VZCZCXRO5218
OO RUEHRG
DE RUEHBR #0880/01 1791541
ZNY CCCCC ZZH
O 271541Z JUN 08
FM AMEMBASSY BRASILIA
TO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 2000
INFO RUEHAC/AMEMBASSY ASUNCION 6924
RUEHBO/AMEMBASSY BOGOTA 4639
RUEHBU/AMEMBASSY BUENOS AIRES 5649
RUEHCV/AMEMBASSY CARACAS 4164
RUEHLP/AMEMBASSY LA PAZ 6347
RUEHPE/AMEMBASSY LIMA 3872
RUEHMN/AMEMBASSY MONTEVIDEO 7439
RUEHQT/AMEMBASSY QUITO 2530
RUEHSG/AMEMBASSY SANTIAGO 0442
RUEHRG/AMCONSUL RECIFE 8213
RUEHRI/AMCONSUL RIO DE JANEIRO 6341
RUEHSO/AMCONSUL SAO PAULO 2331
RUEHUB/USINT HAVANA 0055

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 000880 

SIPDIS 

DEPARTMENT FOR WHA A/S SHANNON AND BSC, NSC FOR TOMASULO 

E.O. 12958: DECL: 06/27/2018 
TAGS: PREL ENRG BO BR
SUBJECT: BRAZILIAN PRESIDENTIAL ADVISOR PROMISES TO RAISE 
BOLIVIA SECURITY CONCERNS 

REF: A. STATE 65088 
¶B. BRASILIA 834 

Classified By: Ambassador Clifford M. Sobel, reason 1.4 (b) and (d) 

¶1. (C) The Ambassador met with Brazilian presidential Foreign 
Policy Advisor Marco Aurelio Garcia on June 25 to express our 
concern regarding the Bolivian government's lack of concrete 
assurances to protect our embassy in La Paz. Garcia promised 
to raise the issue with the Bolivian ambassador (which he did 
immediately after meeting with the Ambassador) and with 
higher levels in the Bolivian government. He also said he 
would bring the request to President Lula's attention. 
Garcia said that, in his view, Bolivia is at a dangerous time 
and is in for a lengthy period of increased instability. He 
encouraged the USG to offer the Bolivian government gestures 
that clearly signal we are fully neutral between the Bolivian 
government and opposition. Garcia also told the Ambassador 
that President Lula's trip to Venezuela was focused on 
commercial cooperation, that he did not see Raul Castro 
making any additional changes in response to the EU lifting 
of sanctions, and that President Bush and President Lula 
should take up cooperation on biofuels at their meeting 
during the G-8 in Japan. End Summary. 

¶2. (C) The Ambassador, accompanied by PolCouns (notetaker) 
met with Marco Aurelio Garcia on June 25 to deliver points 
ref a. Garcia was accompanied by advisors Ambassador Marcel 
Biato and Elio de Almeida Cardoso. After conveying 
condolences on the death of former first lady Ruth Cardoso, 
the Ambassador explained to Garcia our concerns with regard 
to the security of our embassy in Bolivia and requested 
Brazil's assistance. (Note: The day before, Ministry of 
Foreign Relations Under Secretary for South America Enio 
Cordeiro had called to follow-up his conversation with the 
Ambassador, ref b. Cordeiro said he had spoken with the 
Colombian vice minister of foreign affairs regarding the 
security of the U.S. embassy, and they had agreed that the 
best approach to the Bolivian government would be through the 
Papal Nuncio. End note.) 

¶3. (C) The Ambassador asked for Garcia's assessment of the 
situation. Garcia said that the current problems stem in 
part from President Morales having come to office acting "as 
if it were a revolution." His polemics have been a factor in 
instability, Garcia said, but the instability already 
existed, noting he had visited Bolivia twelve times during 
President Lula's first term, and had met with four 
presidents. Bolivia's institutional problems remain, and 
there has been no effort on either side to follow established 
procedures. The opposition is controlled by a "hard" 
element, on the one hand. On the other, the government has 
refused to differentiate between opposition hard-liners and 
"modern rightists" like Tuto Quiroga. So instead of 
resolving issues, Garcia said, each side has hardened their 
position, and they are beyond hearing each other. 

¶4. (C) As a result, a new stalemate has developed. This will 
continue, Garcia predicted, even after the August 10 
referendum--if the referendum happens at all. He explained 
that the questioning of the referendum's legitimacy by the 
opposition provinces called into question whether it would 
even take place. Garcia said it is his personal opinion that 
Bolivia faces enormous dangers now. The intention of the 
opposition, he believes, is to make the central government 
irrelevant, to "make it bleed," so it will be brought down by 
"non-institutional means." He said the government might in 
fact fall, but only "within the established timeframes." 
Opposition efforts to force it out of power would not work. 
In any case, Garcia believes a long period of instability is 
going to ensue that, like a flammable gas in the air, could 
be set off by even a small spark. The fact is that Bolivia 
is going through major social and political change, which is 
hard to control. 


BRASILIA 00000880 002 OF 003 


¶5. (C) Garcia said that many Brazilians were surprised by 
Morales' confrontational posture toward Brazil early on, and 
it had required a great deal of patience to put the 
relationship back on track and establish a frank dialogue. 
Brazil has told the Bolivian government that it needs to tone 
down the rhetoric and resolve its disputes if it wants to 
make progress toward what Morales wants to achieve. The 
government has a reasonable macroeconomic situation, he said, 
but needs to make sure that the current economic growth is 
more than just a bubble. As a result, its ability to attract 
investment--and particularly to maximize its energy 
potential--is crucial. In the latter case, in particular, it 
will run into problems not only in filling contracts with 
Brazil and Argentina, but also in supplying its growing 
domestic needs. 

¶6. (C) The Ambassador said that Bolivia needs to understand 
that companies, including Brazilian companies, will not 
invest when they see our embassy under attack. Garcia 
acknowledged the point, saying that he had pushed Petrobras 
to go back into Bolivia in part as a sign to other investors. 
The Ambassador asked if Garcia thought that the breakdown of 
stability and security in Bolivia would hurt foreign 
companies there. He responded that many companies have a 
solid commitment and long-term perspective. Heavyweight 
investors know that the conflict "won't go beyond a certain 
point," and whichever side wins out, Bolivia will need 
investment. Petrobras has not lost any money there, he 
concluded. 

¶7. (C) Garcia said he would deliver the message to the 
Bolivians, noting that he would be meeting with the Bolivian 
ambassador following the meeting with Ambassador Sobel. 
Garcia suggested that, "Maybe it is time (for the United 
States) to have a frank discussion with Bolivia," adding that 
"Tom (Shannon) is well-respected in Bolivia." He cannot see 
how conflict with the United States is beneficial to Bolivia, 
he said. The Ambassador suggested that it might serve as a 
distraction for the Bolivian government's domestic problems. 
Garcia took the point, but said that in the long run, they 
would gain in some ways but lose in others. 

¶8. (C) "We bet on dialogue," Garcia stressed, suggesting that 
a "mutual non-aggression pact" was in order. The Ambassador 
responded that public support for the security of our embassy 
would undoubtedly open other channels for dialogue, but 
stressed that security of our embassy cannot be open for 
discussion. Garcia agreed. But he cautioned that we should 
"not underestimate anti-Americanism in some circles." 
("There's an old joke we used to tell," he said: "Why hasn't 
there ever been a coup in the United States? Because they 
don't have an American embassy.") He said that the United 
States needs to offer a sign that we are not on anyone's 
side, something that would increase American credibility 
vis-a-vis the Bolivian government. Without wishing to be a 
mediator, he said, Brazil is willing to help in whatever it 
can, recalling a similar commitment he made to A/S Shannon 
two years earlier. He suggested that Brazil had a hand in 
encouraging Venezuelan President Chavez to lower his tone and 
become "less present" today on the issue. Chavez understood 
that his efforts were too invasive and ultimately 
counterproductive. 

¶9. (C) Coming back to the request, Garcia said the Bolivian 
ambassador in Brasilia was "very professional" and he would 
sound him out. He also committed to raising the request with 
President Lula, adding he knew that A/S Shannon had raised 
the issue with Brazilian Ambassador Patriota in Washington. 
(Note: In a readout on June 26, Amb. Biato said that Garcia 
had had a long meeting with the Bolivian ambassador and had 
made clear that it was important for the Bolivian government 
to cease provoking the United States and to make amends. 
Garcia had stressed that conflict could not be helpful to the 
Bolivians. Biato reiterated that Garcia intended to raise 
the issue with President Lula and with "higher levels" in 

BRASILIA 00000880 003 OF 003 


Bolivia. End note.) 

¶10. (C) The Ambassador asked about President Lula's 
priorities for his June 27 meeting with President Chavez. 
Garcia said that Chavez is seeking an import substitution 
model for Venezuelan agriculture and development, and the two 
presidents will discuss ten projects that are still being 
developed in the areas of steel production, integrated 
circuits, television, and plastics, among others. In 
agriculture, the Venezuelans are looking to work with Brazil 
to develop either family farms or large-scale (i.e., 80,000 
ha.) soy farms. They are also interested in dairy and 
poultry. The ultimate goal for Chavez, he said, is food 
security, and the Venezuelans are trying to create the 
infrastructure for the entire food production chain, using 
both public and private investment. As an aside, Garcia said 
that Venezuela's new finance minister, Ali Rodriguez, "is 
different" in that he is knowledgeable and can talk directly 
to Chavez. 

¶11. (C) The Ambassador asked what Garcia thought would come 
of the EU decision to lift its sanctions. Garcia said he did 
not see Raul Castro giving any type of concession to foreign 
pressure, and that the EU move was a sign that there is a 
perception Cuba is changing. He noted that in Brazil, both 
businesses and the press that had been critical of Brazil's 
Cuba policy have changed their tune. Businesses are now 
interested in investing, and there is less criticism in the 
press. 

¶12. (C) The Ambassador raised biofuels, stressing that 
although many would like to divide Brazil and the United 
States on the issue, we would like to continue working 
together. He recalled that Civil Household Minister Dilma 
Rousseff had pressed for President Bush to attend the 
renewables conference that Brazil plans to host in November, 
and asked what the objective would be. Garcia said that 
Presidents Bush and Lula should take the issue up again at 
the G-8 in Japan. (Comment: It has become clear over the 
course of conversations with foreign ministry and presidency 
officials that Brazil is still in the initial stages of 
planning the conference; they have asked for USG input on the 
agenda and objectives. End comment.) After Garcia departed 
to meet with the Bolivian ambassador, the Ambassador stressed 
to Biato that Brazil's effort to distinguish between corn and 
cane ethanol was not productive, and that our focus should be 
on the future of biofuels. Biato stressed that President 
Lula was not intending to go to Rome for the FAO conference, 
but had done so in the end when the focus of criticism fell 
on ethanol. The draft speech he had taken with him to Rome 
had been "toughened up" there. Biato said he could not 
predict how Lula would react to the idea of lowering the tone 
on this issue. (Comment: Other contacts, however, have told 
us they do expect Lula to back away from this line. End 
comment.) 

SOBEL