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OO RUEHWEB

DE RUEHSO #0042 0181541
ZNR UUUUU ZZH
O 181541Z JAN 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6287
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 7368
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7713
RUCPDOC/USDOC WASHDC 2685

UNCLAS SAO PAULO 000042 
 
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: WESTERN HEMISPHERE:  VENEZUELA, CHAVEZ'S REGIONAL AND 
INTERNATIONAL INFLUENCE; MERCOSUL SUMMIT IN RIO DE JANEIRO; SAO 
PAULO 
 
 
¶1. "From Venezuela To The World" 
 
Political columnist Eliane Cantanhede commented (1/18) in liberal, 
largest national circulation daily Folha de S. Paulo: "When Hugo 
Chvez speaks about a '21st Century socialism,' each one understands 
it as he/she wishes. [Brazilian] Foreign Minister Celso Amorim, for 
example, believes that this is just a slogan. Chvez's most powerful 
weapon is oil, of which Venezuela is the world's fifth main 
producer. When he invests in the neighboring nations' presidential 
elections, when he buys Kirchner's support by acquiring Argentine 
bonds, when he is the first leader of the region to exchange crude 
oil from Ecuador for processed oil products, and when he helps 
Paraguay to renegotiate its bonds, Chvez has behind him not only 
his personality and impulse, but oil - high cost oil. This is why he 
has already cut Venezuelan production and is negotiating with OPEC a 
10% oil price increase in the international market. Iranian 
President Mahmud Ahmadinejad's presence in Ecuadorian President 
Rafael Correa's inauguration was almost unnoticed.... Iran produces 
oil, has a closed regime and has been listed among the US's main 
adversaries, a latent Iraq.  Any coincidence?.... Chvez's horizon 
is not in Bolivia, or in Argentina, or in Brazil.  This is just the 
beginning." 
 
¶2. "Mercosul's Condemnation" 
 
The lead editorial in center-right national circulation daily O 
Estado de S. Paulo maintained (1/18): "Only nations that adopt a 
democratic regime can become Mercosul partners. But the bloc's 
democratic clause is cleverly vague.  It neither defines what 
democracy is nor lists violations of the democratic order that would 
result in expulsion from the bloc.... Venezuela became a full member 
of Mercosul in August when President Hugo Chvez had just eliminated 
all traces of democracy in that nation, except elections.... Like 
Venezuela, Bolivia is not a democracy.  There were elections in both 
nations, but they lack other fundamental [democratic] requirements. 
In Venezuela, all powers are concentrated in Colonel Hugo Chvez's 
hands.... In Bolivia, the Judiciary has just suffered a deadly blow 
with the creation of community courts, the Legislative is 
inoperative, and the Constituent Assembly's work depends on what 
President Evo Morales will decide.... Morales-controlled 'social 
movements' are eliminating by force any vestige of democracy in the 
country. It is exactly the entry of Bolivia in Mercosul as a full 
member that the Brazilian government is supporting.... But Mercosul 
is not a benevolent entity. It is an organization of political and 
commercial coordination and is structured as a customs union.... In 
practical terms, this means that the customs union, which was 
already fragile, will be dead and buried as a result of Bolivia's 
association. But what is worse is that with the entry of Bolivia 
following that of Venezuela, Mercosul will become a bloc of 
differing and conflicting tendencies. The four original partners 
(Argentina, Brazil, Paraguay and Uruguay) have been increasingly and 
consistently committed to a market economy. The two newcomers have 
fostered extravagant experiments of socialization of production.... 
And being a political and ideological mess, how will Mercosul 
present itself as a political unity or be taken seriously in global 
negotiations?  The entry of Bolivia as a full member as happened 
with Venezuela, does not enlarge or strengthen Mercosul, but 
condemns it inexorably, if not to death, to irrelevance." 
McMullen