Cablegate: State of the Union

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UNCLAS LA PAZ 002120

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL ECON BL
SUBJECT: STATE OF THE UNION

1. (SBU) Summary: In a rambling two and a half hour state of the
union address kicking off the August 5 Constituent Assembly
festivities in Sucre, Bolivia's historic capital, President Morales
reviewed his accomplishments to date: delivery of the Constituent
Assembly, economic stability and government austerity,
nationalization of hydrocarbons, and success fighting corruption and
cocaine trafficking. On patriotic grounds, he defended his decision
to purge high level military officers who transferred MANPADS to the
United States for destruction, and at other points offered a couple
of implicit digs at the United States - while paying homage to the
Cuban government. He demonstrated impatience with his opponents,
offering up a domestic visa scandal as the pretext for further
politicization of government ministries, and indicated he would not
let institutional impediments block implementation of his policy
platform. Confrontation, not consensus, was the unifying theme of
the discourse. End summary.

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ATMOSPHERICS
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2. (SBU) President Morales' August 5th state of the union address
kicking-off Constituent Assembly festivities came following a week
of criticism in the press for inadequate preparation of the host
city, with many members of the assembly reportedly sharing hotel
rooms or remaining without accommodations. In an address to his
party faithful, many former and present GOB officials, and national
leaders, Morales, who broke his nose earlier in the week in a soccer
game, seemed somewhat fatigued but spoke for almost two and a half
hours, periodically wiping sweat from his brow.

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HYDROCARBONS AND THE ECONOMY
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3. (SBU) Morales highlighted his accomplishments in office to date.
He said that he fulfilled his promise to deliver the Constituent
Assembly and a referendum on departmental autonomy. He cited
Bolivia's current economic stability and his May 1 hydrocarbons
nationalization as key successes, principally for the positive
impact the additional hydrocarbons revenues will have on state
finances. Apparently straying from prepared remarks, he underscored
his own independence in claiming that he nationalized hydrocarbons
contrary to Cuban President Castro's advice to postpone action until
after the Constituent Assembly. The benefits of this policy were
immediately evident, he argued, with a dramatic increase in
government revenues offering the prospect of an immediate
improvement in the lives of ordinary Bolivians. With this in mind,
he underscored that he expected ministries to work hard to spend
these increased revenues, and offered a sly dig at his vice
president for not focusing sufficiently on the needs of the Bolivian
people.

4. (SBU) He criticized Bolivia's prefects (including the three
belonging to the MAS) for not spending available funds for the
people's benefit. He blasted his own cabinet for failures, such a
slow progress on the construction of homes and irrigation systems,
warning that "heads will roll" if immediate action is not taken. He
continued his attacks on the press, the "corrupt" opposition and
traditional political parties, and the Catholic Church, arguing that
the GOB's new network of 30 radio stations is necessary so that "not
only the rich and the church" have access to information.

5. (SBU) He reminded listeners that the MAS had long sought
nationalization and that opposition parties had opposed modifying
the hydrocarbons law in 2005. Morales proudly noted that salary
cuts in the government had improved its budget environment; he
underscored that he had accomplished these cuts while increasing
salaries in the health and education sectors, leading to labor peace
in these sectors for the first time in memory.

--------------------------------------------- -
ANTI-CORRUPTION, OPPOSITION AND THE GOVERNMENT
--------------------------------------------- -

6. (SBU) Morales touted his anti-corruption campaign, which the
audience approved with a smattering of applause. He responded by
quipping that "those not clapping may be implicated by my efforts."
He attacked opposition stronghold Santa Cruz for not fighting
corruption, and noted that Brazilians were illegally occupying
GOB-owned land along the border, a neuralgic issue in
sovereignty-obsessed Bolivia. He also railed against the kidnapping
of several GOB ministers in Santa Cruz earlier this year. In an
ironic turn of events, he also criticized the people of Santa Cruz
for conducting blockades (a tactic that he perfected while seeking
political power in recent years).

7. (SBU) Morales cited a budding MFA visa-selling scandal as a
pretext for further attacks on the professional civil service,
incorrectly asserting that because the responsible officials
belonged to an institutionalized ministry, they cannot be fired. He
promised to introduce new legislation to de-institutionalize GOB
ministries, opening the door to further politicization. Finally, he
mentioned the transfer of MANPADS to the United States in October
2005, stating that he could not allow the previous military high
command to remain in their positions after their involvement in the
transfer. He said former President Rodriguez knew the "Embassy was
managing [the Armed Forces] with thousands of dollars" and that the
GOB could not permit the disarming of its armed forces.

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ANTI-DRUG EFFORTS
---------------------

8. (SBU) Morales also boasted about his efforts to fight illegal
cocaine traffic without recourse to coercion. He said when he
entered office many thought he would "cocalize Bolivia, cocaine-ize
Bolivia." Instead, he said the GOB had confiscated over 8 metric
tons of cocaine, and significant quantities of marijuana, while
maintaining social peace. Making a veiled reference to the United
States, he said the international community should note that
campesinos do not have to die in order for Bolivia to avoid
decertification. He also said rationalization efforts would soon
begin in earnest. (Comment: eradication rates, which Morales calls
"rationalization" remain significantly down from last year while
cocaine and marijuana seizures have indeed risen significantly. To
date, new plantings of coca appears to be outrunning eradication
efforts. End comment.)

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OUR FRIENDS IN HAVANA - AND CARACAS
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9. (SBU) Morales paid lengthy homage to the Cuban government,
focusing on Cuban assistance and lauding Cuban solidarity with the
Bolivian people. He described many Cuban aid efforts, including
Cuba's resident doctors in Bolivia, literacy programs, scholarships
for Bolivian medical students, and the construction of several
hospitals. According to Morales, Cuban doctors have performed eye
operations on over 26,000 Bolivians free of charge.

10. (SBU) Beyond recognizing Cuban assistance, Morales thanked many
countries for their aid without reference to their relative
significance as donors. While he prominently cited Venezuelan aid,
he initially omitted mention of the United States. Later in his
speech, he briefly and with almost palpable reluctance mentioned
U.S. disaster assistance and health programs. Morales dismissed the
prospect of a free trade agreement with the United States as "not
the solution" to creating economic growth and noted that Bolivia
already has trade agreements with Cuba and Venezuela. He said the
GOB is looking for new markets in the event ATPDEA is not extended.

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COMMENT: PREACHING TO THE CHOIR
---------------------------------

11. (SBU) With this speech, President Morales once again showed his
gift for focusing on the concerns of his core, economically
marginal, constituency. He cleverly blamed the institutions of
government for failure while taking personal credit for a lengthy
list of governmental accomplishments. Most ominously, Morales
repeatedly cited the presence of institutional checks and balances
as an explanation for government failings. While many of the
achievements he cited were symbolic, additional hydrocarbons
revenues will indeed offer him continuing flexibility in the months
ahead. It is true that Morales has benefited from a political
honeymoon and a large measure of social peace in recent months.
Nonetheless, expectations continue to rise, particularly regarding
what the Constituent Assembly will accomplish. The pressure to
deliver upon these expectations will only grow in the months ahead.
End comment.

GREENLEE

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