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C O N F I D E N T I A L SECTION 01 OF 04 LA PAZ 000096 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA A/S SHANNON 
STATE ALSO FOR WHA/AND 
NSC FOR DFISK 
USCINCSO FOR POLAD 
 
E.O. 12958: DECL: 01/17/2016 
TAGS: PGOV PREL ECON EPET ENRG SOCI ELAB SNAR BL
SUBJECT: BOLIVIA: SCENESETTER FOR A/S SHANNON 
 
REF: A. LA PAZ 06 
     ¶B. LA PAZ 70 
 
Classified By: Ambassador David N. Greenlee for reasons 1.4d and b. 
 
¶1.  (C) Summary: You will arrive in Bolivia at a time of 
potentially profound transformation, amid an atmosphere of 
pervasive uncertainty and hope.  We have engaged with 
President-elect Evo Morales (ref), but in a manner indicating 
something less than a business-as-usual embrace for his 
government.  Morales' signals have been mixed, initially 
hostile and recently -- did he learn something on his world 
tour? -- more moderate.  The President-elect's relationship 
with Venezuelan President Hugo Chavez and Cuban dictator 
Fidel Castro, and the deals he has reportedly struck with 
them, are of concern.  Unlike its recent predecessors, the 
Movement Toward Socialism (MAS) government will exercise 
power with a decisive mandate and little opposition from 
outside its own ranks.  At the same time, it will face the 
same structural challenges of poverty, underdevelopment and 
exclusion while finding itself besieged by "internal" 
demands, large and small, that could quickly prove paralyzing 
-- and it will have no excuses for failing to deliver.  Chief 
among these demands are to nationalize Bolivia's natural 
resources, establish a Constituent Assembly, gain the 
extradition of former President Gonzalo Sanchez de Lozada 
("Goni"), and -- no easy task -- reward the MAS's innumerable 
supporters with a limited supply of spoils.  In your meeting 
with Morales, you may wish to reiterate your public statement 
issued in Brazil about our willingness to seek common ground, 
while reminding him that our ability to cooperate will depend 
on his government's respect for our core interests in 
strengthening democracy, fomenting economic growth and 
pursuing a credible counter-narcotics strategy.  We 
understand Morales may raise debt forgiveness and the "Goni" 
trial.  End Summary. 
 
New Era 
------- 
¶2.  (C) You will arrive in Bolivia at a time of potentially 
profound transformation, during what some observers are 
calling the dawn of a new political order.  The era of 
"pacted democracy" is finished, and the traditional parties 
that dominated that era were virtually erased from the 
political map in the December 18 elections (the MNR, Goni's 
party, was an exception).  In electing the MAS, most 
Bolivians voted for change and against those who had failed 
to provide it in the past, but few understood precisely what 
such change might entail.  Now they are waiting to find out. 
As a result, the atmosphere here is one of pervasive 
uncertainty about what's to come.  The absence of a clear 
government plan, and the sometimes contradictory public 
statements of MAS leaders -- that they will nationalize the 
country's gas resources while respecting private investment, 
that they will fight narcotics trafficking while allowing 
coca to grow freely, that they will respect democratic 
principles while pursuing a Constituent Assembly whose 
democratic parameters remain undefined -- have accentuated 
that uncertainty.  At the same time, many Bolivians are 
hopeful that the future will be more stable, more secure and 
more satisfactory for more people than the immediate past. 
 
No Full Embrace 
--------------- 
¶3.  (C) After a prolonged period of our holding Evo Morales 
at arm's length, the Ambassador met with the President-elect 
earlier this month (ref).  The meeting was useful in that it 
broke the ice, established the necessary conditions for a 
constructive relationship, and identified the basis for 
possible future cooperation.  But many key bilateral issues 
remain to be addressed, and the initial rapprochement cannot 
 
LA PAZ 00000096  002 OF 004 
 
 
be confused with a full-fledged embrace of the future 
government.  Since that time, to avoid conveying an 
impression of excessive eagerness or signaling a 
business-as-usual relationship, we have refrained from 
reaching out to MAS heavyweights and insiders, including 
those whose names are being floated for possible ministerial 
positions.  In that sense, we would prefer for them to come 
to us. 
 
Morales' Mixed Signals 
---------------------- 
¶4.  (C) Much will depend on the concrete policy decisions and 
political alignments of the future government, and Morales' 
own signals have been decidedly mixed thus far.  After 
winning the election, Morales came out swinging -- screeching 
"death to Yankees" and calling the U.S. a "terrorist 
country."  This appeared to reflect a failure to make a quick 
transition from syndicalist leader to President-elect and/or 
an early strategy to seek new allies and friends and to 
sideline us.  Morales' rhetoric has since moderated.  Many 
analysts suggest that the President-elect's whirlwind world 
tour may have had a salutary effect, and that the messages he 
heard in Europe and South Africa in particular awoke in him 
an incipient awareness of how the wider world actually works, 
and the real -- vice mythical "imperial" -- role of the U.S. 
in it.  According to recent press reports, Morales has 
welcomed dialogue with the U.S. and "forgiven" Washington 
officials for (supposedly) maligning him in the past.  Some 
observers even suggest that Morales, whose principal frame of 
reference had previously been Bolivia's radical cocalero 
unions and anachronistic, inward-looking social sectors, has 
returned to Bolivia a "changed man."  But this, in our view, 
is optimistic. 
 
With Friends Like These 
----------------------- 
¶5.  (C) For one, Morales' longstanding public relationship 
with Venezuelan President Hugo Chavez and Cuban dictator 
Fidel Castro could be more than just for show.  He 
conceivably shares with those regional autocrats a deeper 
political vision, and might be planning to assume and 
maintain power for the long haul, by whatever means 
necessary.  That Morales traveled around the world on a 
Venezuelan plane accompanied by Venezuelan bodyguards does 
little to dispel this impression.  In addition, the deal he 
reportedly struck with Chavez in his most recent visit to 
Venezuela -- for USD 30 million in free-floating budget 
support and millions of dollars in diesel donations -- and 
with Castro in Cuba -- for thousands of Cuban "doctors" and 
"teachers" to be dispatched to Bolivia's rural areas -- are 
of serious concern.  In a worst-case scenario, they could 
spell the loosening of Bolivia from its democratic moorings, 
and the slow implantation of a populist autocracy here. 
 
MAS' Unchecked Power 
-------------------- 
¶6.  (C) In some ways, the MAS government will have virtually 
unchecked power to implement its plan, such as it exists. 
The government will control the executive -- unparalleled in 
Bolivia's recent past where power-sharing and backroom deals 
among different parties with varying agendas prevailed.  It 
will also have effective control over Congress -- with an 
outright majority in the Chamber of Deputies and a likely de 
facto working majority in the Senate (should, as many suspect 
they will, the UN, MNR and floating Podemos Senators be lured 
to the MAS' side by the inducements and prizes of power).  It 
will also benefit from a bumper crop of so-called 
"neo-MASistas" -- the many pragmatic Bolivians who are 
already accommodating themselves to the new political 
reality, and who have, retroactively, decided they were MAS 
supporters all along.  According to a mid-January poll, more 
 
LA PAZ 00000096  003 OF 004 
 
 
than 65% of Bolivians support the future government, compared 
to the less than 54% who actually voted for the MAS 
nationwide on December 18. 
 
¶7.  (C) Nor will there be much outside opposition to the MAS 
government, at least in the short term.  Many analysts see 
presidential candidate Jorge "Tuto" Quiroga's Podemos 
organization as primarily an electoral vehicle, with little 
internal cohesion and even less long-term staying power. 
(That "Tuto" spent the several weeks following his defeat 
vacationing with his family in Florida underscored an 
impression of non-commitment and disarray.)  The 
disadvantages of being in the opposition (the lack of carrots 
and sticks) and Quiroga's own less than deep pockets will 
complicate the lives of Podemos legislators, compelling some 
to choose self-interest over the principled life of 
opposition politics.  Moreover, most of the outside groups 
that figure as potential national government rivals, 
including the Santa Cruz private sector and the six non-MAS 
departmental governors, acknowledge that it would be an 
exercise in futility to confront the MAS's formidable power 
at this stage (ref B). 
 
Innumerable Demands and No Excuses for Failure 
--------------------------------------------- - 
¶8.  (C) But the MAS' overwhelming mandate is also a 
double-edged sword.  The government will face both the full 
gamut of Bolivia's problems -- massive poverty, unemployment, 
racial exclusion, poor physical infrastructure and often 
non-existent basic services etc. -- and the expectation of 
Bolivia's impoverished majority that things should quickly 
improve because it is "our turn now."  In confronting these 
challenges, it will have the same paltry tools as its 
predecessors in the public sector, i.e., the same borderline 
dysfunctional state apparatus.  And most important of all, it 
will have no outside excuse for failing to deliver.  This 
puts the future government in a paradoxically unenviable, 
even impossible, position -- because the deep-seated nature 
of the country's problems do not lend themselves to immediate 
solutions.  (For this reason, we should not be surprised if 
the government resorts to an outside bogeyman, including U.S. 
"imperialism" or supposed hostility, to explain its 
inevitable shortcomings.) 
 
¶9.  (C) The three top demands of the MAS' hard core social 
sector supporters -- the immediate nationalization of 
Bolivia's hydrocarbons and other natural resources, the quick 
establishment of a Constituent Assembly, and the extradition 
of former President Gonzalo "Goni" Sanchez de Lozada -- offer 
no grounds for optimism in this respect.  For starters, it is 
difficult to see how any or all of these demands, even if 
met, would resolve the real problems in question. 
Dispassionate observers believe that something more like the 
opposite might even be true, given the failure of state-led 
socialism to resolve the problems of wealth and poverty 
elsewhere in the world, and given the proven inability to 
"legislate" solutions to structural social and economic 
problems whenever and wherever that method has been tried. 
 
¶10.  (C) Nor is it clear that the demands will be met.  The 
message Morales has heard in Spain, France, Belgium, Brazil 
and (soon) Argentina regarding transnational investments in 
Bolivia's hydrocarbons sector might well cause the government 
to backtrack on (and re-spin) its commitment to 
nationalization.  The government's ability to secure the 
extradition of Goni will depend on us, and sending the former 
president to a foreordained conviction in a political show 
trial goes manifestly against our interests in seeing justice 
served.  For its part, the Constituent Assembly may not seem 
so appealing as it did before the election, when few foresaw 
the MAS' dominance in Congress; therefore the government's 
 
LA PAZ 00000096  004 OF 004 
 
 
push for it could ease.  That said, the government's failure 
to fulfill these demands would cause rumblings among its 
hard-core social sector bases, and generate the makings of a 
potentially powerful opposition from the street. 
 
Proliferation of Micro-Demands 
------------------------------ 
¶11.  (C) Tensions and divisions will likely be exacerbated by 
the micro-demands of innumerable MAS' partisans, who are 
expecting concrete gains in exchange for their electoral 
support.  These start with the expectation for Cabinet and 
other positions in the future administration.  Campesino 
leader and former MAS Senator Roman Loayza has been quoted in 
press reports as demanding at least four ministries for his 
social sector organization, the CSTUCB.  According to 
indigenous contacts, many other groups who (believe they) 
played a role in the MAS' ascension to power are applying 
similar pressures.  One former indigenous congressman told us 
that tensions "internal" to the MAS would eventually paralyze 
the future government, and even bring it down.  Other 
observers emphasize that the MAS is less a party than a 
conglomeration of syndicalist and social sector entities, and 
therefore has a plethora of different people with distinct 
agendas to pay off.  Moreover, they continue, being in the 
government may bring access to great spoils, but this being 
Bolivia, the supply of spoils is less extensive than it would 
be in, say, Venezuela.  This means that the government will 
be seriously constrained in its actions from the start. 
 
Your Meeting with Morales 
------------------------- 
¶12.  (C) In your prospective meeting with Morales, 
tentatively scheduled for the afternoon of January 21, you 
may wish to reiterate our willingness to seek common ground. 
(Your comments from Brazil earlier this month regarding the 
U.S.' openness to dialogue with the future Bolivian 
government played well in the media here.  They also undercut 
the credibility of Venezuelan President Hugo Chavez's 
accusations that the Embassy was plotting to overthrow 
Morales.)  At the same time, you can remind the 
President-elect that our ability to cooperate depends on his 
government's actions on issues relating to our core interests 
in strengthening the institutions and practices of democracy, 
fomenting economic growth for the benefit of all and pursuing 
a credible counter-narcotics strategy.  You will want to 
elicit more clarity on Morales' view of the role of 
eradication in that strategy.  According to VP-elect Alvaro 
Garcia Linera, Morales may also raise debt forgiveness for 
Bolivia, the "Goni" trial and other trade and aid-related 
questions with you. 
GREENLEE