PRESIDENTIAL ADVISOR MILTON JIMENEZ SEES ARRIVAL

C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 000824

SIPDIS

E.O. 12958: DECL: 09/05/2018
TAGS: PGOV PREL EAID EFIN KDEM VE HO
SUBJECT: PRESIDENTIAL ADVISOR MILTON JIMENEZ SEES ARRIVAL
OF NEW AMBASSADOR AS A TIME TO START OVER

Classified By: Charge d'affaires, a.i. Simon Henshaw, reasons 1.4 (b &
d)


1. (C) Summary: Presidential Advisor Milton Jimenez asked
PolCouns for an emergency meeting on the eve of his departure
for Venezuela to sign financing agreements. He explained the
GOH would receive USD 100 million for bonds to be used for
housing projects, and USD 30 million for BANADESA to be used
to for loans to micro and small farmers. The GOH will also
get two Cuban programs involving energy-saving light bulbs
and literacy efforts. Jimenez also wanted to get our
reaction on their accession to ALBA, and to discount nasty
attacks on the USG attributed to him by the press. His main
message, however, was to reiterate the importance of
U.S.-Honduran relations and to send a message that Zelaya
believes the arrival of the new Ambassador is a chance to
start over. End Summary.

ALBA - What Honduras is Getting?
--------------

2. (C) Presidential Advisor Milton Jimenez' told PolCouns
that he was departing for Venezuela on September 7 to sign
several papers regarding bond purchases and funding for the
National Bank for Agricultural Development (Banco Nacional
para de Desarollo Agricola - BANADESA) that Honduras would be
receiving in exchange for signing the Bolivarian Alternative
to the Americas (ALBA) agreement on August 25. Jimenez
explained that the GOH had requested USD500 million in bond
purchases and USD 100 million for Banadesa, but although the
BRV did not dispute these requests, it said the disbursements
would have to be made in annual tranches. (Note: We assume
this is to ensure the GOH stays on a tight leash. End Note.)
The bond proceeds will be used to finance housing projects
through the Social Housing Program (PROVISOL - Programa de
Vivienda Social),which has been in existence for about 18
months and which Jimenez admitted had not been very
successful. He complained that it was too bureaucratic and
it took too long to get things accomplished. Nonetheless,
the Zelaya administration will be pouring over USD 100
million of BRV funds into it shortly. The Banadesa funds
will go directly to micro and small farmers to stimulate
agricultural production.


3. (C) In addition to the financing, Jimenez told us that
ALBA will also bring innovative Cuban programs to Honduras.
First, a brigade of Cubans will start a program to save
electricity through the installation of energy-saving bulbs.
PolCouns recounted her experience with the same program when
it was instituted in Havana, noting that the Cubans hated the
bright white fluorescent light and hoarded their old
yellowish bulbs. She suggested that any program be
accompanied by an educational campaign to sensitize the
public to the energy savings (Jimenez said they were told by
the Cubans each household could save up to 30 percent) and
the new type of bulbs. Jimenez also said the Cubans would be
greatly bolstering their existing literacy program
dramatically, but the Minister of Education still had to
travel to Cuba to negotiate the exact numbers and details.
The project documents and GOH TV propaganda indicate Cubans
will also supply generic medicines to Honduras. It is not
clear at this point whether these programs are on a loan or a
grant basis. But the National Electric Company (ENEE) was
reported to be preparing to procure 4 million compact
fluorescent bulbs last week on an "emergency" basis.

Message from President Zelaya
--------------

4. (C) Jimenez' main point was to state how important
relations with the United States were for Honduras and say
that the arrival of the new Ambassador could serve as a new
starting point. PolCouns thanked Jimenez for accepting our
request that the Ambassador be allowed to present his
credentials the day of his arrival. Jimenez agreed that it
was important to set aside ten minutes before the ceremony
for the President and Ambassador Llorens to talk privately.


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5. (C) Jimenez asked for our honest reaction to Honduras'
accession to ALBA. PolCouns reaffirmed the public talking
points, and stated that as long as the agreement does not
violate CAFTA-DR, that we have no opinion, but added that
investor confidence could be diminished, which could deeply
hurt Honduras. She added, however, that the USG wants our
relationship with Honduras to be based on mutual respect, and
that the actions of Zelaya -- laughing and applauding at
Chavez' insults of the USG at the ALBA ceremony -- were not
in that line of behavior. Jimenez explained these actions by
characterizing Zelaya as "passionate and reactive," which
often gets him into trouble. Jimenez said that Zelaya does
not always think before he acts, and that he would relay the
message to Zelaya and urge him to be more careful in the
future. Jimenez also noted that Zelaya did not like to be
pressured or told what to do, and when PolCouns asked how
Zelaya was responding to Chavez' pressure, such as his public
challenge in Nicaragua to join ALBA, Jimenez had no response.


6. (C) Jimenez lamented the recent press reports where he was
quoted as having said that President Bush was a drunk and
other derogatory statements, and asserted the quotes were
false. He said the Zelaya administration no longer has any
relations with Jorge Canahuati, the publisher of El Heraldo
and La Prensa newspapers, and has strained relations with the
other major media. Jimenez explained that Zelaya feels he
has lost touch with the Embassy and no longer has a channel
of communication to get our feedback on things. Jimenez
confided that Zelaya was upset with Foreign Minister Edmundo
Orellana because he traveled too much and paid no attention
to the U.S. Embassy and our bilateral relations. To remedy
this, PolCouns suggested, and Jimenez heartily agreed, to
establish weekly or biweekly meetings so that any issues that
emerge could be discussed.


7. (C) Jimenez also lamented that in his opinion, private
Honduran businesspeople do not care about their country, but
will do anything to personally get ahead. He mentioned that
the divergent statements made by the two business association
leaders and their memberships sent unhealthy mixed messages,
and said confrontation between the GOH and the private sector
was very dangerous for the country.

Comment
--------------

7. (C) This meeting, called right before Jimenez runs off to
Venezuela to sign agreements, was obviously meant to try to
explain away the GOH actions and take our pulse on ALBA
issues. It was apparent that Jimenez was sent to "make nice"
and try to repair damage, plus send a message that Zelaya
wants to start fresh with the arrival of the new Ambassador.
End Comment.
HENSHAW