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P 302118Z AUG 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 4852
INFO RUEHAC/AMEMBASSY ASUNCION 7042
RUEHBO/AMEMBASSY BOGOTA 4410
RUEHBR/AMEMBASSY BRASILIA 8303
RUEHBU/AMEMBASSY BUENOS AIRES 5534
RUEHCV/AMEMBASSY CARACAS 2761
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RUEHMN/AMEMBASSY MONTEVIDEO 4823
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RUEHQT/AMEMBASSY QUITO 5395
RUEHSG/AMEMBASSY SANTIAGO 0003
RUEHKO/AMEMBASSY TOKYO 0326
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHUB/USINT HAVANA 0509
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUEHBS/USEU BRUSSELS
RUMIAAA/USCINCSO MIAMI FL
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 LA PAZ 002400 

SIPDIS 

SIPDIS 

E.O. 12958: DECL: 08/30/2017 
TAGS: ECON PGOV PREL PHUM EAID BL
SUBJECT: OPPOSITION, OTHERS DEFEND US AID 

REF: A. LA PAZ 2387 
¶B. LA PAZ 2386 

Classified By: A/DCM Mike Hammer for reasons 1.4 (b) and (d). 

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Summary 
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¶1. (U) Following Minister of the Presidency Quintana's August 
29 attacks on USAID in which he accused the USG of supporting 
the opposition and told USAID to get in line with government 
policies or leave the country, the opposition, NGOs and 
pundits are defending USAID and criticizing the government 
for the unwarranted attack. The official State Department 
response to the Bolivian government's accusations has 
received wide coverage, and many editorials are suggesting 
that the MAS attack on USAID is a smokescreen to cover recent 
domestic problems including civic strikes, rising inflation 
and Venezuelan cash assistance. 

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Blowing Smoke 
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¶2. (U) Many political commentators and opposition 
politicians have drawn attention to the timing of Minister 
Quintana's diatribe, coming as it did only a day after six of 
Bolivia's nine departments shut down in strikes against the 
ruling MAS government. The head of the opposition party 
National Unity (UN) Samuel Doria Medina said, "It's an old 
method of (Hugo) Chavez. Every time he has a domestic 
problem, he insults the U.S. government and fights with them. 
It's no coincidence that on Tuesday there was a massive 
strike against the government of Evo Morales, and that now 
Quintana comes out to tell lies and hoaxes." In the words of 
Carlos Hugo Molina, one of the former government officials 
(under Goni Sanchez de Lozada) listed by Quintana as evidence 
that USAID is financing the "old way" and the opposition: 
"They are trying to scare us...this should be denounced at 
international levels." Another USAID contractor, Juan Carlos 
Urenda (a Santa Cruz civic leader) described the MAS 
accusations as an attempt to cast a smokescreen over the 
"serious problems in this country," and opined that this was 
"another mistake of the government that will do no less than 
deepen the differences and confrontations in the country." 

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Pay No Attention to the Venezuelan Behind the Curtain 
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¶3. (C) On August 29, as Minister Quintana criticized USAID's 
"flagrant interference in Bolivian politics", President 
Morales was handing out Venezuelan checks to mayors in the 
department of La Paz. In the past, President Morales has 
publicly called for European, Japanese and U.S. aid to be 
more like Venezuelan aid, which in practice would mean almost 
no accountability or transparency. In his attack on USAID, 
Minister Quintana praised European aid for being transparent 
and for following Bolivian laws. Although Quintana did not 
directly mention Venezuelan aid, the MAS is clearly 
responding to criticism of the increasing Venezuelan 
influence in the country. The official government news 
source ABI on August 30 ran an article describing how 
President Morales has been handing out "cooperation checks" 
from Venezuela and Europe. This attempted conflation of 
Venezuelan and European aid seems to be a MAS attempt to both 
isolate the United States and justify its acceptance of 
increasing Venezuelan involvement in the country. Following 
Quintana's presentation, Vice President Garcia Linera 
announced that the Bolivian government will push for a new 
law to control the destination of international aid and will 

LA PAZ 00002400 002 OF 003 


investigate the programs of all international aid in Bolivia. 


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Biting the Hand that Continues to Feed You 
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¶4. (U) Many Bolivians are concerned about the more immediate 
and concrete impact that could result from poking a stick at 
the United States. The Bolivian External Trade Institute 
(IBCE) is concerned for the future of ATPDEA, pointing out 
that Bolivia is even now preparing a proposal for the 
extension of ATPDEA trade preferences. IBCE head Gary 
Rodriguez stated, "We understand that the (Bolivian) 
Government doesn't need trade preferences, but the workers do 
need them, as do entrepreneurs who seek to consolidate and 
not lose free access for their exports." 

¶5. (C) More directly, many observers are pointing out that 
Bolivia cannot afford to risk USD120 million in assistance 
from USAID. Few are suggesting that all USAID assistance 
could be lost, but concerns are rife that funding could be 
reduced in the future. While Morales and the MAS may be 
willing to wave goodbye to our assistance, other officials 
either doubt that Venezuela will step up to completely fill 
the gap or, pragmatically, see a benefit in receiving as much 
aid as possible from various sources. (Comment: At a time 
when Vice President Linera is heading to Washington to, among 
other issues, push for Millennium Challenge aid to Bolivia 
and a continuation of ATPDEA trade benefits, the timing of 
the attacks against the USG seems self-defeating. End 
comment.) 

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Next Target: NAS Assistance 
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¶6. (C) Minister Quintana also announced his "suspicions of 
U.S. double morality" in the fight against drugs, questioning 
the U.S. focus on cocaine in Bolivia while claiming that 
marijuana is not part of counternarcotics programs here. 
Quintana said that the Bolivian government is investigating 
NAS assistance and will publish their findings in the 
following weeks. (Comment: It is understandable that a 
government whose president is also the head of the 
coca-growers union would turn its sights on NAS's programs. 
Considering the egregious accusations that the Bolivian 
government has just leveled at USAID, we expect that their 
'investigation' of NAS will be equally rigorous. End 
comment.) 


- - - - 
Comment 
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¶7. (C) In the wake of Quintana's press conference, USAID has 
received an outpouring of support. Many partner NGOs are 
publicly challenging the government's accusations, and some 
have requested more information from USAID in order to 
repudiate the MAS stance. Morale in USAID could take a hit, 
particularly among the Bolivian locally-engaged staff, some 
of whom fear that after Quintana's threats and insinuations 
about 'traitors' who 'sell out their country', they may be 
targeted by the MAS in the future. Their fears are not 
unfounded, considering that Quintana named USAID contractors, 
listed their posts in previous governments, and accused them 
of working against the MAS program of change. To address 
initial concerns and assure employees of USG support, USAID 
held an all-hands staff meeting right after Quintana's press 
briefing. The Ambassador will hold a mission wide townhall 
meeting immediately upon his return to La Paz. 

LA PAZ 00002400 003 OF 003 


URS