FUNES MEETS WITH CHAVEZ, RELATIONSHIP WILL IMPROVE

C O N F I D E N T I A L SAN SALVADOR 000462 SIPDIS E.O. 12958: DECL: 05/22/2019 TAGS: PGOV PREL ES SUBJECT: FUNES MEETS WITH CHAVEZ, RELATIONSHIP WILL IMPROVE Classified By: Charge d'Affaires, for reasons 1.4 (b) and (d) ¶1. (C) Summary: Salvadoran Foreign Minister-designate Hugo Martinez told PolCouns May 21 that he and President-elect Mauricio Funes approached their May 20 meeting with Venezuelan President Hugo Chavez with trepidation, but Chavez was welcoming and respectful, and the meeting went smoothly. Martinez said Chavez repeatedly offered Venezuelan support to the incoming Funes administration. He said Funes told Chavez that El Salvador would not participate in the ALBA Petroleos joint venture between Petroleos de Venezuela (PDVSA) and some (left-wing) FMLN-controlled municipalities. He did not rule out Petrocaribe, because it offers more benefits than fuel imports, but would not commit to anything beyond a study assessing a potential deal. Martinez also said the new Central American office of EMBRAPA, the Brazilian Agricultural Research Corporation, will now be located in El Salvador, instead of Panama, as had previously been planned. Funes has yet to determine the full extent of his incoming administration's relationship with Venezuela, and must balance the benefits of working with Chavez with the damage that association could do to his relations with other countries. End Summary. ¶2. (SBU) PolCouns met May 21 with Salvadoran Legislative Assembly Deputy, Funes Transition Team member, and FM-designate Hugo Martinez. Martinez confirmed that he will lead the Salvadoran delegation at the OAS General Assembly in Honduras June 2, and that Salvadoran OAS Ambassador (and former Foreign Minister) Francisco "Pancho" Lainez would accompany him. He said the MFA has been informed as well, so the cat is soon to be out of the bag about his future as Foreign Minister. ¶3. (C) Martinez said President-elect Mauricio Funes' meeting with Venezuelan President Hugo Chavez had gone "well" (it lasted five hours),noting that both he and Funes were anxious going into the meeting because of Chavez' reputation for erratic behavior. Martinez described Chavez as warm and "respectful," especially when discussing possible Venezuelan assistance to El Salvador. Martinez said Chavez told Funes several times that Venezuela was willing to support El Salvador in various ways "if you want, where you want, how you want, and at the pace you want." Chavez, he said, was engaging and had a friendly banter with Funes, Vice President-elect Sanchez Ceren, and others in the meeting. ¶4. (C) Martinez said Funes told Chavez the GOES would not join or participate in the ALBA Petroleos joint venture between PDVSA and FMLN-controlled municipalities, which imports fuels on preferential terms. Funes did undertake to establish a commission to study the possibility of joining Petrocaribe. Martinez believes joining Petrocaribe is more likely because it involves not just fuel imports, but also development assistance and other benefits. However, no decision has been made, Martinez said. He added that there was some discussion of possible medical assistance along the lines of Operacion Milagro, which provides low- or no-cost eye surgery ) financed by Venezuela and carried out in Cuba. ¶5. (C) Martinez said a decision was made to redirect the planned Central American office of EMBRAPA, the Brazilian Agricultural Research Corporation, from Panama to El Salvador. Martinez suggested this decision was taken in the context of a Brazil-Venezuela cooperative development effort. (Note: The Funes administration will likely have a strong relationship with Brazil. Funes' wife, Vanda Pignato, is Brazilian, and is very close to Brazilian President Lula. End Note.) ¶6. (C) Martinez said Venezuela and El Salvador would exchange ambassadors, upgrading relations from the Charge level. ¶7. (C) Martinez said the delegation had returned late the previous night, flying commercial via Panama. Martinez said most if not all the delegation was stuck in economy class ) a change from frequent trips during the campaign ) because there was no space in business class. Chavez, he said, had offered his private plane to return Funes et al to San Salvador, but Martinez said Funes demurred, wanting to transmit a clear message that while Salvadoran-Venezuelan relations were one thing, being shuttled around on a GBRV plane was a step too far. ¶8. (C) Comment: We understand Funes had planned to cancel his trip to Venezuela, as he did with the other planned legs to Colombia and Mexico, but clearly felt some degree of pressure to visit Caracas from within the FMLN. Ceding the Caracas trip to the FMLN can be seen as a way to relieve pressure from the party on cabinet selections. Funes is still feeling out how involved he wants his administration to be with Venezuela. Despite Martinez' claims that the visit was amicable, he did mention Funes' anxiety going in, and that apprehension was evident in media coverage of the events. Funes recognizes that Venezuela represents a source of cheap petroleum products, but does not want to alienate other allies. BLAU