VZCZCXRO3160
PP RUEHLMC
DE RUEHLP #0195/01 0261523
ZNY CCCCC ZZH
P 261523Z JAN 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 7873
INFO RUEHAC/AMEMBASSY ASUNCION 5553
RUEHBO/AMEMBASSY BOGOTA 2816
RUEHBR/AMEMBASSY BRASILIA 6687
RUEHBU/AMEMBASSY BUENOS AIRES 3901
RUEHCV/AMEMBASSY CARACAS 1262
RUEHPE/AMEMBASSY LIMA 1156
RUEHMN/AMEMBASSY MONTEVIDEO 3523
RUEHQT/AMEMBASSY QUITO 3903
RUEHSG/AMEMBASSY SANTIAGO 8415
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUMIAAA/USCINCSO MIAMI FL
RUEHC/DEPT OF LABOR WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 05 LA PAZ 000195 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA A/S SHANNON AND PDAS SHAPIRO 
STATE ALSO FOR WHA/AND 
NSC FOR DFISK 
USCINCSO FOR POLAD 
 
E.O. 12958: DECL: 01/26/2016 
TAGS: PGOV PREL ECON EPET EINV ENRG SOCI ELAB BL
SUBJECT: MORALES-SHANNON MEETING: PRESIDENT RECOUNTS 
PERSONAL, POLITICAL HISTORY 
 
REF: LA PAZ 006 
 
Classified By: Ambassador David N. Greenlee for reasons 1.4d and b. 
 
¶1.  (C) Summary: Summary: In their January 21 meeting, WHA 
Assistant Secretary Thomas Shannon told President-elect Evo 
Morales the U.S. agenda in Bolivia reflected our larger 
agenda in the region:  consolidating democracy, promoting 
economic growth through free markets and integration, and 
protecting the democratic state by attacking organized crime, 
terrorism, and drug trafficking.  Shannon told Morales that 
the U.S. was prepared to work with his government in support 
of this agenda.  Morales referred to his personal experience 
and to the birth of his political movement, and spoke of 
wanting to help Bolivia's marginalized indigenous majority 
and to vanquish a political class that had repeatedly failed 
to meet its promises to the people.  He emphasized that the 
MAS had emerged from the ground up, not from a group of 
ideologues or intellectuals.  He also reaffirmed the future 
government's commitment to democracy, private property and 
investment -- "to benefit all Bolivians" -- and reiterated 
that the "cato" agreement had created peace in the Chapare 
coca-growing region.  Stressing that he had turned the corner 
from opposition leader to head of government, Morales 
underscored the importance of relations with the U.S. and his 
openness to continued dialogue with us. 
 
¶2.  (C) Comparing Bolivia with South Africa, VP-elect Alvaro 
Garcia Linera said the Morales government wanted to improve 
the lives of Bolivia's poor and mostly indigenous majority, 
and that the state would assume a strengthened role in taking 
on this challenge.  In a clear reference to Venezuela, Garcia 
emphasized Bolivia had no intention of "importing other 
countries' problems," only of resolving its own.  He hoped 
the U.S. would cooperate in securing "justice" for former 
President Gonzalo "Goni" Sanchez de Lozada.  Greenlee said we 
appreciated Morales' openness, and suggested that bilateral 
teams meet to discuss concrete issues and programs as soon as 
the new government was prepared to do so. 
 
¶3.  (C) Morales was relaxed during the meeting.  He seemed 
intent on keeping space open for a policy dialogue that would 
define the relationship.  We should not underestimate the 
difficulty of this challenge, or have any illusions about 
Morales.  However, we should engage with this government and 
call its bluff at each turn.  We can use such engagement to 
bring other allies into the effort, and to try to drive a 
wedge between Chavez and Morales.  End Summary. 
 
Morales' Sartorial Message 
-------------------------- 
¶4.  (SBU) WHA Assistant Secretary Thomas Shannon met late 
January 21 with President-elect Evo Morales, on the eve of 
the formal "transmission of power" ceremonies (held on 
January 22), at Morales' residence in the Miraflores 
neighborhood of La Paz.  The relatively humble setting, 
coupled with Morales' sartorial choices -- trademark striped 
sweater and slacks (in addition to rose-colored plastic 
sandals) -- underscored the subliminal message of the 
meeting: that the future President is a simple man committed 
to bettering the lives of the people.   While clearly 
fatigued by the frenetic activity of recent weeks, Morales 
was also charged with enthusiasm by the turn-out and success 
of the ceremony at the Aymara ruins of Tiwanaku, where he 
received the "symbolic" mandate of Bolivia's and the 
continent's indigenous peoples, earlier in the day.  VP-elect 
Alvaro Garcia Linera accompanied Morales.  Accompanying A/S 
Shannon were Ambassador Greenlee, DCM Robinson, Ecopol 
Counselor Chapman and poloff Ludwig (note-taker). 
 
 
LA PAZ 00000195  002 OF 005 
 
 
Morales' Personal/Political History 
----------------------------------- 
¶5.  (C) A/S Shannon began by congratulating Morales for his 
decisive victory in the recent democratic elections, and 
wished him and the Bolivian people great success in the 
future.  The U.S. acknowledged the result as indisputable, 
Shannon said, and would seek ways to work with the new 
government in pursuit of our shared interests.  After 
thanking Shannon, Morales embarked on a 20-minute personal 
history in which he stressed the seriousness of his work and 
sincerity of his intentions on behalf of Bolivia's poor, most 
of them indigenous.  He noted that, according to the 2001 
census, 62% of Bolivians were indigenous, Quechuas, Aymaras, 
Guaranis or one of the country's many lowlands groups, and 
that these people had been abandoned and forgotten by the 
prevailing political system.  Referring to his own childhood 
in rural Oruro, Morales said there were no basic services 
where he lived, no potable water, no electricity and no roads 
to reach the makeshift schools that only went up to the third 
grade in most cases.  If we have blockaded, he exclaimed, it 
has only been to force those in power to listen to our 
legitimate social and economic demands. 
 
¶6.  (C) Morales then related the litany of failures of the 
established system and its principal actors in government to 
respond to the needs of the country's neglected poor.   This 
included negotiations with successive governments that, 
Morales explained, never lived up to their side of the 
bargain.  He described the onset of privatization in the 80s, 
with the now infamous Executive Decree 21060, which (he said) 
caused the collapse of the mining industry and unleashed a 
flow of migrants to other parts of the country, including the 
Chapare where many former miners began growing coca.  "The 
Chapare is the synthesis of Bolivian poverty," he said, where 
the economic failures of the system have been most 
concentrated. 
 
¶7.  (C) Morales described how a 1994 agreement between 
Chapare cocaleros and then-President Gonzalo Sanchez de 
Lozada ended with the government, again, failing to comply. 
At that point, he explained, "we asked ourselves if the 
government would ever comply, and we decided that this would 
happen only when we ourselves became the government."  That 
is how my political movement was born, which focused on land, 
territory and economic issues, as well as coca.  In this 
connection, Morales explained that the Movement Toward 
Socialism (MAS) was formed not by a group of ideologues or 
intellectuals committed to an abstract political vision, but 
by social sector and union groups in pursuit of concrete, 
practical demands. 
 
Key Issues 
---------- 
¶8.  (C) Turning to the issues discussed in his previous 
meeting with the Ambassador (ref), Morales said he was 
prepared to work constructively on areas of shared concern. 
He recounted that in the early 90s a journalist from 
Cochabamba had congratulated him for having passed an alleged 
investigation by the U.S. DEA, which he claimed had 
discovered nothing untoward -- "no narco-trafficking or 
womanizing or anything more serious than the occasional 
beer."  He noted that the "cato" per family coca set-aside 
free from eradication had been a consistent demand of 
cocaleros since 1994.  Since the "cato" agreement was reached 
with former President Mesa in 2004, he explained, there had 
been no blockades, no deaths, no injuries and no problems in 
the Chapare.  He further mentioned the ongoing EU-funded 
study on legal use of coca, and acknowledged separate 
negotiations would be necessary to resolve the complicated 
situation in the Yungas. 
 
LA PAZ 00000195  003 OF 005 
 
 
 
¶9.  (C) Morales emphasized that public and private investment 
was necessary for the economy to grow.  "I myself have 
private property, including land and llamas."  He said he had 
told European leaders during his tour that Bolivia would not 
confiscate property or expropriate their investment, but only 
work to ensure that all Bolivians benefited from it.  He 
noted that his message must have gotten out because Repsol 
and Total had announced their intention to withdraw the 
arbitration trigger letters they had sent to the Bolivian 
government last year.  (Note: While newspapers reported this 
last week, we have been unable to confirm that it is in fact 
the case.  End Note.)  His chief aim, Morales explained, was 
to improve the economic condition of Bolivians by creating 
jobs.  Noting that more than 80% of Bolivians worked in micro 
and small businesses, he said his government would form a 
Ministry for Small Businesses to foment further growth in the 
sector.  He also pledged that the government would implement 
his announced salary cuts -- 50% for Ministers and other 
high-level officials, as well as for legislators -- and 
claimed this would help pay for needed investments in 
education, "which the people are expecting." 
 
¶10.  (C) On U.S.-Bolivia relations, Morales explained that 
after all the accusations he had turned the page.  He fully 
agreed with VP-elect Alvaro Garcia Linera on the importance 
of this meeting (with U.S. representative Shannon) above any 
other, and had in fact cancelled other scheduled meetings to 
make room for this one.  It is critical for us to have 
relations with the world's most important power, he 
explained, but in the context of mutual respect. "Before I 
used to call for 'death to the oligarchy.'  But I know I have 
lots to learn."  Joking that it turned out to have been 
easier to become President than to realize his dream of being 
a journalist, he said: "I see just how much responsibility I 
have now.  It's not like being a university student, when you 
can be a radical.  Now I have graduated."  Morales then 
emphasized his commitment to democracy, a fact highlighted in 
the 84% voter turnout in the December 18 elections and the 
majority support he received, and explained that the planned 
Constituent Assembly would seek to change the country by 
votes and not by violence.  "We'd like your help in 
accomplishing this," he said. 
 
VP Garcia on Economic Plans, Venezuela, Goni 
-------------------------------------------- 
¶11.  (C) In response to Morales' invitation, VP-elect Alvaro 
Garcia Linera explained that the government had the simple 
goal of overcoming the poverty of the majority.  "66% of 
Bolivians live with less that $600 per year; 45% on less than 
$1 a day.  We want to change that."  He continued that many 
Bolivians, most of them indigenous, were living in economic 
conditions identical to those of the 16th century.  "We want 
to bring them into the 21st century."   He explained that the 
neo-liberal model was wrong in seeking to reduce and destroy 
the state, because government was a necessary force in 
promoting economic development.  The result of the state's 
decline had been increased regional, sectoral and ethnic 
tensions that had come close, in the past five years, to 
exploding into outright violence. 
 
¶12.  (C) Garcia explained that the Morales government would 
strengthen the role of the state in Bolivia's development but 
"not in an irresponsible way with leaps into the void." 
Rather, given the failures of the market-focused system to 
help the poor, the state would promote production, capital 
development and more favorable conditions for small and 
medium-sized businesses.  It would focus political-economic 
policies on the neglected majority, to begin including them 
in the system.  It would start with the internal market, and 
 
LA PAZ 00000195  004 OF 005 
 
 
also engage selectively with markets outside of Bolivia.  "We 
are not trying to deny the reality of globalization," he 
explained. 
 
¶13.  (C) Garcia said Morales' political project of expanding 
democracy had found a propitious moment, and had to be led by 
a Bolivian of indigenous ethnicity.  What has happened here, 
he explained, is similar to the downfall of Apartheid in 
South Africa.  "A racist system has been defeated, and the 
only surprise was that it didn't happen earlier."   This is a 
great democratic achievement, fully compatible with the 
democratic values of the U.S; there is more equality, more 
opportunity and more dignity now in Bolivia than there was 
before.   The tensions will be resolvable, he said. "We are 
fully open to dialogue, we will acknowledge our mistakes; and 
hopefully you will too." 
 
¶14.  (C) In a clear, if veiled, reference to Venezuela and 
Cuba, Garcia stated that the Morales government would not 
bring the conflicts of "other countries" into Bolivia.  "We 
have enough problems of our own to solve," he explained, "and 
do not need any more."  He said the government was interested 
in ensuring the health of its alliances with the U.S. and 
European partners, and hoped to continue receiving the aid on 
which Bolivia depends for its education, health and 
infrastructure needs - "but with the aim of shedding the 
dependency and standing on our own two feet." 
 
¶15.  (C) In closing, Garcia raised the issue of the trial of 
former President Gonzalo "Goni" Sanchez de Lozada.  He noted 
that justice for Goni was an important social sector demand 
and a central message in the MAS's own campaign.  He 
promised, somewhat incredibly, that the Morales government 
would allow justice to take its own course, without pressure 
or interference, but said the ball was in the court of the 
U.S. at this moment.  (Comment: Judging from his remarks, 
Garcia appeared to believe, wrongly, that an extradition 
request for Goni had already been made to the U.S.  End 
Comment.)  Garcia praised the integrity of the U.S. justice 
system, and hoped we would cooperate in ensuring that justice 
took its course in the Goni case. 
 
Shannon Underscores U.S. Priorities 
----------------------------------- 
¶16.  (C) A/S Shannon thanked Morales and Garcia for their 
expressions of openness, and reiterated that a similar 
disposition existed on the U.S. side.  Using inter-agency 
agreed upon red lines, Shannon then walked Morales through 
our primary interests in Bolivia and the region: 
consolidating democracy, promoting economic development, and 
protecting the democratic state. 
 
¶17.  (C) Regarding democracy, Shannon referred to his 
personal experience in South Africa as labor attach, saying 
the transition to post-Apartheid democracy there had 
succeeded, averting the prospect of civil war, in large 
measure thanks to the leaders' respect for democratic 
institutions and fundamental human rights.  Institutions were 
vital, he explained, in preserving democracy and freedom, and 
the U.S. was interested in working with the Morales 
government to consolidate Bolivia's democratic institutions. 
Combating poverty was also a high priority for the U.S., he 
explained.  The U.S. did this by opening our markets to 
Bolivian and other countries in the region, and by seeking 
ways to promote economic opportunity.  He explained that the 
state could play a key role in this respect, if it avoided 
creating dependencies rather than opportunities.  He noted 
that respect for private property, rule of law, and 
successful dispute resolution were vital components of 
economic growth. 
 
LA PAZ 00000195  005 OF 005 
 
 
 
¶18.  (C) Another key U.S. goal in Bolivia, Shannon continued, 
was defending the security of the democratic state from 
international crime, terrorism and narcotics trafficking. 
He acknowledged that aspects of the U.S.' counter-narcotics 
strategy were controversial in Bolivia, but noted they had 
been vital in protecting Bolivia from predatory drug cartels. 
 He believed cooperation on a mutually satisfactory basis was 
possible.  In this respect, he noted that U.S.-supported 
eradication efforts did not target legal coca, which was part 
of Bolivia's traditional culture, only that excess coca which 
was destined for manufacture as cocaine.  Shannon emphasized 
that the U.S. was willing to work together with the future 
government in pursuit of our shared interests to counter 
cocaine production and trafficking, and hoped we could reach 
agreement on this front soon. 
 
¶19.  (C) The Ambassador praised Morales for creating a 
positive atmosphere that facilitated the possibility of 
future cooperation.  He noted their important first meeting 
two weeks ago, and Morales' progress since that time in 
assuming a practical stance, moderating the rhetoric and 
demonstrating openness to dialogue.  Acknowledging that 
entrenched poverty in "deep Bolivia" had gone unaddressed in 
the four decades he has known the country, the Ambassador 
emphasized that "we want you to succeed" in changing this. 
He further explained that, while we surely had ideological 
differences with the future government and were likely to 
disagree on specific issues, we were willing to seek ways to 
work together.  The Ambassador suggested that bilateral teams 
meet to discuss the range of concrete issues and programs 
before us as soon as the government is prepared to do so. 
Morales agreed. 
 
Comment: 
-------- 
¶20.  (C) Morales used the meeting to convey that he is open 
to dialogue with the U.S. on key issues including 
counternarcotics.  We should engage him and his government, 
recognizing that this will be a difficult challenge given his 
past and the ideology of many of his supporters.  Still, 
engagement will help us to enlist other allies in the effort 
and will also allow us to try to drive a wedge between Chavez 
and Morales. 
 
¶21.  (U) A/S Shannon cleared this message. 
GREENLEE