VZCZCXYZ0028
OO RUEHWEB

DE RUEHSO #0466/01 1231856
ZNR UUUUU ZZH
O 031856Z MAY 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4972
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 6115
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7058
RUCPDOC/USDOC WASHDC 2407

UNCLAS SAO PAULO 000466 
 
SIPDIS 
 
SIPDIS 
 
STATE INR/R/MR; IIP/R/MR; WHA/PD 
 
DEPT PASS USTR 
 
USDOC 4322/MAC/OLAC/JAFEE 
 
E.O. 12958: N/A 
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: Media reaction: Bolivia; Sao Paulo 
 
 
"Bolivia and Reelection" 
 
Op-ed in Folha de S. Paulo (5/3) says: "Some opposition 
politicians...said that this [crisis with Bolivia] would be 
[President] Lula's 'blackout'. Not so fast.... It is not clear if 
and when gas prices will be raised. Bolivia has no one to sell its 
product to... In the midst of the problem, Lula has a great chance 
to make something positive in the foreign policy arena after years 
of much fanfare and few results. If the PT leader finds a reasonable 
way out of this episode he may win yet another argument for his 
reelection campaign. We'll see." 
 
"He even has the right to make a mistake" 
 
Article by Clovis Rossi in liberal Folha de S.Paulo (5/30) states: 
"During his [presidential] campaign Evo Morales promised to 
nationalize all natural resources. Voters believed his promise, 
which led to his victory. That's how democracy works. Too bad that 
some of those who call themselves democrats only like those who 
fulfill the promises that please them.... It is also does not make 
sense to attack [Brazil's Oil Company] Petrobras for having invested 
in Bolivia...Didn't the liberal creed say Brazilian companies should 
invest to compete in the global market?...Petrobras did so...the 
only problem was that the natural gas business was profitable for 
the companies, but it did not help to diminish the extreme misery of 
the majority [of Bolivians], a factor that became a fuel for the 
popular mobilizations that took down a series of administrations and 
led Evo Morales to power. Now, he tries to improve the life of his 
people by putting natural gas in the hands of the State. Past 
experience shows this is not the best path to take, but he is 
entitled to try it." 
 
"Delirious and Futile Diplomacy" 
 
Columnist Elio Gaspari says in liberal Folha de S. Paulo (5/3): 
"[President] Lula... orchestrates a foreign policy which is futile 
in its method, exibitionist in its ritual and of disastrous 
results.... Brazil distanced itself from those it should have moved 
close to (Argentina and Chile), and got close to those it should 
have distanced itself from (Venezuela and Cuba). Lula threw away the 
chance to have a politically relevant role in international 
negotiations...when Argentina was left to fight alone for the 
reestructuring of its external debt.... While "our guide" believes 
he is redesigning the world's geopolitical map, Mercosul is sinking 
thanks to a web of bilateral accords weaved by the comercial 
diplomacy of the U.S. [Lula was] charmed by the foreign policy of 
big contractors and ratified an irresponsibe act of dependency on 
the Bolivian natural gas." 
 
"From ALCA ro ALBA" 
 
Trade specialist Marcos Sawaya Jank writes in center-right O Estado 
de S. Paulo (5/3): "Bolivia's nationalization of oil and gas will 
bring serious harm to Brazil and shows that populism and breaching 
contracts continues to be Latin America's  'easy way out' to avoid 
necessary reforms... The economy shows however that 'there is no 
free lunch'... Nationalization quickly turns into incompetent 
administration and unfettered political distribution of jobs. Cheap 
populism quickly leads to crises in production and investment, with 
accelerated inflation, slow growth and increases indebtedness... 
This hemisphere's current tendency is towards political and trade 
fragmentation... The FTAA [project] has been abandoned for two 
different integration models. On one side the USA, Chile and Mexico 
lead by signing FTAs that no longer follow geographical 
considerations... We [also] have the... ALBA, a project proposed 
by... Chavez... and Castro as an integration model focused on 
political-ideological alignments... The gap between these two models 
grows wider and puts an end to Lula's dream of creating a South 
American Community of Nations...It's time we reflect seriously about 
our foreign policy goals...." 
 
"Only Planalto didn't see this coming" 
 
Center-right O Estado de S.Paulo (5/3) editorializes: "Bolivian 
President Evo Morales' decision to nationalize the country's oil and 
gas production... was a lethal blow to President Lula's policy for 
Latin America... [and] brought to light [Lula's] abysmal alienation 
regarding the widely reported developments that led to this foretold 
crisis... The heart of the matter is [the Lula administration's] 
ignorance of regional realities, both past and present... For one of 
the poorest countries in the region, devastated by colonialism and 
imperialism... controlling its mineral resources is... a national 
matter and a symbol of the demand for social justice... It was a 
inevitable that Morales would do what he did... [and] it was also 
inevitable that Brazil has at this critical juncture a president 
without political-diplomatic understanding and a Foreign Ministry 
driven by delusionary ambitions...." 
 
"When diplomacy gets mixed with ideology" 
 
Business columnist Cristiano Romero writes today in 
business-oriented Valor Economico (5/3): "The boisterous oil 
nationalization announced by Bolivian President Evo Morales cruelly 
exposed, with the ideological nature of the Workers Party's (PT) 
foreign policy... The Lula administration acknowledged that it was 
caught unawares, which was obvious from the cabinet meeting that 
took most of the day yesterday [to discuss this issue]... Last week, 
Itamaraty Secretary General Samuel Pinheiro Guimaraes went to La Paz 
to deal with this issue. 'Either he misunderstood everything he saw 
in Bolivia or they fooled him, or he ignored what was about to 
happen because of ideology and hemispheric solidarity,' says the 
experienced Ambassador Rubens Barbosa [who was President Cardoso's 
envoy to Washington]." 
 
"Bolivia opens diplomatic crisis with Brazil" 
 
Business-oriented Valor Economico editorializes (5/3): "The Bolivian 
government's attitude could be called anything but unexpected. 
Morales and his ministers had been stepping up their hostile tone 
for weeks, with a visible change of attitude towards dialoguing with 
Brazilian envoys... [The ideologues in the Lula administration did 
not expect such a hostile attitude from Evo Morales, whom they 
supported in the elections... Bolivia could be hit hardest by its 
own actions... Brazil consumes 85% of all Bolivian gas and there is 
no other equally important market to replace it... The best way to 
reach an agreement is to place strong direct pressure on Bolivia. 
Ideological affinities once cradled hopes for a productive 
relationship between the two countries, but are meaningless now. 
Chavez's mediation could have some effect, but its diplomatic cost 
tends to be heavy for Brazil...." 
McMullen