SMORGASBORD: NUMBER THREE AT MFA ON P5 AND IRAN,

C O N F I D E N T I A L SANTIAGO 000583

SIPDIS

E.O. 12958: DECL: 06/17/2018
TAGS: PGOV PREL CI
SUBJECT: SMORGASBORD: NUMBER THREE AT MFA ON P5 AND IRAN,
PARAGUAY AND BOLIVIA, BACHELET IN CUBA, AIRBASE IN PERU,
KOSOVO RECOGNITION

REF: A. STATE 064530

B. SANTIAGO 745

C. SANTIAGO 148

Classified By: E/Pol Counselor Juan A. Alsace for reasons 1.4 (b) and (
d).

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Summary
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1. (C) Chile shares international concern over Iran's nuclear
program, agrees the P5 1 package of incentives is generous,
and recognizes continued Iranian isolation is the logical
outcome should it refuse the package. Chile is prepared to
offer the new administration in Asuncion technical assistance
and share Chilean expertise in areas such as modernization of
state institutions, improving education and health, and
instituting phytosanitary controls. The GOC is very much
preoccupied over Bolivia's center-regions autonomy dispute
but sees the "democratically-elected and still popular
Morales" as the best guarantee for Bolivia's long term
stability. Should Bachelet visit Cuba, she will "certainly"
meet with opposition figures. Chile has made no decision on
recognizing Kosovo and continues to "study the matter." End
summary.


2. (U) Ambassador Simons called June 18 on Ambassador Juan
Pablo Lira, who recently took up his position as Director
General for External Relations, the third ranking job at the
MFA. Lira was joined by Ignacio Gonzalez, Director for
Middle East and African Affairs; Jose Gonzalez, Lira's Chief
of Staff; Julio Bravo of the MFA's Office for Special
Policies; and, Francisco del Campo, the North America desk
officer. The Ambassador was accompanied by E/Pol Counselor.

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P5 1 Offer to Iran
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3. (C) The Ambassador opened by delivering ref A demarche
points, emphasizing that the package of incentives to Iran is
"very generous." The international community understands
that Iran wants recognition as a key regional player. This
package "of carrots" offers Iran that acceptance, once it has
lain aside its nuclear arms ambitions. Sanctions will be
raised once verification of compliance with IAEA requirements
is clear. Secretary Rice has stressed she is willing to meet
with the Iranian leadership "on all issues" upon compliance.
The P5 1 has made a "good offer" but one that also
demonstrates there are "no outliers" on this issue; Iran
faces a unified front. Lira mused as to what would happen
should Iran refuse the offer. The Ambassador said its
international isolation would continue, a fact Iran itself
recognizes as it seeks to withdraw its funds from European
banks, fearful the monies will be frozen pursuant to
European-backed sanctions. Ignacio Gonzalez suggested that
perhaps the IAEA wasn't as concerned as the P5 1. E/Pol
Counselor noted IAEA Director El Baredi had been in Santiago
several months before and had made clear then, in a public
forum, that the IAEA suspected the Iranians were less than
forthcoming, to the very evident displeasure of the Iranian
ambassador to Chile. Bravo agreed, adding that Chile - an
IAEA Board Governor - had supported issuance of the last IAEA
report, which strongly questioned Iranian good faith.

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Lending a Hand to Lugo
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4. (C) The Ambassador said he had recently spoken with
President Bachelet's international affairs advisor, who said
the MFA was preparing a package of potential assistance
measures for the new Lugo administration in Paraguay.
Washington agencies are interested in the details of Chilean
outreach to Lugo. Lira replied Bachelet had had a "very
frank and cordial" conversation with the president-elect in
Lima, where the two had attended the May 2008 EU-Latin
American Summit meetings. While the initial GOC concern had
been that Lugo would fall into the Chavez camp, that


conversation - and subsequent ones with Lugo's advisors - had
provided the Chileans with a better sense of Lugo's
direction. Lugo understood he would be hobbled by having to
accommodate the views of a diverse coalition and a still
powerful Colorado-party led opposition. According to Lira,
Lugo was willing to negotiate and, indeed, saw himself as a
"transitional" figure between the decades of Colorado party
rule and genuine democracy. Lugo had apparently expressed to
Bachelet his government's desire to draw on the "Chilean
model" in making that transition.


5. (C) Turning to notes, Lira said Chile is considering
measures - after consultation with Lugo's advisors - in areas
such as education, health care, and phytosanitary regulation.
It is hard, Lira cautioned, to "transmit recipes for
success, however." He noted, for example, that Chile's
national police has effectively tackled issues such as
delinquency. But the Caribineros are a long-standing
institution with a reputation for probity. Paraguay is rife
with corruption so employing police there to address social
ills is problematic. There are no easy solutions but Chile
believes making the effort worthwhile, as helping Lugo
succeed will further regional stability. The new Paraguayan
FM-elect has also told the GOC she wants to follow the
Chilean model. Lugo will come to Chile before he takes
office and the MFA will use that visit to clarify how Chile
can be of help. Lira added Bachelet would lead the Chilean
delegation to Lugo's August 15 inauguration.

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Not Giving Up On Morales
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6. (C) The Ambassador, noting he was not speaking under
instructions, said that President Bachelet enjoyed some
influence over Evo Morales, and then detailed USG concerns
over the failure of the GOB to provide adequate security for
our Embassy in La Paz. Lira said the Chileans understood and
would do what they could. Lira continued that Chile's
relationship with Bolivia is "very important," noting that
northern Chilean port cities such as Iquique and Arica
depended heavily on trade with Bolivia. Chile is concerned
about Bolivia's internal political instability. While
recognizing that aspirations for autonomy in the Bolivian
Sierra have popular support, Morales is the "democratically
elected" president who maintains overall majority support
nationwide. He has done a good job negotiating energy
accords with Argentina and his government is one of the least
unstable with which Chile has dealt in recent years. Lira
observed that regular bilateral talks at the Vice FM level
were proceeding "as we speak" including on the sensitive
issue of Bolivia's access to the sea claims. The Chilean and
Bolivian defense ministers had also just signed the day
before an accord on defense cooperation (septel).

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Hugo on Best Behavior
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7. (C) Lira asked what is the USG take on "Hugo's recent
apparent conversion", observing that the Venezuelan president
has been "behaving himself" since the March 2008 Rio Group
meeting in the Dominican Republic. The Ambassador replied
that, in his view, the Reyes tapes had played a significant
role in affecting the behavior of both Chavez and Correa.
The implicit threat of being placed on the USG supporters of
terrorism list may also have sobered Chavez, who does not
want to be isolated internationally. The FARC's weakening
position may also be a factor, as were Chavez's own internal
domestic problems. Lira agreed with the Ambassador's
analysis, adding that there are also whisperings that some
within the Venezuelan military may be tiring of Chavez. Jose
Gonzalez said that while Chavez might have to deal with some
squabbling within his support, his political opposition is
hopelessly divided. Lira noted that when Bachelet had
visited Caracas in April 2007, she had met with some of the
opposition, an experience she had described as "being in a
bagful of cats."

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Bachelet to Cuba?
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8. (C) E/Pol Counselor asked if Bachelet would similarly meet
with Cuban dissidents in Havana, should she travel there in
February 2009, as has been widely reported (ref B). Lira was
emphatic in saying she would. "It is the custom" for her to
do such meetings, adding "if she does go."

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U.S. Assistance to Peru
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9. (C) Lira asked about a June 16 press report that the U.S.
is building an airbase in Peru, implicit to stationing U.S.
assets there. The Ambassador said it is true the USG is
helping Peru refurbish a small airstrip in Ayacucho
Department. It is meant to assist Peru in its
counter-narcotics and counter-terrorism efforts. It will not
be a U.S. base. E/Pol Counselor added that DASD Johnson had
spoken earlier in the day with MOD U/S of War Gonzalo Garcia
to also explain the purpose of the U.S. assistance to Peru.

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No Movement on Kosovo
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10. (C) E/Pol Counselor asked if Chile had yet made a
decision on recognizing Kosovo, noting past demarches (ref
C). Lira said that there had been extensive discussion of
the issue at the EU-Latin American Summit in Lima with the
Germans and others ("a Serbian minister had been very active
lobbying against") but, in short "sin novedad" (nothing new).
The issue is still being studied and we expect no decision
before the UNGA in September.
SIMONS