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DE RUEHLP #0597/01 0612038
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P 022038Z MAR 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 2707
INFO RUEHAC/AMEMBASSY ASUNCION 6602
RUEHBO/AMEMBASSY BOGOTA 3923
RUEHBR/AMEMBASSY BRASILIA 7811
RUEHBU/AMEMBASSY BUENOS AIRES 5057
RUEHCV/AMEMBASSY CARACAS 2292
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RUEHMD/AMEMBASSY MADRID 3355
RUEHMN/AMEMBASSY MONTEVIDEO 4458
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RUEHSG/AMEMBASSY SANTIAGO 9521
RUEHUB/USINT HAVANA 0191
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUMIAAA/USCINCSO MIAMI FL
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L LA PAZ 000597 

SIPDIS 

SIPDIS 

E.O. 12958: DECL: 03/03/2017 
TAGS: ECON PGOV PREL SNAR BL
SUBJECT: MORALES TO TOBIAS: THANKS FOR THE ASSISTANCE 

Classified By: DCM Kris Urs for reasons 1.4 (b) and (d). 

-------- 
SUMMARY 
-------- 

¶1. (C) As part of Director of Foreign Assistance and USAID 
Administrator Randall Tobias' visit to Bolivia, President 
Morales met with Tobias, WHA PDAS Charles Shapiro, and 
Ambassador Goldberg early March 2. Morales thanked 
Ambassador Tobias for U.S. natural disaster assistance, 
saying that this year's flooding is the worst Bolivia has 
seen in 60 years. On the bilateral relationship in general, 
Morales said Bolivia wants an "excellent relationship" with 
the United States. Ambassadors Tobias and Shapiro offered 
support for Bolivia's goal of a more inclusive society, but 
Tobias noted that the goal should be placed in the context of 
a democracy that includes all Bolivians. Morales asked for 
aid in creating jobs and improving infrastructure and said he 
has "great interest" in the Millennium Challenge Account 
(MCA) and in an additional ATPDEA extension. Morales 
described Bolivia's many marches and blockades as largely 
local problems and accused opposition party Podemos of 
organizing them and plotting against his government. Morales 
thanked Ambassador Tobias for USAID assistance, highlighting 
alternative development and infrastructure programs in 
particular. Ambassador Tobias noted both countries' interest 
in close counternarcotics cooperation and acknowledged the 
GOB's interdiction efforts; Morales responded by saying his 
government is serious about fighting narcotics trafficking. 
Morales spoke in terms of a net reduction of coca and said 
his government plans to work harder in the Yungas; he also 
stressed the GOB's desire for closer counternarcotics 
cooperation with the United States. In an unprecedented move, 
Morales joined Tobias for a joint press conference following 
the meeting and publicly thanked the USG for disaster 
assistance and general cooperation. In perhaps the Embassy's 
most positive meeting with Morales to date, the president 
repeatedly thanked Tobias (both privately and publicly) for 
U.S. assistance and seemed to appreciate the finer points of 
USAID operations in Bolivia. End summary. 

------------------- 
DISASTER ASSISTANCE 
------------------- 

¶2. (C) As part of Director of Foreign Assistance and USAID 
Administrator Randall Tobias' visit to Bolivia, President 
Morales (along with Amcit MFA trade advisor Tom Kruse) met 
with Tobias, WHA PDAS Charles Shapiro, and Ambassador 
Goldberg early March 2. Morales thanked Ambassador Tobias 
for U.S. natural disaster assistance, saying that this year's 
flooding is the worst Bolivia has seen in 60 years. Morales 
said he is "very grateful" for the international cooperation 
Bolivia has received. Ambassador Tobias conveyed the 
sympathy of the American people for Bolivia's flooding 
victims and informed Morales that two relief planes will 
arrive March 5 to provide additional assistance. Tobias said 
the USG is glad to have the opportunity to help Bolivia in 
its time of need. Morales thanked Tobias for two additional 
plane loads of assistance and said food rations and donations 
will be needed for approximately six months in some areas, 
until Bolivians can begin to recover from the disasters. 

------------------------- 
BILATERAL RELATIONSHIP 
------------------------- 

¶3. (C) On the bilateral relationship in general, Morales said 
he wants an "excellent relationship" with the United States. 
He explained that Bolivia has a culture of dialogue and that 
debate is welcome. Morales said that while sometimes the 
press wants to generate conflict between us, he wants the 
"maximum level of cooperation with the USG." He acknowledged 
that the United States is the most developed country in the 
world, but noted that the United States faces environmental 
challenges, implying that the United States could learn from 
the Bolivians about how to live at peace with nature. 
Ambassadors Tobias and Shapiro offered support for Bolivia's 
goal of a more inclusive society, but Tobias noted that the 
goal should be placed in the context of a democracy that 
includes all Bolivians. Ambassador Tobias emphasized the 
long relationship between Bolivia and the United States, 
which he said the United States values and wants to continue. 
Tobias told Morales that the United States and Bolivia have 
many things in common, and that they should continue to work 
to find common interests. 

¶4. (C) Morales asked for aid in creating jobs and improving 
infrastructure and said he has "great interest" in the 
Millennium Challenge Account (MCA) (particularly for a 
highway from La Paz to Pando via Beni) and in an additional 
ATPDEA extension. Morales thanked Tobias for Congress' 
extension of ATPDEA benefits and said Bolivia wants commerce 
with the United States so it can export goods to the U.S. 
market. He noted that as developed and developing countries, 
the United States and Bolivia complement each other well. 
Morales also acknowledged the United States' prominent role 
in international institutions including the World Bank and 
the IDB, and said he was grateful for that assistance. 
Morales said Bolivia's macroeconomic stability has improved 
overall, largely due to increased hydrocarbons revenues, but 
not enough to create sufficient jobs. He also pointed out 
that his government's hydrocarbons' nationalization did not 
include expropriation of property or assets. Ambassador 
Tobias responded by saying that the USG is working hard to 
improve lives, create jobs and increase investment in 
Bolivia. We recognize that a stable economy is key to those 
goals, he said. Tobias also encouraged Morales to 
aggressively pursue a MCC proprosal. He emphasized that his 
visit should be read as a strong signal that the United 
States wants to work with Bolivia toward these goals. 

------------- 
SOCIAL UNREST 
------------- 

¶5. (C) Morales described Bolivia's many marches and blockades 
as largely local problems and accused opposition party 
Podemos of organizing them and plotting against his 
government. He said that in contrast to protests over the 
past year, the marches he led prior to becoming president 
were "apolitical"-- in support of human rights, coca, and 
other causes. He said the Bolivian people received his 
marches warmly by supporting the marchers and providing them 
with food. Morales lamented the most violent conflict in his 
administration to date-- the October 2006 conflict between 
miners in Huanuni. Before the conflict, Morales said he 
personally met with miners more than 15 times. He said he 
told both sides that he would work to help them but that they 
would have to work together. Morales regretted that they 
couldn't, calling the violence the "worst moment" in his 
administration. 

-------------- 
USAID SUPPORT 
-------------- 

¶6. (C) Morales thanked Ambassador Tobias for USAID 
assistance, highlighting alternative development programs in 
particular. He noted the current high prices for 
Chapare-produced palm hearts, as well as the GOB's desire to 
export more bananas. Morales said Bolivia wants to export 
alternative development products, as successes in alternative 
development reduce coca cultivation. He mentioned the 
importance of a good infrastructure for alternative 
development projects, and thanked Tobias for USAID assistance 
in constructing a road in the Chapare. While stating that 
the GOB "wants to maximize U.S. cooperation," Morales 
suggested that USAID assistance could be more efficient. He 
said that for the cost of one USAID-constructed soccer field, 
the GOB could have built three. (NOTE: Morales made this 
argument previously and Ambassador Goldberg responded via 
letter to explain that our numbers indicated otherwise). 
Morales also mentioned health and education as critical areas 
for international cooperation in Bolivia. 

¶7. (C) After expressing gratitude for USAID assistance, 
Morales indicated that he would prefer that international 
assistance be donated to the central government, not 
Bolivia's prefects or mayors. He said he would like to 
establish a type of open registry to monitor aid, not for 
purposes of controlling it but for the benefit of Bolivia's 
development process. He said it would be useful to know the 
amount of USAID assistance in Bolivia and what the money is 
spent on. 

-------------------- 
COCA: MORE IS LESS? 
-------------------- 

¶8. (C) Ambassador Tobias highlighted both countries' interest 
in close counternarcotics cooperation and acknowledged the 
GOB's interdiction efforts. He said that while the United 
States remains concerned that any increase in coca 
cultivation will go to the illegal drug trade, he looked 
forward to continuing to work through those issues with the 
GOB. Morales responded by saying his government is serious 
about fighting narcotics trafficking. He said that although 
he has been accused of being a narcotrafficker, the GOB 
policy is "zero cocaine, zero drugs." He said in Bolivia, 
"one can't talk about zero coca." At the same time, he said, 
his government's respect for the traditional use of coca does 
not imply unrestricted growth. Morales also explained that 
cocaine is not part of Bolivia's indigenous culture. 

¶9. (C) In giving Ambassador Tobias some of his personal 
history, Morales said he was not born a cocalero but moved to 
Chapare in 1979-80 after completing his mandatory military 
service. His family, he said, focused on rice production but 
also grew a few catos of coca on the side. Because of 
globalization and increased international trade in the 
1980's, Brazilian rice became cheaper than Bolivian rice, 
thus damaging his family's business. He recounted that in 
those years of hyperinflation, people had to sell large 
bundles of bananas to buy a coke or a beer. Morales said 
eradication with government compensation failed because 
people became accustomed to being paid large sums of money, 
"like by a bank." In Morales' opinion, militarization also 
failed, as it led to permanent confrontation without results. 
These failures, Morales said, led him to suggest one cato of 
coca per affiliate to limit production of coca and to prevent 
conflict. He said that when he speaks to the Six Federations 
(the main coca labor organization in the Chapare), he tells 
them if they fail to respect the cato of coca, the GOB will 
have to return to militarization. He said this serves as a 
strong deterrent. 

¶10. (C) Regarding the GOB's future plans, Morales spoke in 
terms of a net reduction of coca and said his government 
plans to work harder in the Yungas (particularly in La Asunta 
and in Caranavi). He also stressed the GOB's desire for 
closer counternarcotics cooperation with the United States. 
Morales lamented a lack of progress in the Yungas but said he 
hoped the situation would improve. He thanked the USG for 
its help eradicating in Bolivia's national parks, calling 
counternarcotics a "shared responsibility." Morales, 
however, also defended the GOB's proposal to raise the legal 
limits of coca production to 20,000 hectares, saying it is 
"impossible to guarantee 10,000- 12,000 hectares of coca" but 
that 20,000 hectares is a more realistic goal. Likewise, he 
defended the GOB's human rights-conscious policy of 
"rationalization," or voluntary eradication, stating that 
statistics show that the process is more effective if it is 
voluntary. While Morales admitted increased coca cultivation 
in some areas, he maintained those cases are the exception 
and not the rule. Morales said he knows if he fails, the 
United Nations and United States will be watching. In 
response to Ambassador Tobias' inquiry about how much coca 
should be approved for traditional uses under ideal 
circumstances, Morales replied "less than 20,000 hectares." 
He admitted, however, that the European Union's legal demand 
study was "stuck." Overall, Morales said, he is optimistic 
about the GOB's ability to fight narcotics trafficking, 
having met its obligations in 2006. 

--------------------------------------------- 
A FIRST JOINT PRESS CONFERENCE WITH MORALES 
--------------------------------------------- 

¶10. (SBU) In an unprecedented move, Morales joined Tobias for 
a joint press conference following the meeting. Morales 
stated publicly that he was "very happy" with the meeting, 
and publicly thanked the USG for disaster assistance (noting 
that more would arrive next week) and general cooperation. 
Morales said the GOB's dialogue with the United States was 
important to Bolivia and that it would continue. Morales 
emphasized the GOB's "culture of dialogue" and its respect 
for differences with other countries. Additionally, in 
response to questions about the release of the INCSR report 
March 1, Morales said that he respected the report as an 
internal evaluation of our government, but that GOB 
statistics on counternarcotics progress were very different. 

--------- 
COMMENT 
--------- 

¶11. (C) In perhaps the Embassy's most positive meeting with 
Morales to date, the president repeatedly thanked Tobias 
privately and publicly for U.S. assistance. Morales seemed 
to appreciate the finer points of USAID operations in Bolivia 
and to have a superficial understanding of U.S. concerns on 
counternarcotics (as reflected by his discussion of a net 
reduction of coca). On trade, Morales clearly wants an 
ATPDEA extension, as further evidenced by Foreign Minister 
Choquehuanca's late February trip to Washington, but again 
made no mention of a concrete free trade proposal. While it 
seems that Morales may be warming to the benefits of a good 
bilateral relationship, his willingness to cooperate on the 
more difficult issues and to deliver solid political, 
economic, and counternarcotics policies may still be another 
matter. End comment. 

This cable has been cleared by Ambassadors Tobias and Shapiro. 
GOLDBERG