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C O N F I D E N T I A L SECTION 01 OF 03 LA PAZ 000179 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/14/2016 
TAGS: ECON PGOV PREL BL
SUBJECT: MORALES GOVERNMENT GENERATES HOPE, CONCERN 
 
 
Classified By: Amb. David N. Greenlee for reasons 1.4 (b) and (d). 
 
¶1. (C) Summary: WHA Assistant Secretary Thomas Shannon held a 
series of meetings on January 22 with Santa Cruz business 
leaders, media and political analysts, opposition leader 
Jorge "Tuto" Quiroga, and Spanish Secretary of Foreign 
Affairs Bernardino Leon on the margins of the Morales 
inauguration.  Reaction to the new Morales government varied 
widely: analysts were relieved by his clear victory but 
concerned about the lack of checks and balances on government 
power; Spanish Secretary of Foreign Affairs Bernardino Leon 
was cautious about engaging Morales, but hoped to continue 
with police cooperation; Santa Cruz business leaders were 
pessimistic about the government's plans but hesitant about 
confronting it head-on; and would-be opposition leader Jorge 
"Tuto" Quiroga expressed hostility toward the new government 
and seemed eager to facilitate its failure by abdicating any 
role of loyal opposition, even if to the detriment of the 
Bolivian people.  End summary. 
 
ANALYSTS RELIEVED BUT CONCERNED ABOUT FUTURE 
--------------------------------------------- - 
¶2. (SBU) Meeting with political and media analysts, A/S 
Shannon said that Morales' election responded to an 
indisputable democratic process and that the USG recognized 
and respected his mandate.  Shannon said the United States 
was open to dialogue with the new government, and that the 
results of that dialogue, and the government's own decisions 
and actions, would determine the kind of relationship we 
could have.  The analysts emphasized the MAS's almost 
unlimited political power, the need for consensus and 
participation during Bolivia's political transition, and the 
importance of the U.S. role in those changes. 
 
¶3.  (SBU) Several analysts commented on a lack of any 
countervailing political force to the MAS's power base.  They 
noted the MAS fully controlled the executive, and had the 
majority of congress, including the presidency of both the 
Senate and Chamber of Deputies.  Additionally, the 
opposition, led by defeated Podemos candidate Jorge "Tuto" 
Quiroga, was weak and fragmented.  Favorable public opinion 
(74 percent) gave the Morales administration an even stronger 
mandate.  Based on these factors, analysts stated that the 
MAS would be solely responsible for the government's success 
or failure.  They evinced relief that Morales had won by such 
a large margin, but also concern that the euphoria of power 
would lead the government to continue past corrupt practices, 
feeding on the belief that it's now "our turn."  They also 
speculated that Morales would be tempted by his unchecked 
power to go too far (e.g. toward an authoritarian system). 
Others expressed concern that Morales had promised too much 
on the campaign trail, and would face strong pressure from 
his party and from social sectors to deliver on a mountain of 
nearly impossible expectations in the months ahead. 
 
¶4. (SBU) Other analysts expressed hope that Morales would 
seek consensus and expand political participation in the 
coming upheaval of Bolivia's political system.  One 
indigenous leader lamented that the 2004 popular 
participation law did not improve indigenous involvement in 
politics, and that the majority remained sidelined 
politically.  She advocated more direct democratic 
representation, particularly for the Constituent Assembly 
(now planned for August).  Another analyst opined that 
Morales was not the answer to Bolivia's crisis, which was 
rooted in the structure of the state rather than the 
relatively superficial problem of one particular government 
or another.  He speculated that Morales would be the last 
president in this transitional period, as opposed to the 
first president of a new era. 
 
¶5. (SBU) Many analysts believed the United States would play 
a critical role during the Morales administration.  They 
stressed that the MAS would need the United States to govern, 
and noted Morales' concern that several ministries were 
heavily influenced by U.S. or foreign governments.  An 
economic analyst urged the USG to move quickly to provide 
 
LA PAZ 00000179  002 OF 003 
 
 
economic support to Bolivia, because under a "wait and see" 
approach, in the absence of an FTA or an extension of ATPDEA 
benefits, Bolivia would be forced to look for other markets. 
They pointed out that because Bolivia was so dependent on 
regional markets, the Free Trade Agreement of the Americas 
(FTAA) was more important than a bilateral agreement or the 
Andean FTA.  One analyst catergorically stated that the GOB 
"can't live with indifference from Washington," and that its 
success would depend on its ability to cooperate with the USG. 
 
SPANISH HOPE TO CONTINUE POLICE COOPERATION 
-------------------------------------------- 
¶6. (C) Spanish Secretary of Foreign Affairs Bernardino Leon 
told A/S Shannon he was concerned about the erratic nature of 
Morales' inaugural speech (ref).  He noted that Morales' 
frequent mention of the evils of the colonial period had 
implictly targeted Spain.  Nonetheless, the Spanish 
government hoped to continue its assistance to the Bolivian 
police, but would watch the new government carefully for the 
next 5-6 months before making any commitments.  Such 
cooperation with the police was important to Spain, said 
Leon, because of "recent approaches by ETA representatives to 
people close to Morales."  On counternarcotics, Leon believed 
Morales was worried about recertification.  Shannon suggested 
that the Spanish emphasize to Morales the importance of a 
three-pronged approach to narcotrafficking -- eradication, 
interdiction and alternative development -- and welcomed 
increased European involvement in this area. Leon said he was 
somewhat reassured by Morales' promise to fight illegal 
cocaine trafficking. 
 
¶7. (SBU) Leon mentioned his recent meeting with the 
Brazilians and Argentines regarding natural gas.  He said 
both governments remained keenly interested in accessing more 
Bolivian gas, but multinational firms such as Petrobras and 
Repsol were reluctant to make additional investments in 
Bolivia absent international guaranties.  Leon continued that 
some kind of Mercosur guarantee could be given to provide 
necessary assurances to investors while also holding the GOB 
accountable to the Mercosur governments for compliance with 
the new contracts.  In a side comment about Argentina, Leon 
said he was "not sure about Kirchner either because he too 
has been erratic of late." 
 
SANTA CRUZ BUSINESS LEADERS PESSIMISTIC 
--------------------------------------- 
¶8. (C) Gabriel Dabdoub, President of the Santa Cruz Chamber 
of Industry, Commerce, Services, and Tourism, told A/S 
Shannon he worried that President Morales would move Bolivia 
in the direction of Chavez and Castro, gradually 
consolidating power and shifting the country leftward, away 
from market-oriented policies toward greater state control of 
the economy.  Branko Marinkovic, President of the Santa Cruz 
Federation of Private Businessmen, echoed Dabdoub's concerns, 
saying he expected the next year to be difficult, 
particularly if the incoming administration or the proposed 
Constituent Assembly introduced radical changes to laws 
governing the private sector.  For now, they said, they would 
adopt a "wait and see" attitude, conducting business as usual 
but preparing to offer constructive criticism of unfavorable 
government policies.  Marinkovic remarked that several issues 
-- the nationalization of the hydrocarbons sector, the 
redistribution of large land holdings, and the indefinite 
postponement of international bidding for the right to 
develop Mutun, one of the world's largest iron ore deposits 
-- could revive calls for greater regional autonomy, which 
could strain relations with the new administration and make 
it harder for Morales to govern. 
 
TUTO QUIROGA HOSTILE TOWARD MORALES GOVERNMENT 
--------------------------------------------- --- 
¶9. (C) Jorge "Tuto" Quiroga explained his presidential defeat 
as part of the populist wave sweeping South America.  He told 
A/S Shannon that the MAS had pumped up expectations among the 
general population but had low capacity to deliver results -- 
a recipe for future disaster.  Quiroga likened the social 
sector movements to bull fights, and that Morales had ridden 
 
LA PAZ 00000179  003 OF 003 
 
 
on bulls to power.  Now, he continued, President Morales was 
the bullfighter who would have to control the bulls.  Quiroga 
believed that he would have to use the United States, the 
IMF, or Quiroga himself as the "red cape" to continue to 
irritate and control them.  But Quiroga would not allow 
himself to be used in this way.  Instead, he planned to 
facilitate MAS initiatives in Congress, and even to allow the 
more ill-advised of those to be passed unchanged by the 
legislature in order to ensure that the blame for Bolivia's 
impending disorder be placed squarely on Morales' shoulders. 
The former president conceded that this was not responsible 
economically, but contended that it would be politically 
effective. 
 
¶10.  (C) Outside Congress, Quiroga would challenge Morales on 
the GOB's establishment of low (concessionary) gas prices for 
Brazil and Argentina, and demand explanations for the MAS' 
complicity in Bolivia's subsidizing its wealthier neighbors. 
Quiroga lamented that the MAS would dismantle many of the 
democratic institutions which had taken years to build, and 
said that MAS attacks on the superintendencies (government 
regulators for telecommunications, hydrocarbons, banks and 
other sectors) and the Central Bank would damage Bolivia's 
economy.  Concerning the relationship between Morales and 
Garcia Linera, Quiroga said the strain was already evident. 
He believed, "as one who has a PhD in presidential and 
vice-presidential intrigue," that Garcia Linera, as a result 
of presidential envy and the pressure of Morales' social 
sector supporters, would be pushed out of the center of 
political power within six months. 
 
¶11. (U) This message was not/not cleared by A/S Shannon. 
GREENLEE