WE'RE RUDE, WE'RE NUDE, WE WANT OUR '99 NISSANS

C O N F I D E N T I A L LA PAZ 000072

SIPDIS

E.O. 12958: DECL: 01/14/2019
TAGS: PGOV ECON PREL SENV BL
SUBJECT: WE'RE RUDE, WE'RE NUDE, WE WANT OUR '99 NISSANS

Classified By: A/EcoPol Chief Joe Relk for reasons 1.4 (b,d.)


1. (C) SUMMARY. The Bolivian government is facing massive
protests - some in the nude - relating to a December
Presidential decree relating to used car imports. The decree
limits the importation of used cars older than five years
into Bolivia. Importers have been protesting for weeks,
including one demonstration on January 12 where a mechanic
died after being shot in the neck by a rubber bullet
discharged by riot police. The Vice Minister of
Transportation Jose Kinn told EconOff that the Government
hadn't expected such an outcry, but they will not be
rescinding the decree. The decree further caused problems
with the Chileans, who claimed the now-banned used cars
destined for Bolivia were jamming up their ports and roads.
After a special Chilean delegation came to work out the
problem, Finance Minister Luis Arce announced on January 14
that the decree would stand as is, with Chilean support.
Further protests are expected, especially as Import-Export
Chamber President Gary Rodriguez criticized the Government
for their Chilean deal, saying that the delegation
"apparently mattered more than the people marching in the
streets." END SUMMARY.

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THE DEVIL'S IN THE DECRETO
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2. (U) Decree 29836 was enact December 3, 2008. It
specifically says that previous decrees relating to the
importation of used autos did not establish what age of
vehicle could enter the country and that 10,000 cars a month
enter Bolivia causing "gasoline shortages, health problems,
and pollution that has further damaged the ozone layer." The
decree limits the importation of diesel vehicles and vehicles
over five years old. While most of the public statements
relating to the ban point to traffic as the main impetus for
the decree, Vice Minister of Transportation Jose Kinn told
EconOff January 5 that the country-wide gasoline shortages
sparked the decree. He said that they did not expect the
outcry that has ensued and that his office has been flooded
with importers complaining about the new law.

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TRANSFORMERS: LEMONS IN DISGUISE
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3. (U) In addition to the importers, thousands of Bolivian
mechanics make a living by "transforming" cars that come into
Bolivia from Asia from right-hand drive to left-hand drive.
Recent reports suggest that nearly 60 percent of mechanics
that perform the transformations will lose their jobs, 600 in
El Alto alone. "This is humanly, technically and economically
impossible for us," Luis Vargas, head of a mechanics union,
told the press, after his group and others blocked three
kilometers of road on the Bolivian-Chilean border, demanding
that the Government allow in more than 1,200 vehicles waiting
to enter the country. The importers want the decree to be
changed to allow for vehicles seven years and younger to
enter, instead of the current five year limit.


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NO SHIRT, NO SHOES, NO SEDANS
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4. (U) Groups of importers almost immediately began
protesting the decree. Since it was released, several
demonstrations have taken place, including one on January 12
that the riot police had to disperse with tear gas and rubber
bullets. One protester was killed when a rubber bullet struck
his neck. Several groups announced that they would not only
protest at the Public Works Ministry, but they would do so
without clothing. About 3000 shirtless demonstrators arrived
in La Paz from Cochabamba on January 8. Other protesters
staged hunger strikes in La Paz.


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CHILE: STOP CLOGGING THE SEA ACCESS WE TOOK FROM YOU
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5. (C) Chilean officials were also none too pleased with the
decree, as Bolivia-bound cars began to wash up in their
customs bay and at their border posts. Ministry of Foreign
Affairs (MFA) Legal Officer Paola Melendrez (strictly
protect) told PolOff on January 7 that the MFA had been told
to "make the issue go away" until after the January 25
referendum on the new constitution. A special delegation
arrived from Chile January 13 to discuss the problem, and
eventually Finance Minister Luis Arce announced that the
decree would stand but would be "grandfathered in," with
Chilean support. Arce said that importers need only show the
International Cargo Manifest and the Bill of Landing to
Bolivian customs to prove that the vehicles landed in Chile
before the December 4th decree date to enter. Gary Rodriguez,
who heads the Import-Export Chamber, criticized the decision,
and further riled up the demonstrators by saying that the
Government respects the Chilean government more than the
Bolivian people.

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COMMENT
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6. (C) These protests do not come at a good time for Morales,
who is focused on maintaining a calm before the January 25
constitutional referendum. Additionally, relations with Chile
remain a sensitive topic for most Bolivians, as talks of
allowing Bolivian access to the sea linger on. While the
decree is not without merit, it seemed to spring from no
where and with no warning, giving several thousand Bolivians
a taste of the "govern by decree" methods Morales has
threatened to use in the months to come. END COMMENT.
URS