CORREA'S PARAGUAY VISIT PRODUCTIVE AND

C O N F I D E N T I A L ASUNCION 000185

SIPDIS

STATE FOR WHA/BSC MDASCHBACH

E.O. 12958: DECL: 12/31/2034
TAGS: PREL PGOV EC PA
SUBJECT: CORREA'S PARAGUAY VISIT PRODUCTIVE AND
CONTROVERSIAL

REF: A. 08 ASUNCION 00721

B. 08 ASUNCION 00512

C. ASUNCION 00008

Classified By: DCM Michael J. Fitzpatrick for reasons 1.4 (b) and (d).

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SUMMARY
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1. (C) During his March 23-24 visit to Paraguay, Ecuadorian
President Rafael Correa signed three bilateral accords,
unleashed populist rhetoric, bashed the press and
"traditional" politicians, offered Paraguay free advice on
renegotiating the Itaipu Dam treaty with Brazil, and
exchanged medals of honor with Lugo. Correa's visit was
short both in time and in substance, and surprisingly
low-profile. Lugo stood quietly by during Correa's
discourses, neither affirming nor denying his visitor's
message as Lugo is oft to do. END SUMMARY.

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EVENTFUL TRIP FOR CORREA
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2. (U) Ecuadorian President Rafael Correa met with President
Fernando Lugo and Congressional leaders during his March
23-24 visit to Paraguay, the first foreign head of state
visit here since Lugo's August 2008 inauguration. Lugo and
Correa signed three bilateral accords, and traveled to Itapua
Department together March 24 to visit Encarnacion and the
Jesuit Ruins at Trinidad. Correa delivered a populist speech
to Paraguay's Movement Toward Socialism (P-MAS) supporters
and students at the National University of Asuncion, and
awarded Lugo the "Grand Collar of the National Order of Merit
of Ecuador." Lugo reciprocally bestowed on Correa the
"Marshall Francisco Solano Lopez National Order of Merit"
Medal.

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PARAGUAY AND ECUADOR SIGN ACCORDS
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3. (U) Paraguay and Ecuador signed bilateral agreements
March 23 on recovering stolen cultural property; consular
affairs, migration, and extradition; and establishing a
cooperative link between Paraguay's Investment and Exports
Network (REDIEX) and Ecuador's Corporation for the Promotion
of Exports and Investments (CORPEI). In contrast to the
previous misstep with the Venezuelan accords, the Lugo
administration officially forwarded the text of the
agreements to Congress the following day (ref A).

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CORREA DELIVERS POPULIST RHETORIC
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4. (SBU) Correa repeatedly spoke during his visit of "21st
Century Socialism," and "welcomed" Paraguay to the Bolivarian
Revolution. He told the Paraguayan press March 23 the
purpose of his visit was to "deepen the new (political)
direction being undertaken by Ecuador, Venezuela, Bolivia,
Paraguay, Nicaragua, El Salvador, including Argentina and
Uruguay." Correa said that "this a new direction in Latin
America unwilling to be blind to reality. Socialism of the
21st Century has emerged as a response to fictitious and
corrupt democracies that governed our countries and to the
prescriptions of the multilateral agencies of the North that
did not take into account the reality of serving the people.
We carried out a radical and peaceful revolution. Our
bullets are the ballots. We defeated neo-liberalism and
international organizations, which were the right hand of the
domatinating policy of the North."


5. (U) Correa told an audience of P-MAS supporters and
students at the National University of Asuncion March 23 that
Lugo is an adherent of 21st Century Socialism, and that Lugo
"is a revolutionary, a person whose origin is in liberation
theology." Correa linked some of Paraguay's founding fathers
(Pedro Juan Caballero, Fulgencio Yegros, and Ignacio Iturbe),
to Chavez' Bolivarian Revolution, and said that "nothing is
more revolutionary in our America than our insurgent
history." (NOTE: Caballero, Yegros, and Iturbe were members
of Paraguay's original junta that declared independence from
Spain in 1811. END NOTE.)


6. (SBU) The Paraguayan press reported that Lugo praised
Correa for breaking up "the framework of traditional

politics, whose values are not always in agreement with the
great dreams of prosperity." Lugo spoke of drawing "a new
political map in Latin America," and stated that, "In our
country the disastrous neo-liberal policies of the 1990's
produced economic exile of hundreds of thousands of
Ecuadorians and Paraguayans." Lugo said that Correa and he
seek "to overcome the firewall of the miraculous lies from
those who use their recipes to kill us and who with their
recipes pretend to revive us." (NOTE: The press widely
interpreted this to mean the IMF. END NOTE.) Correa
attacked "traditional" politicians for their lack of economic
experience, and accused them of being "sadists" who run
"sado-democracies." Correa also harshly criticized the press
during his visit; the Paraguayan media, which had just hosted
the Inter-American Press Association's annual conference
(where Correa had been criticized),was only more than
willing to fire back, con gusto (septel).

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CORREA'S ADVICE ON ITAIPU
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7. (U) Correa also used his trip to apply public pressure on
Brazil. He declared that Paraguay has the right to revise
the Itaipu Dam Treaty with Brazil. He told the press March
24 that he once spoke "tangentially" with Brazilian President
Luiz Inacio Lula da Silva about the issue, and that Lula was
open to revising the treaty. Correa noted that Ecuador's own
dam dispute with Brazil could affect Brazil's willingness to
negotiate with Paraguay on Itaipu. (NOTE: Ecuador and
Brazil are at an impasse over Ecuador's San Francisco
Hydroelectrical Plant. END NOTE.) Correa asserted that
during Ecuador's negotiations with Brazil, "there was an
exaggeration by the Brazilian government on the basis of
wrong information."

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COMMENT
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8. (C) Correa's visit was short both in time and in
substance, and surprisingly low-profile. Lugo stood quietly
by during Correa's discourses, neither affirming nor denying
his visitor's message as Lugo is oft to do. The bilateral
agreements signed by Lugo and Correa are non-controversial --
unlike Correa's broadsides at the media. Most media
coverage, in fact, related to Correa's attacks on the media
rather than the substance of his visit here. Correa's visit
is yet another example of Lugo appeasing the political left
by letting them shape his image publicly rather than
asserting himself as a moderate (refs B and C). Lugo's
administration is more pragmatic than belies the carefully
crouched, if populist, rhetoric used during Correa's visit.
END COMMENT.

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