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Viewing cable 06SANSALVADOR963, U.S. Ambassadors Outline Agenda for Central

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Reference ID Created Released Classification Origin
06SANSALVADOR963 2006-04-11 20:16 2011-08-26 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy San Salvador
This record is a partial extract of the original cable. The full text of the original cable is not available.

112016Z Apr 06
UNCLAS SECTION 01 OF 04 SAN SALVADOR 000963 
 
SIPDIS 
 
SENSITIVE 
 
E.O.  12958: N/A 
TAGS: PREL ECON
SUBJECT:  U.S. Ambassadors Outline Agenda for Central 
America 
 
 
Summary and Introduction 
------------------------ 
1.  (SBU) WHA Assistant Secretary Tom Shannon, Ambassador to 
El Salvador Douglas Barclay, Ambassador to Guatemala James 
Derham, Ambassador to Belize Robert Dieter, Ambassador to 
Panama William Eaton, Ambassador to Honduras Charles Ford, 
Ambassador to Costa Rica Mark Langdale, and Ambassador to 
Nicaragua Paul Trivelli met on March 18, 2006, in San 
Salvador to outline regional concerns related to populist 
politics, regional security, nongovernmental diplomacy, 
immigration, CAFTA-DR implementation, corruption, and 
regional integration.  The following paragraphs summarize 
discussions on these themes and provide recommendations for 
follow up.  For better coordination on these issues, Embassy 
San Salvador suggests that each embassy in the region be 
responsible for follow-up on a particular issue.  End 
summary and introduction. 
 
Populist Politics 
------------------- 
2.  (SBU) Ambassador Trivelli made it clear that Ortega is 
the same populist Mafioso who drove Nicaragua into the 
ground under previous Sandanista rule.  An Ortega victory in 
upcoming presidential elections would give Chavez a foothold 
in the region and trigger another round of human and capital 
flight.  A/S Shannon said it is important that neither 
Ortega nor Aleman win, given Ortega's influence over Aleman. 
Leaders in the region must focus on how important these 
elections are, he added. 
 
3.  (SBU) Ambassador Eaton said the political left in Panama 
is weak, and all parties are centrist or right wing.  There 
is little anti-Americanism, and President Torrijos is trying 
to improve bilateral relations.  He warned that because 
Panama has the second-worst income disparity in the 
hemisphere, there is some concern that a leftist demagogue 
could rally support. 
 
4.  (SBU) In his campaign, President Zelaya of Honduras 
promised to reduce the price of gasoline by implementing the 
recommendations of a national commission to nationalize the 
fuel distribution network, Ambassador Ford said.  Now, he is 
scrambling to fulfill that pledge and address other 
governance issues in a desire to show that democracy and a 
market economy can meet the needs of the poorest Hondurans. 
 
5.  (SBU) Presidential elections are 18 months away in 
Guatemala, where Alvaro Colon is the leading candidate; 
Ambassador Derham said there are concerns over allegations 
of corruption in the current government that may spell 
trouble for incumbents and that narcofunds are backing 
certain candidates.  Ambassador Derham added that the 
election of Morales in Bolivia was a welcome event among the 
indigenous population in Guatemala, but they are still 
reeling from the war years and are not yet organized enough 
to put together a political campaign.  He noted that there 
are reports, however, that Guatemalans are traveling to 
Venezuela under what is being called a "Chavez IVP"--further 
Venezuelan influence in Guatemala could lead to pressure on 
government to agree to deals such as the Petrocaribe fuel 
offers that Venezuela has promoted recently. 
 
6.  (SBU) Recommendations:  A) Continue to monitor populist 
political activities in the region and share experiences on 
best practices to support democracies in the region.  Follow- 
up:  Embassy Nicaragua. 
 
Regional Security 
----------------- 
7.  (SBU) Ambassador Derham said that Guatemala's most 
pressing issue is security, especially gangs and other 
organized crime.  He shared three anecdotes on security in 
Guatemala that illustrated the challenge facing the country 
from smugglers of persons, drugs, and contraband--these 
groups control parts of the country, and law enforcement is 
difficult in those regions.  Corruption among the police and 
judiciary further complicate the issue.  In the recent "Blue 
Sky" development exercise submitted with the MPP, he 
proposed putting all assistance for Guatemala into security. 
Ambassador Ford compared the security situation in Honduras 
to that in Guatemala and noted a recent increase in airborne 
drug trafficking through Honduras and an increase in truck 
hijackings. 
 
8.  (SBU) Ambassador Derham emphasized that to combat drug 
trafficking in a country that lacks a functional system of 
law enforcement, creativity is important.  Working with U.S. 
law enforcement, the Embassy lured three prominent 
Guatemalan officials accused of drug trafficking to the 
United States, where U.S. authorities arrested them. 
Dealing with the issue also requires hands-on assistance, 
Ambassador Derham said, as has been necessary in 
establishing a multi-agency task force to combat money 
laundering in Guatemala.  He described a project in Villa 
Nueva designed to curb growing criminality fed by a family 
structure of broken families.  Finally, he noted the 
importance of pushing forward on the legislative agenda, 
citing the development of a RICO-style statute in Guatemala. 
 
9.  (SBU) Ambassador Ford said President Zelaya was focusing 
more on prevention in dealing with security issues. 
Meanwhile, the Embassy continues to focus on a rule of law 
program that has invested $30 million in administration of 
justice and related programs since 1987.  An important part 
of that effort has been reaching out to the economic elite 
to convince them that better physical and judicial security 
would serve them in the long term--although some do gain 
short-term benefits by manipulating weaknesses in the 
justice system.  Ambassador Barclay noted that the police in 
El Salvador were generally good, but the court system was in 
shambles.  Expanding on Ford's point about reaching out to 
the economic elite, Ambassador Barclay said that getting 
improvements in security is a cultural issue, and that 
convincing people it is in their interest to reform the 
judiciary is the key. 
 
10.  (SBU) Ambassador Trivelli noted that on a regional 
level, INL resources would be limited for 2006.  Given the 
U.S. focus on drug producing countries, Central America 
would not see many resources for addressing the problem of 
drugs transiting the region.  Ambassador Dieter suggested 
that a regional approach might be effective in countering 
that decrease in funding to tackle security issues. 
 
11.  (SBU) Recommendations:  A) Consider developing a 
regional approach to INL activities and funding to better 
deal with cross-border security issues.  Follow-up:  Embassy 
Guatemala City. 
 
Nongovernmental Diplomacy 
------------------------- 
12.  (SBU) A/S Shannon said he is concerned about the public 
perception of policies promoted by the United States.  We 
have difficulty in packaging what we do, whether it is free 
trade or the Millennium Challenge Account, and it is not 
plainly evident to the general public what the benefits of 
these initiatives will be.  There is concern that Latin 
Americans feel the United States has forgotten about the 
region, but in terms of foreign assistance this is false. 
The Bush administration is much more engaged in the region 
than previous administrations--spending has doubled from 
$800 million to $1.6 billion, the number of Peace Corps 
volunteers is up 40 percent in the region, and there are 
initiatives such as the Millennium Challenge Account with 
compacts in Nicaragua and Honduras, and possibly El 
Salvador, which will benefit the region.  The Department 
must move beyond merely advancing our policy goals with host- 
country governments and make greater efforts toward direct 
outreach to the general public. 
 
13.  (SBU) Ambassador Dieter agreed with A/S Shannon and 
said that although interactions with the Government of 
Belize were cordial, the best way to communicate about the 
United States is to go directly to the people, whether it be 
the private sector, church groups, schools, or other civic 
organizations.  He noted also Secretary Rice's recent 
comment that the Department emphasizes engagement, not 
simply reporting, and he proposed that Posts be proactive in 
assisting volunteer and humanitarian groups and suggesting 
projects they might consider.  Ambassador Eaton suggested 
making available a clearinghouse of nongovernmental 
organizations. Ambassador Langdale suggested that a local 
version of the Department's Corporate Excellence Award had 
proven useful in stimulating the private sector's interest 
in civic responsibility.  Ambassador Langdale said he makes 
it a point to ask U.S. executives with whom he meets about 
their corporate giving programs in Costa Rica.  Several 
ambassadors inquired regarding the status of Hurricane Stan 
disaster assistance spearheaded by the private sector. 
 
14.  (SBU) Recommendations:  A) Ensure wider distribution of 
existing resources on NGOs operating in the region.  B) 
Establish country-level Corporate Excellence Awards 
throughout the region.  C) Seek additional information on 
Hurricane Stan disaster assistance.  Follow-up:  Embassy 
Belize City. 
 
Immigration 
----------- 
15.  (SBU) Ambassador Barclay described the importance of 
immigration issues for El Salvador, where polls show that 70 
percent of the population would immigrate to the United 
States if given the chance.  In early Fall 2005, then-Acting 
DHS U/S Beardsworth met in El Salvador with Salvadoran 
officials to request cooperation with the increase in 
deportations that he described privately as a "train 
barreling down the track."  To deal with that challenge, he 
outlined a number of initiatives to improve the processing 
of deportees, and even promised "up to $100 per deportee" in 
processing fees for the Salvadorans. 
 
16.  (SBU) The Embassy and the Salvadorans then created a 
deportation working group to follow up.  However, DHS has 
not followed through on commitments U/S Beardsworth made 
during that initial meeting.  For example, DHS halted 
cooperation with Salvadoran consulates in the United States 
in developing interview procedures based on 
videoconferencing.  Meanwhile, Salvadoran officials have 
begun to complain to DHS about deportations that exceed 
agreed-upon limits on the number of deportees per flight, as 
well as about flight frequency, the mixing of criminal and 
noncriminal deportees, and other issues.  The Salvadorans 
raised deportation issues in the February Bush/Saca meeting 
and hope to build on momentum from that meeting when they 
meet with senior DHS officials on April 18 in Washington to 
discuss next steps. 
 
17.  (SBU) Ambassador Derham voiced concern that rhetoric 
accompanying the debate on immigration reform in the United 
States creates a significant public diplomacy challenge. A/S 
Shannon noted the constructive role played by some of the 
Central American governments and Mexico in discussing 
immigration.  This has had the effect of calming down the 
public and putting the issue in a better light.  Ambassador 
Derham noted that the decision not to offer TPS for 
Guatemalans will give more influence to politicians who 
deliver an anti-American message. 
 
18.  (SBU) Recommendation:  Coordinate reporting and other 
communications to inform Washington audiences on the 
potential impact immigration reform could have on their host 
countries.  Follow-up:  Embassy San Salvador. 
 
CAFTA Implementation 
-------------------- 
19.  (SBU) Ambassador Ford noted the challenge of CAFTA 
implementation, both technical and economic, especially in 
the face of last-minute attempts by some sectors to maintain 
trade barriers.  Another challenge he outlined is how to 
manage expectations in the medium term, as people discover 
that the agreement is not an instant panacea.  The new 
government in Honduras supports CAFTA, but they will need to 
show that it delivers economic prosperity to the people. 
That is a challenge for governments in the region and for 
the United States--we need to find a way to talk to the 
public about trade in a way that makes sense to them. 
Ambassador Eaton suggested that publicizing local success 
stories would be an important tool in this effort. 
 
20.  (SBU) Ambassador Eaton said Panama is working on an FTA 
with the United States and hopes to complete it before U.S. 
midterm elections, which USTR believes possible. 
Panamanians hope to take advantage of niche agricultural 
markets in the United States; they understand, however, that 
their future is not in agriculture.  The FTA has about a 55 
percent public approval rating, and even the opposition is 
beginning to understand its benefits. 
 
21.  (SBU) Ambassador Langdale said CAFTA was a nonissue in 
the recent presidential election in Costa Rica, which Oscar 
Arias won by only 18,000 votes.  The Assembly is two-thirds 
in favor of CAFTA, free trade, and the United States in 
general.  Ambassador Langdale said CAFTA will pass, but the 
public sector union may create headaches for implementation- 
-the union's leader promised "fiery street demonstrations" 
if CAFTA is implemented. 
 
22.  (SBU) Ambassador Derham said that Embassy Guatemala is 
focused on CAFTA implementation now that Guatemalans 
understand the agreement is not self-executing and requires 
legislative changes.  Ambassador Derham felt the stage was 
set for CAFTA implementation with the visits of Deputy 
Secretary Zoellick and Secretary of Commerce Gutierrez last 
 
SIPDIS 
fall, but short-term implementation problems persist. 
 
23.  (SBU) Recommendation:  A) Share best practices on CAFTA 
outreach and implementation efforts.  Follow-up:  Embassy 
Tegucigalpa. 
 
Corruption 
---------- 
24.  (SBU) Ambassador Eaton said that despite the negative 
impact that corruption has on the investment climate, the 
economic elite in Panama were reluctant to tackle the issue- 
-after all, the status quo has worked well for them.  In 
societies where laws are rarely enforced, Ambassador Ford 
suggested that agreeing on a common definition of corruption 
is important.  He suggested that preventing corruption by 
promoting a culture of lawfulness is an effective means of 
addressing the issue.  Education on public ethics, beginning 
in primary schools, is important too.  Coalition building 
with NGOs, the media, and the private sector is also useful, 
Ambassador Eaton said.  For Panama, working with the banks 
is critical, given the country's history of money 
laundering.  Ambassador Eaton suggested the creation of a 
multi-agency task force on combating corruption. 
 
25.  (SBU) Ambassador Eaton highlighted visa revocations as 
a useful tool in drawing attention to the issue, a point 
that Ambassadors Trivelli and Ford supported.  USAID's 
regional programs to tackle corruption were highlighted. 
CAFTA was also mentioned as a tool for tackling corruption. 
Ambassador Barclay raised the example of the ethics law in 
El Salvador, which everyone is in favor of, but which has 
gotten no political traction since it was introduced four 
years ago. 
 
26.  (SBU) Recommendation:  A) Disseminate additional 
information on USAID anti-corruption programs.  B) Encourage 
the creation of multi-agency tasks forces on corruption. 
Follow up: Embassy Panama City. 
 
Regional Integration 
-------------------- 
27.  (SBU) Central American governments are members of 
numerous smaller organizations that the United States has 
not traditionally been well positioned to engage or 
understand.  There are usually no U.S. demarches associated 
with CARICOM meetings, and the Department has little idea of 
the dynamic in these meetings, or of the deals often struck 
on the margins.  A/S Shannon said he wants to get the 
Department more focused on such regional organizations, and 
he hopes that the next two months will see more action on 
this, as these types of meetings are the seedbed for ideas 
in the region.  A/S Shannon asked all participants to think 
about how regional integration should work, and whether it 
should be implemented locally or from Washington. 
 
28.  (SBU) On physical integration issues, Ambassador Eaton 
said Panama hopes to maximize the advantages of its 
geographic location, and the government hopes Panama will 
become the Singapore of the region, backed by trade 
processing zones, free trade zones, good port facilities, a 
widened canal, and banking infrastructure.  Ambassador 
Trivelli suggested that Panama should inform others in the 
region about their plans for the canal so that they would 
avoid wasting effort on dry canals and similar 
infrastructure projects. 
 
29.  (SBU) Ambassador Langdale provided a presentation on 
regional infrastructure integration, describing Central 
American and Mexican efforts to plan jointly for 
telecommunications, electricity, and transportation 
infrastructure improvement through the 2001 Plan Puebla- 
Panama.  In terms of implementation, however, he noted that 
governments in the region have a poor track record, citing 
the uncertain future of a Pacific corridor road as an 
example.  Ambassador Langdale suggested working closer with 
the Inter-American Development Bank to help governments 
coordinate efforts.  Several Ambassadors also inquired 
regarding the status of OPIC's plans to establish an 
investment fund for Central America, some of which could be 
used to improve infrastructure. 
 
30.  (SBU) Recommendation:  A) Establish a 
political/economic reporting officer position based in 
Central America to coordinate regional integration issues. 
Follow-up: Embassy San Jose. 
 
31.  (SBU) Ambassadors Barclay, Derham, Dieter, Eaton, Ford, 
Langdale, and Trivelli cleared this cable.