need is
for financial resources to travel to their communities and campaign
for the statute. They feel used and abused by leaders of the Civic
Committee (a group of civic associations at the forefront of the
autonomy movement),saying the Civic Committee is quick to parade
them as pro-autonomy indigenous representatives, but does not give
them the resources needed to do the job that is expected of them
(campaign in their communities).

Decentralization: It's Catching On
--------------


10. (SBU) APP met with the local branch of the citizen watchdog
"Social Control Mechanism" (ref C),the Association of
Municipalities of Santa Cruz (AMDECRUZ),and several private
citizens and civic leaders. All are waiting anxiously for May 4, to
express at the ballot box their frustration with the increasing
centralism not only of the Morales government, but of other
institutions. Martha Lazo Suarez, who used to form part of the
national civic watchdog group "Social Control Mechanism" explained
that she had returned to Santa Cruz because she wanted to be at the
vanguard, shaping the model for the future political system in
Bolivia. She said the prefecture has been completely open and
cooperative with her office's requests and demands, and that after
May 4 the hope was to further decentralize and train citizens at the
municipal level to serve the anti-corruption whistle-blower
function. Only then could corruption be reduced and citizens have
more faith in their local officials.


11. (SBU) Likewise, AMDECRUZ leaders explained that municipal
associations had been created first in each of Bolivia's nine
Departments. Those nine organizations, in order to share
information and lobby for their interests, had formed an association
at the national level. However, the umbrella group had become a
centralized beast that did not distribute resources fairly. Another
of AMDECRUZ's complaints was that the government was distributing
hydrocarbons taxes (IDH) based on the average price of oil and gas
in 2006, not the real prices in 2007, and therefore owed hundreds of
thousands of dollars to the municipalities and prefects.

Other APP Outreach Activities
--------------


12. (SBU) To date, APP has met with the largest five of Santa Cruz's
14 universities:

--Gabriel Rene Moreno Autonomous University, the public university
--Private University of Santa Cruz (UPSA),an institution founded by
the Santa Cruz Chamber of Commerce with an emphasis on business and
technical fields
--Private Technological University (UTEPSA)
--Catholic University
--Nur University, based on Bahai principles

All are eager for increased relations with the United States,
including speaking engagements by APP and other embassy officers,
both in the capital city and in provincial branches. Though we are
maintaining a low profile through May 4, we are setting the stage to
meet the APP goal of increased outreach to the Embassy's target
audiences -- indigenous and youth.

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


13. (SBU) "We just have to make it to May 4," is the common refrain
which follows complaints from Santa Cruz citizens. Local leaders
are wary that the government has a surprise up its sleeve to try to
stop the referendum, but they are determined it will take place no
matter what, and confident that Santa Cruz citizens will approve the
autonomy statute with a resounding "SI!" However, leaders are also
aware that May 4 is the beginning of a process, not the end. So far
the government's public stance has been one of denial: to declare
the referendum illegal and ignore the phenomenon that is taking
place.


14. (SBU) Leaders are aware there will be no immediate solutions
starting May 5, and the situation may indeed get worse before it
gets better. They realize that along with the "yes" campaign, they
must dampen expectations and convince citizens to be patient while
the autonomy process moves forward. Leaders are also pleased that
the government agreed to mediation by the Catholic Church, although
they do not expect any dialogue to produce results until after May

4. While they are determined that the new "dialogue" will not
derail the autonomy vote, they know that negotiating with the
government is the only way to shape Bolivia afterwards.