VZCZCXYZ0010
OO RUEHWEB

DE RUEHBU #1283/01 1582003
ZNR UUUUU ZZH
O 072003Z JUN 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4815
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT

UNCLAS BUENOS AIRES 001283 
 
SIPDIS 
 
STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC, 
WHA/EPSC 
CDR USSOCOM FOR J-2 IAD/LAMA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KPAO OPRC KMDR PREL MEDIA REACTION
SUBJECT: MEDIA REACTION PERUVIAN PRESIDENT-ELECT ALAN 
GARCIA; US PROPOSAL TO IRAN; WORLD BANK AND ARGENTINA; 
BRAZIL'S GEOPOLITICAL CONCERNS 06/07/06 
 
¶1. SUMMARY STATEMENT 
 
Today's key international stories include the 
implications of Peruvian elections; the USG proposal 
to Iran; the World Bank granting new loans to 
Argentina; Brazilian military's geopolitical concerns; 
and hundreds of landless farm workers invading 
Brazilian Congress to demand agrarian reform. 
 
¶2. OPINION PIECES AND KEY STORIES 
 
- "Further from Bush, closer to Chavez" 
 
Left-of-center "Pagina 12's" Lima-based correspondent 
Carlos Noriega writes (06/07) "Without any need to 
fuel his confrontation with Venezuelan President Hugo 
Chavez in order to win votes, Alan Garcia showed a 
conciliatory attitude. 
 
"Yesterday, the brand-new president of Peru bluntly 
rejected the possibility of leading an anti-Chavez 
regional front, as some predicted, based on his bitter 
spat with Chavez. Garcia asserted that, as president, 
he expects to have a 'good relationship' with his 
Venezuelan counterpart. 
 
"In his first statements to the foreign media, Garcia 
distanced himself from the US and states conditions 
for the implementation of an FTA with the US. 
 
"During his election campaign, Garcia sought to seduce 
the right-wing electorate by presenting himself as a 
reliable candidate for the US and had a harsh 
confrontation with Venezuelan president. As president- 
elect, Garcia radically changed the aggressive tone he 
had used to speak of Chavez and marked his points of 
disagreement with the current Peruvian president, 
Alejandro Toledo, a strong US ally." 
 
- "Alan Garcia gives stipulations for an FTA with the 
US" 
 
Business-financial "El Cronista" reports (06/07) "The 
Toledo administration submitted the projected FTA 
negotiated with the US to the Peruvian Congress for 
its ratification... Social-Democrat Alan Garcia said 
he would analyze the trade deal before supporting its 
Congressional ratification (the political party he 
belongs to is currently the majority opposition 
force). 
 
"... During a press conference, Alan Garcia said 
yesterday that he would not appoint a 'pro- 
nationalization' member in his economic team, and he 
promised to take care of the country's financial 
stability. 
 
"Garcia also said Chile will be the model to be 
followed by Peru and he pleaded for resolute policies 
in South America in order to obtain the region's 
definitive insertion in the international scenario." 
 
- "The first challenges of a government without a 
'honeymoon'" 
 
Dolores Tereso, on special assignment in Lima for 
daily-of-record "La Nacion," comments (06/07) "Alan 
Garcia knows that his governmental task will not be 
easy. With a past that generates mistrust, without a 
majority in Congress... and having won runoff 
elections with a big number of 'burrowed' votes, he is 
aware that the 'honeymoon' will be anywhere from short 
to non-existent. This is why from now and throughout 
the first days of his government, the president-elect 
will attempt to satisfy everyone he can. 
 
"To put an end to the mistrust he generates within the 
business community and in the US, Garcia will 
reportedly authorize his party to pass the FTA with 
the US in Congress, which will be discussed next 
week... 
 
"Another decision Garcia will have to make within the 
next days... will be the appointment of the members in 
his cabinet... 
 
 
"On the other hand, in order to mitigate eventual 
social pressures in a country that shows it is 
increasingly fed up with all political leaders, Garcia 
has prepared a series of austerity measures, among 
them the reduction of high governmental salaries by 
50%... 
 
"Perhaps, the biggest challenge to be met by Garcia 
will be mitigating poverty, which affects half of the 
inhabitants of the country." 
 
- "The US makes an unusual proposal to Iran related to 
its nuclear program" 
 
Daily-of-record "La Nacion" reports (06/07) "In an 
unprecedented gesture, the US offered to join European 
countries in providing Iran with nuclear technology in 
return for Iran's suspension of its polemic uranium 
enrichment program. 
 
"The proposal (which is considered an important US 
concession bearing in mind that the US has not 
dismissed the use of force against Iran), is part of a 
series of potential rewards, which were submitted 
yesterday to Tehran by Javier Solana, High 
Representative for the Common Foreign and Security 
Policy of the European Union. 
 
"... While Iran has not accepted the proposal yet, it 
has left a door open to dialogue. Iranian nuclear 
negotiator Ali Larikhani said that the initiative 
includes some 'positive steps,' but also 'some 
ambiguities that should be removed.' 
 
"For his part, US President George W. Bush termed 
Iran's initial reaction as 'positive.'" 
 
- "The World Bank renews criticism but approves loans" 
 
Ana Baron, Washington-based correspondent for leading 
"Clarin," writes (06/07) "Biaggio Bossone, the Italian 
WB head, asked for the rights of 'holdout' 
bondholders. Pierre Dusquenes, the French WB head, 
asked the WB to take into account the review of the 
Argentine economic status currently being performed by 
an IMF delegation in Buenos Aires. Yoshio Okubo, the 
Japanese WB head, warned on the risk of inflation, and 
other directors warned on the investment climate and 
asked to improve governance, and speed up the 
renegotiation of agreements with privatized 
corporations. 
 
"These were the main demands related to Argentina 
which came up yesterday in Washington during a WB 
Board meeting, in which loans for a total amount of 
180 million dollars were approved. 
 
"It was an agitated meeting, but the WB Board approved 
the strategy of assistance for Argentina, which is the 
WB plan of action for the next three years and 
involves a total amount of 3.3 billion dollars in 
loans." 
 
- "Brazil reviews its geopolitical concerns" 
 
Leading "Clarin" carries an op-ed piece by Fabian 
Calle, political analyst, who opines (06/07) "The US 
military presence in Paraguay, the political, social 
and legal changes in Bolivia, Chavez' political and 
economic activism, and tensions between Argentina and 
Uruguay have led Brazilian military spokespersons to 
emphasize the need for moving the Brazilian focus from 
the Amazon area and its border with Colombia, to 
threats like narcotrafficking, armed groups, 
contraband and the trafficking of weapons. The same 
sources underscored the need for increasing Defense- 
related expenditures. 
 
"... According to the military, the new regional 
reality should also lead one to place more emphasis on 
the deployment of troops and equipment on (Brazil's) 
borders with Paraguay, Bolivia and Uruguay... Another 
element to be considered is the US' increasing 
influence on Paraguay and Uruguay. 
 
"Brazilian military are also mistrustful over Chavez's 
 
 
 
influential ideological and economic role in the 
region, particularly in Bolivia..." 
 
¶3. EDITORIALS 
 
- "The Peru of Alan Garcia" 
 
Daily-of-record "La Nacion" carries an editorial that 
reads (06/07) "With the arrival of Alan Garcia to the 
Peruvian presidency for a second time, a new stage has 
begun, which can be termed as hopeful. 
 
"In principle, Garcia's victory over Humala has 
returned confidence to international investors as well 
as balance markets... 
 
"... While it is true that Garcia pleaded for a 
government of unity, analysts believe he would not 
include Union por el Peru, Humala's political party... 
 
"First and foremost, Garcia will have to struggle 
against the ghost of polarization in a country where 
millions are socially excluded... 
 
"Garcia will also have another challenge - the 
achievement of some balance with his Latin American 
neighbors... Garcia has hurried to speak of 'good ties 
with, and respect for' Venezuela, and he has also said 
he is not interested in leading an 'anti-Chavez' 
hemispheric movement as long as there is no 
interference in Peru's domestic affairs... 
 
"While challenges are harsh, on the one hand, Alan 
Garcia has impressive economic growth in his favor, 
which was obtained by the Toledo administration, 
however, on the other hand, he will have to remove the 
bad memories left by his first presidency..." 
 
- "The return of Alan Garcia" 
 
An editorial in leading "Clarin" reads (06/07) "The 
return of Alan Garcia to the Peruvian presidency can 
be contributed to the learning process of societies... 
and  the lack of more attractive options and the fear 
raised by Ollanta Humala's background. 
 
"... Garcia made a proposal of 'responsible change,' 
which gathered a broad spectrum of support... In this 
respect, Peruvians voted last Sunday in a way that 
reaffirmed their democratic convictions and will renew 
their expectations of change." 
 
To see more Buenos Aires reporting, visit our 
classified website at: 
http://www.state.sqov.gov/p/wha/buenosaires 
 
GUTIERREZ