REGIONAL TENSIONS MOVE PARAGUAY TO CANCEL NEW HORIZONS

C O N F I D E N T I A L ASUNCION 000569

SIPDIS

E.O. 12958: DECL: 2019/09/11
TAGS: PREL MASS PGOV MOPS PA
SUBJECT: REGIONAL TENSIONS MOVE PARAGUAY TO CANCEL NEW HORIZONS
EXCERCISE IN 2010

CLASSIFIED BY: Perry Holloway, DCM; REASON: 1.4(A),(D)


1. (C) SUMMARY: The GOP declined a USG a 2010 DOD-sponsored
training and humanitarian exercise due to regional tensions over
the Colombia-U.S. Defense Cooperation Agreement (DCA). President
Lugo's moderate stance on the DCA agreement at Union of South
American Nations (UNASUR) meetings received criticisms from the
Presidents of Venezuela and Ecuador. Lugo's position on the DCA,
combined with his need to negotiate a better deal for Paraguay's
300 million-plus USD oil debt with Venezuela, left Paraguay little
choice but to cancel this exercise which would involve more than
400 DOD personnel and would be used to fan significant anti-U.S.
sentiment. At the same time, all signs indicate that Paraguay
wants to continue all other planned mil to mil activities with the
USG and Embassy does not believe that this is a weakening of our
overall relationship with Paraguay. Embassy continues to engage
Paraguay on formally defining our broader mil-to-mil relationship
and also on ensuring that our DOD personnel are adequately
protected when in Paraguay. END SUMMARY.



-------------- --------------

DOUBTS AROSE ABOUT NEW HORIZONS

-------------- --------------




2. (C) Since late 2008, post has been planning for a mid-2010 New
Horizons training and humanitarian exercise involving more than 400
DOD personnel, very similar to the last New Horizons exercise in
Paraguay in 2004. Paraguay's service chiefs were supporting
planning for the exercise. However, due to recent regional
discussions at the Union of South American Nations (UNASUR in
Spanish) regarding the Colombian-U.S. Defense Cooperation Agreement
(DCA),GOP reservations about supporting a New Horizons exercise
began to emerge. Significant numbers of mission planners,
contracting personnel, engineers and others (over 50 in the next
three weeks) were slated to begin arriving to refine the planning
and logistics for the exercise. Embassy did not want USG to spend
significant funding on planning an exercise that would later be
cancelled by the GOP. As a result, in recent weeks Ambassador and
EmbOffs began to vigorously engage a number of GOP ministers and
the Joint Chief of Staff for the Paraguayan Armed Forces to see if
they supported New Horizons at this time.



-------------- --------------

PARAGUAY CANCELS DUE TO REGIONAL CONCERNS

-------------- --------------
-




3. (C) Late September 9, the Ministers of Defense and Foreign
Affairs, the Joint Chief, and Service Chiefs met with President
Lugo on defense issues, including New Horizons. After meeting, GOP
Joint Chief told us that in light of regional concerns about the
U.S. presence in Colombia and the size of the exercise, they could
not agree to such a joint operation. He said that they would
continue all other planned mil to mil programs and looked forward
to working closely with us in the future. He stressed that
Paraguay wanted our cooperation, but urged us to watch "the size"
of our projects to not inflame negative regional sentiments.
COMMENT: Shortly after being elected last year, President Lugo had
asked the Ambassador for this type of humanitarian assistance,
telling us that he saw it as an opportunity to strengthen
Paraguayan military's civil affairs capacity, particularly in
neglected areas of the country. However, the number of US troops
coming in clearly gave Paraguay cold feet in light of all the
regional issues. END COMMENT


-------------- --------------
--------------

COLOMBIA-U.S. DCA AND OIL DEBT CONTRIBUTE TO DECISION

-------------- --------------
--------------




4. (C) At the first UNASUR meeting discussing the DCA, Paraguay
clearly defended Colombia's right to sign a base access agreement
with the U.S., and said that the DCA was plainly a bilateral issue
between Colombia and the U.S. Lugo himself told the Ambassador
after that UNASUR meeting that if UNASUR does this to Colombia, it
should look at other agreements in the region, like Venezuela's
agreement with Iran or Bolivia's significant pending arms purchases
from Russia. Lugo also told Ambassador that he was chastised by
Presidents Chavez and Correa for not vigorously supporting their
position on the DCA. At the most recent UNASUR meeting, while Lugo
did not vigorously defend Colombia's right to sign the DCA, he also
did not clearly go over to the Chavez/Correa position. COMMENT:
It is important to note that Paraguay is currently renegotiating
its more than $300 million oil debt with Venezuela, which is
Paraguay's almost sole supplier of fuel. This oil debt, along with
Lugo's support to Colombia and the U.S. on the DCA issue, may have
left him little choice but to reject New Horizons at this time.
END COMMENT).



-------------- --------------

MOD MOST CONCERNED ABOUT NEW HORIZONS

-------------- --------------




5. (C) Ministers of Health and Education and service chiefs
expressed initial support for the exercise, but we should note that
MOD Bareiro has been reluctant to discuss the exercise. Embassy
sources indicate that MOD is sympathetic to the far left and is the
person representing Paraguay at the upcoming UNASUR Security
Council meeting in Quito next week. At the time the decision to
cancel New Horizons was made, Paraguay was being visited by the
Bolivian Ministers of Defense and Foreign Affairs to discuss
Paraguay's concerns regarding Bolivia's plans for significant arms
purchases from Russia.



-------------- --------------

ROBUST MIL TO MIL PROGRAM CONTINUES

-------------- --------------




6. (C) COMMENT: Embassy does not believe that the GOP's decision
to decline New Horizons is a negative signal to us in our overall
relationship or our in our mil-to-mil relationship. We believe
that this is more a timing issue exacerbated by regional tensions
over the Colombia-U.S. DCA. Embassy will continue a regular dialog
with Paraguay on the full range of military issues and we will seek
input from the GOP as to how we can implement New Horizons-like
exercises in the future. We believe the Paraguayan Joint Chief was
sincere when he told us that our normal mil to mil activities will
continue and we have heard nothing from the President or Foreign
Minister to indicate otherwise. We are engaging Paraguay on how
we can improve and formalize our broader mil-to-mil relationship
and ensure that our DOD personnel are adequately protected when in
Paraguay. Ambassador personally called USSOUTHCOM Commander
General Frasier to personally apprise them of this development.
END COMMENT.
AYALDE