ARTURO ZABLAH TALKING WITH ARENA, DOWNPLAYS VP

C O N F I D E N T I A L SAN SALVADOR 000827 SIPDIS E.O. 12958: DECL: 07/09/2018 TAGS: PGOV PREL ES SUBJECT: ARTURO ZABLAH TALKING WITH ARENA, DOWNPLAYS VP ASPIRATIONS REF: SAN SALVADOR 263 AND PREVIOUS Classified By: The Ambassador, for reasons 1.4 (b) and (d) ¶1. (C) Summary: Arturo Zablah, who had explored a presidential run representing a coalition of minor parties, told us July 9 that rumors he had agreed to be (conservative, pro-U.S.) ARENA presidential candidate Rodrigo Avila's running mate were not true, but that he would meet with Avila the next day. Zablah outlined the economic policies he believes the GOES should pursue and, together with Ernesto Rivas Gallont, discounted the possibility of (leftist) FMLN candidate Mauricio Funes controlling the FMLN should he win the Salvadoran Presidency. End Summary. ¶2. (C) DCM, Political and Public Affairs Counselors met July 9 with Ernesto Rivas Gallont and Arturo Zablah. Rivas Gallont, former Salvadoran Ambassador in Washington and now political commentator and blogger in San Salvador, hosted in order to update us on Zablah's prospects for involvement in Rodrigo Avila's campaign for President. Zablah, a Georgia Tech graduate, is owner and director of Salvadoran furniture and mattress manufacturer Capri and served in the Cristiani government (1989-1993) as Minister of Economy and later as Presidential Commissioner for International Trade Negotiations. Zablah had explored the prospect of a run for the Salvadoran Presidency with the support of two or three small, centrist Salvadoran parties (reftel) but abandoned that pursuit over the last several months as it was impossible to form a meaningful coalition among them. Zablah's name popped back up in the Salvador political rumor mill and in the press this week as a strong contender for Avila's running mate. ¶3. (C) Zablah denied he had agreed to be Avila's running mate. However, he told us in strict confidence that he would meet secretly July 10 with Avila, Saca Chief of Staff Elmer Charlaix, and a facilitator well known to all three (Rafael Alvarado, President of cement manufacturer CESSA) in order to discuss his support for and possible involvement in the Avila campaign. Zablah downplayed expectations of a place on the ticket but Rivas Gallont, clearly advocating for Zablah, suggested he could attract ten to fifteen percent of voters who are now undecided. Rivas Gallont noted that what Zablah brought to the table, unlike others such as Salvador Samayoa or Roberto Rubio (both former FMLN members who are also considered possible ARENA VP candidates) was the network of supporters and sympathizers developed during his exploration of a presidential run. (Note: In September 2007, Zablah launched his efforts with a well-developed plan of government that he used as a discussion point with civic groups, professional organizations and university groups around El Salvador.) ¶4. (C) Zablah outlined the economic issues he believes are critical to El Salvador and his proposed solutions, echoing themes from his earlier pre-campaign. Dollarization, he said, is done, and is exacerbating problems faced by the Salvadoran economy, especially rising debt levels for the GOES. Dollarization, per se, could not be undone, but he speculated that a pan-Central American currency based on a basket of currencies including both the U.S. Dollar and the Euro, could leave the region and El Salvador less vulnerable to the currency shocks being experienced now. Zablah lamented the low level of trade between El Salvador and Europe (El Salvador trades more with Guatemala than all of Europe, he noted) and pointed out that El Salvador's trade deficit has increased steadily for a number of years. He lamented the steady decline in the purchasing power of the minimum wage since the 1992 peace accords and said he would urge the GOES to move quickly to increase significantly both pensions and the minimum wage. ¶5. (C) Both Rivas Gallont and Zablah discounted any possibility that Mauricio Funes, the FMLN's presidential candidate, would have control over the FMLN should he win the election. Zablah recalled a recent episode in which several FMLN deputies proposed a bill in the Legislative Assembly that would give the GOES carte blanche to nationalize and redistribute land. Funes told the press the following day that this bill did not represent the FMLN's position; he was contradicted in the next news cycle by his own running mate (and head of the FMLN's delegation in the Legislative Assembly). Zablah noted that the FMLN had recently begun importing high-grade unleaded gasoline to complement ongoing imports of diesel from Venezuela. Given the favorable terms provided, he continued, the FMLN could have a significant financial war chest for the 2009 elections. ¶6. (C) Finally, both Rivas Gallont and Zablah expected big news out of the planned ARENA event at the Cuscatlan Stadium planned for Sunday, July 13, possibly including Avila announcing his running mate. ¶7. (C) Comment: In pursuing a run for the presidency, Zablah had set his sights high and while some might see accepting the VP slot on ARENA's ticket as a step down, we believe he would jump at the chance if the conditions -- and policies -- were right. Indeed, he would be far more likely to reach the levers of power as Avila's running mate than heading his own ticket. (We have since heard rumors that Zablah has told Avila's team he would accept the VP slot if given "influence" over economic policy, but that ARENA has offered control over social policy, instead.) Whether or not Zablah plays a role in Avila's campaign, he has repeatedly made it clear to us that his first priority is to ensure the FMLN does not win the March 2009 vote. GLAZER