GOB "SUSPENDS" USAID DEMOCRACY PROGRAMS

C O N F I D E N T I A L LA PAZ 001027

SIPDIS

E.O. 12958: DECL: 07/10/2019
TAGS: PGOV PREL KDEM PHUM PINR ENVR SOCI BL
SUBJECT: GOB "SUSPENDS" USAID DEMOCRACY PROGRAMS

Classified By: CDA James Creagan for reasons 1.4 (b, d)


1. (C) This is an action request. See paragraph 9.


2. (C) Summary: Citing "orders from above," GOB Planning and
Development Minister Noel Aguirre on July 9 delivered a
letter to CDA Creagan suspending all USAID democracy programs
as of July 15. Aguirre acknowledged such a decision could
negatively impact the next session of the ongoing bilateral
talks but said he had to deliver the message. Embassy
recommends further discussion with the GOB on the specific
ramifications of this decision, as the specific meaning of
the suspension is not entirely clear and as several of the
affected programs appear to be of great value to the GOB and
their supporters. However, Embassy also cautions that this
action should not be seen as an aberration or hiccup in
bilateral relations, but rather a reflection of values held
at the highest levels of the GOB. In a June 27 meeting with
Special Envoy to Bolivia Maria Echaveste, influential
Presidency Minister Juan Ramon Quintana proposed "leaving
USAID in the freezer" while forming "new rules" for economic
development that would not include USAID. Embassy also
requests guidance on a response, in the form of a diplomatic
note, to the GOB letter. End summary.

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Democracy Programs to "Remain Without Effect"
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3. (C) On July 9, at roughly the same time as President
Morales was telling news media that "President Obama should
maintain diplomatic relations without interference," Planning
and Development Minister Noel Aguirre somewhat apologetically
delivered an official letter to CDA James Creagan and Acting
USAID Director John Niemeyer, stating that as of July 15, all
of USAID's democracy programs "remain without effect" ("queda
sin efecto"). In conversation, Aguirre referred to the July
15 deadline as a "suspension", but at this time it is unclear
exactly what the GOB desires or which USAID programs would
actually be affected.


4. (C) There is recent context for this announcement. In a
June 27 meeting with the Secretary's Special Envoy to Bolivia
Maria Echaveste, Presidency Minister Juan Ramon Quintana made
a litany of negative accusations regarding USAID democracy
programs. During the meeting, Quintana brandished a
PowerPoint demonstration printout that, he said, listed the
myriad ways in which USAID was plotting to bring down the
Morales government. "They work unstintingly to hurt our
standing among the people, even meeting with
'pseudo-indigenous' leaders to plot against us," he said.
Quintana rattled off the names of seven members of former
President Gonzalo Sanchez de Lozada's administration who he
said were working for NGOs funded by USAID. (Notes: The
Morales administration is actively pursuing the former
president's extradition from the United States. Also,
Quintana is familiar with USAID working practices, having
himself worked with a former USAID implementing partner. End
notes.) With this, he accused USAID of making "clandestine
efforts" to bring down the government and raised the
question, "Is it better for our relations that USAID exist
here, or leave?" He suggested we define new rules for
economic development that would not involve USAID, proposing
"we leave USAID in the freezer."


5. (C) In the July 9 meeting with Minister Aguirre, CDA
Creagan underscored the importance of the democracy programs
to the Bolivian people and the potential negative impact of
such a decision by the GOB on the ongoing bilateral talks,
but Aguirre seemed unauthorized to make a formal response.
Instead, he repeated Quintana's talking points from the June
27 meeting with Special Envoy Echaveste, maintaining that
USAID was employing opposition leaders to undermine the
government. He dismissed CDA Creagan's statements that
people hired for USAID democracy programs were selected based
solely on expertise and not on political affiliation.
Responding to charges by Aguirre (and Quintana) that USAID
was not transparent, Creagan noted that USAID representatives
had held lengthy discussions on program operations with the
GOB's Vice Minister for Foreign Financing and others, with
discussions totalling some 20 hours. While it seemed the
Minister was not aware of such outreach efforts, he generally
repeated what appeared to be the "party line." When Acting
Director Niemeyer offered to provide more information to the
GOB regarding the democracy programs (although such
information has been offered to the GOB before),Aguirre
agreed to accept the information but repeated that "the
decision on the Democracy program has been made."


6. (C) After stating that the decision was out of his hands,
Aguirre did agree the fate of the democracy programs would be
subject to further discussion during the bilateral talks.
"The need is to look to the future," Aguirre said. CDA
Creagan agreed and urged Aguirre to communicate to others in
the GOB the potential negative impact suspension (or
cancellation) of USAID's democracy component in Bolivia could
have on funding for other programs. Explaining that AID
programs were funded by our Congress, CDA said formal GOB
termination of the democracy programs could result in a
Congressional movement to transfer a significant amount of
USAID's Bolivia funding to other countries. He urged Aguirre
and GOB decision makers to "keep the door open" to further
discussion.

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Programs At Risk
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7. (C) While the GOB letter did not specify exactly which
programs it considered to be suspended (as Democracy
programs),USAID considers the following programs to be
potentially affected:

-- Access to Justice (including the Integrated Justice
Centers, previously lauded publicly by President Morales for
their effectiveness)
-- Political Party Work (including work by the National
Democratic Institute (NDI) and the International Republican
Institute (IRI))
-- Conflict Mitigation
-- Municipal Strengthening (activities planned with close
support of municipalities throughout the country, including
many supported by the ruling Movement Toward Socialism (MAS)
party)
-- Election Monitoring and Support for the National Electoral
Court (including support for election monitoring by
international observers including the Carter Center, the
Organization of American States, and local NGOs such as
Bolivia Transparente, among others)
-- Support for Civil Society

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Next Steps
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8. (C) Embassy recommends against any USG actions or
statements in the short-term that could be characterized in
the Bolivian press as inflammatory or that would help the GOB
"play the victim" publicly, especially as the letter is not
specific about which specific programs are to be suspended,
or even whether the GOB is requesting the programs' temporary
suspension or permanent termination. Further, while the
situation could change quickly, the GOB has not yet made this
request public, which could suggest room for negotiation.
(Note: The effective date for suspension of USAID democracy
programs is July 15, a day before President Morales is
scheduled to make an independence day address that could
touch on bilateral relations. End note.)


9. (C) Action request: Embassy requests guidance on a
response, in the form of a diplomatic note, to the GOB
letter. (See text of the GOB letter below.) We intend to
respond formally through the Foreign Ministry, even though
the letter was from the Ministry of Planning and Development.
Embassy suggests requesting further discussion with GOB
representatives on precisely which components of the programs
are to be suspended, after the GOB representatives have had
time to review information we will submit on USAID democracy
and governance programs. We believe the GOB will wish to
keep certain programs, such as Access to Justice. Embassy of
course would be pleased to provide a draft text for the
diplomatic note.

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Comment
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10. (C) Given that past indicators often point to future
results, and against the backdrop of several serious GOB
actions without good explanation (e.g. the expulsions of
Ambassador Goldberg, the DEA, Frank Martinez, and USAID
programs in the Chapare, in addition to an ongoing program to
oust USAID from El Alto),Embassy notes its concern over this
GOB effort to suspend (or terminate) USAID democracy programs
in the middle of ongoing bilateral discussions. Despite the
recent meetings between Special Envoy Echaveste and
high-level GOB representatives, including President Morales,
the GOB continues to publicly castigate the USG. Foreign
Minister Choquehuanca said July 7 that "we no longer believe
U.S. negotiators" and that "President Obama is worse than
President Bush." The recent USG decision not to restore
ATPDEA benefits also triggered intense negative GOB rhetoric
and may have contributed to this action.


11. (C) While we affirm the need for bilateral talks to help
normalize relations and do not feel this most recent action
should derail the discussions, we also recommend development
of a contingency plan in case the GOB halts bilateral talks
or fails to act in good faith. Such a contingency plan would
analyze how best to implement USG interests in Bolivia, to
include counternarcotics programming, preserving democratic
institutions (i.e. prevent Bolivia from becoming a failed
state),and basic humanitarian aid, in case the GOB turns
away from collaborating in the bilateral discussions in favor
of continuing its antagonistic posture.

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GOB Letter Text (Translated)
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12. (U) Text of letter follows:

Ministry of Planning and Development

La Paz, July 9, 2009

To: Mr. John R. Niemeyer, USAID Director

Through this letter and by decision of the national
government, permit me to communicate to you that from July 15
of the present year, the democracy program authorized by
USAID shall remain without effect.

At the same time, we reiterate our request that you remit to
us detailed reports relating to the following programs:

--Economic Opportunity
--Democracy
--Health
--Environment
--Alternative Development

With appreciation for your kind attention, I send you my most
sincere regards.

Noel Aguirre Ledezma

CREAGAN