VZCZCXYZ0008
PP RUEHWEB

DE RUEHAC #0018/01 0112200
ZNR UUUUU ZZH
P 112200Z JAN 07
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC PRIORITY 5223
INFO RUCNMER/MERCOSUR COLLECTIVE
RUMIAAA/USCINCSO MIAMI FL//SCJ3/SCJ33/SCJ34/SOCSO LNO//
RHEHNSC/WHITE HOUSE NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC

UNCLAS ASUNCION 000018 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/BSC, INL/LP (JIM HIDES) 
EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR LYANG 
NSC FOR SUE CRONIN 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL ECON EINV EAIR KCRM KMCA CU PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE DECEMBER 
¶23. 2006 - JANUARY 12, 2007 
 
¶1. (U) SUMMARY: 
 
-- Paraguayan Engineering Know How 
-- Threshold Program, First Ever Inter-Institutional Agreement 
-- Cuban National Arrives Safely in Miami 
-- First Class Graduation 
-- Paraguay Attracting Investment 
 
 
PARAGUAYAN ENGINEERING KNOW HOW 
 
¶2. (U) An Anatov 124-100, the largest cargo plane in the 
world, was in Paraguay January 5 to help a Paraguayan firm 
complete the export of a hydroelectric turbine assembly to 
Sweden.  Paraguayan company CIE produces the turbine 
assemblies just outside Asuncion, in this case under contract 
from General Electric Canada.  The company produces all 
of the components for the huge turbines save the rotors, 
which require much more sophisticated and expensive 
machining. 
The company serves as an example that Paraguayans, given the 
right motivation and training, have the potential to 
compete in world markets, despite Paraguay's landlocked 
status. 
 
 
THRESHOLD PROGRAM, FIRST EVER INTER-INSTITUTIONAL AGREEMENT 
 
¶3. (U) The Public Ministry and the National Police signed the 
first ever Inter-Institutional Agreement January 4 under 
the MCC Threshold Program to strengthen coordination for 
investigating corruption and economic crime cases.  The 
responsibility for investigating criminal cases is formally 
assigned to the National Police but many prosecutors 
perform their own investigations due to lack of 
professionalism and corruption in the police force.  Under 
the agreement, 
up to 60 police will be commissioned directly to the Public 
Ministry, which will have supervision responsibility over 
the police.  Police will work in a newly established forensic 
laboratory and as part of an investigative field unit. 
As part of the Threshold Program these police will be vetted 
for human rights abuses and polygraphed. 
 
 
CUBAN NATIONAL ARRIVES SAFELY IN MIAMI 
 
¶4. (U) Post succeeded in orchestrating the safe arrival in 
Miami of Dr. Adrian Hernandez Ojeda, a Cuban national who 
received a Significant Public Benefit Parole from DHS.  Dr. 
Hernandez' travel was complicated first by the expiration 
of his Cuban passport, and also by his planned route which 
included a stop in Bolivia, where he faced risk of detention 
by immigration authorities.  Post convinced Dr. Hernandez to 
change his travel plans and go through Santiago vice Santa 
Cruz.  We then coordinated with Embassy Santiago to ensure 
that he would be allowed to board his plane, and 
further with DHS Miami to ensure his successful parole into 
the United States.  Asuncion thanks the consular sections 
in La Paz and Santiago for their valuable assistance in 
making this case a success. 
 
 
NEW POLICE UNIT GRADUATES FIRST CLASS 
 
¶5. (U) The Special Urban Police graduated its first class of 
247 students December 26.  This new Police Unit represents 
an experiment in community developed by the Minister of 
Interior and will focus its efforts in the city of Asuncion. 
The 
new police officers will have the power to arrest, write 
reports, and carry firearms.  They are not expected to begin 
operating on the streets of Asuncion until early February 
¶2007.  The stated idea behind the Special Urban Police  is to 
rebuild trust with Paraguayan citizens who have lost faith in 
the police.  Currently the Special Urban Police lacks 
 
 
infrastructure, such as detention space and the ability to 
process complaints.  The graduation of the new students was 
attended by the President, Vice President, Minister of 
Interior, Deputy Chief of Mission, and RSO. COMMENT: There 
appears 
to be some tension between the PNP and the Special Urban 
Police  The tension was exacerbated by the Minister of 
Interior's speech at the graduation in which he essentially 
described the PNP as corrupt and failing and pointed to the 
Special Urban Police as the answer to Asuncion's crime 
problems.  END COMMENT.  Separately the Ambassador attended 
SENAD's induction of 50 new agents. The Vice President served 
as the guest of honor when the President had to cancel due 
to time constraints. 
 
 
PARAGUAY ATTRACTING INVESTMENT 
 
¶6. (U) Paraguay's Ministry of Industry and Commerce approved, 
as of December 5, 2006, a record US$296 million in 
investment projects falling under special law 60/90 which 
establishes various tax exemptions for new investments. 
The 38 separate projects, which represent approved  plans and 
not necessarily consummated investments, will 
reportedly generate nearly 2,400 new jobs.  The amount is 
nearly five times greater than the figure for 2005 and about 
15 percent higher than the next highest total from 1998, 
although it represents only about 3.5 percent of GDP.  The 
projects were split nearly evenly between foreign and 
domestic capital.  The telecom sector dominated, with seven 
projects worth US$171 million, about 58 percent of the total. 
 A $40 million investment in beverage production was the 
largest industrial sector investment.  The biggest foreign 
source was Japan with US$81.7 million in projects, followed 
by the US with $66.7 million in two approved projects.  The 
US investment represents 35 percent of the foreign 
capital and 22.5 percent of the total.  The US investment 
projects involved the telecom and agro-industrial sectors. 
CASON