VZCZCXRO1365
PP RUEHRG
DE RUEHBR #0759/01 1201522
ZNR UUUUU ZZH
P 301522Z APR 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 8802
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 4282
RUEHSO/AMCONSUL SAO PAULO 9739
RUEHRG/AMCONSUL RECIFE 6575
RUEHAC/AMEMBASSY ASUNCION 6055
RUEHBU/AMEMBASSY BUENOS AIRES 4730
RUEHBO/AMEMBASSY BOGOTA 4202
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RUEHGE/AMEMBASSY GEORGETOWN 1266
RUEHLP/AMEMBASSY LA PAZ 5306
RUEHPE/AMEMBASSY LIMA 3441
RUEHMN/AMEMBASSY MONTEVIDEO 6856
RUEHPO/AMEMBASSY PARAMARIBO 1299
RUEHQT/AMEMBASSY QUITO 2208
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 05 BRASILIA 000759 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR IRM/BPC/EDIP: TNIBLOCK, GCALLOWAY 
 
E.O. 12958: N/A 
TAGS: ECON EINV ENRG KPAO OIIP CVIS PGOV SENV BR
SUBJECT: BRAZIL: MANAUS MEETINGS, MEANDERINGS AND MUSINGS 
 
¶1. (SBU) Summary:  As Virtual Presence Post Officer, Econoff visited 
Manaus, State of Amazonas from April 16-19 for public outreach and 
economic-related meetings.  While there, she visited the U.S. 
Consular Agent in Manaus, the U.S. Chamber of Commerce-Amazonas, and 
the bi-national center, Instituto Cultural Brasil-Estados Unidos 
(ICBEU), in addition to meeting with several environmental 
scientists.  Econoff also conducted public outreach with print, 
television and web-portal media, received an introduction to 
administrators of the free trade zone area (SUFRAMA), and delivered 
a presentation to the U.S. Chamber members on visas and our USG-GOB 
cooperative efforts on biofuels.  Her interlocutors expressed 
concern over the potential environmental and social impacts of 
increased sugar cane cultivation desired for ethanol production and 
the reconstruction of a highway through the rainforest to Porto 
Velho.  Manaus revealed itself to be a city in transition, with its 
own increasing development, environmental and social concerns. 
Finally, despite the U.S.'s continuing status as the number one 
trading partner for the Manaus free trade zone, there are challenges 
for this entity to overcome in attracting continued U.S. foreign 
direct investment to the region - rather than being  diverted to 
other areas of the country by promises of tax preferences.  End 
Summary. 
 
A River Runs Through It 
----------------------- 
 
¶2. (U) Manaus, on the north bank of the Rio Negro, has about 1.65 
million habitants -- not a small city, despite the image that "the 
Amazon" conjures up in most people's minds.  Manaus is famous for 
the Meeting of the Waters, where the Rio Negro meets the Rio 
Solomoes.  The tour, offered by several operators in the region, 
enables one to see the striking demarcation between the two rivers. 
Originating in Colombia, the Rio Negro, as its name suggests, 
consists of darker waters, whereas the Solomoes  -- originating in 
the Andes of Peru (where it is known as the Maranon) -- is both 
colder, faster moving, and lighter-tan in color.  It takes 
approximately eight to ten kilometers of co-mingling, farther 
upriver, before the waters truly merge into one and eventually 
become what is commonly referred to as the Amazon River. 
 
¶3. (U) Little, from goods to people, gets brought into or out of the 
region without using these waterways.  Present throughout the river 
are some very large boats and barges, often transporting cargo and 
petroleum products, as well as smaller fishing and ferry boats. 
Petrobras-affiliated gasoline/diesel vending boats, as well as some 
generic mom-and-pop enterprises, are anchored at various parts of 
the river for boats to refuel.  In the smaller igarapes, or 
tributaries, houseboats are docked singly or in multiples, often 
appearing to house a large extended family between three or more 
boats, among which the family members hop freely.  The river is free 
of bridges in this area, but ferries travel every half hour at 
certain points between the other side of the river to bring workers 
and vehicles to and from Manaus.  Torrential rains the previous week 
had caused many people in the region to lose their homes.  The 
river's water-level was fairly high as a result.  In the dry season, 
however, special navigators are employed who are well-versed in the 
oft-changing depths and the location of sand bars that can inhibit 
the movements of some of the larger boats. 
 
¶4. (U) Manaus has some big-city problems, among them increasing 
crime, transportation issues, pollution of the igarapes, and a 
population who does not want to submit to government efforts to move 
them out of where they have set up ramshackle homes on the river's 
and igarapes' banks.  Even when they are offered free, comparatively 
nicer housing, many stubbornly stay put.  They often do not want to 
leave the conveniences of the city, and their friends and family 
around them, and easier access to food and water only to be moved 
out to the outskirts and incur higher transportation costs and more 
difficult access to necessities.  The problems of pollution of the 
igarapes within the city limits, unemployment, and the general 
gentrification struggle are ongoing.  Traffic and transit delays 
continue to increase as well.  Estimates are that each month, 100 
additional cars are being introduced into the city, congesting the 
historic, narrow streets and creating chokepoints on even narrower 
bridges over the igarapes. 
 
BRASILIA 00000759  002 OF 005 
 
 
 
Consular Agency Manaus 
---------------------- 
 
¶5. (SBU) Sherre Prince Nelson has been in the city for 27 years and 
U.S. Consular Agent since 2004.  She runs a small, welcoming office 
for a large consular district whose constituents are widely 
dispersed.  The district has about 1,400 U.S. citizens, some of whom 
reside well in the interior of the Amazon as missionaries. 
Recently, since the announcement of a new policy permitting 
Brazilian visa applicants to go to any consulate for their 
interview, Sherre has been inundated with phone calls from local 
Brazilian residents who do not understand that she is a consular 
agency for U.S. citizens, not a consulate with visa adjudication 
capability.  Econoff tried hard to clarify this distinction through 
media interviews and conversations during the rest of her week in 
Manaus. 
 
Public Outreach Efforts 
----------------------- 
 
¶6. (U) The overwhelming preoccupation of most people in Manaus with 
whom Econoff spoke about the United States is -- as is often the 
case in Brazil -- our visa process.  From high-school students to 
the elderly, many didn't understand the particulars, complained 
about the cost, time, and distance required to travel to Brasilia to 
interview, and in general, indicated that they feel the process is 
onerous and one-sided.  Brazil currently has some of the longest 
non-immigrant visa interview wait times in the world, and this is in 
no small part due to the increasing value of the Real relative to 
the dollar; demand for interviews has increased 90 percent over the 
last two years.  Econoff conveyed this information so that people 
could better understand the stresses on Mission Brazil's capacity, 
and tried to mitigate the negative with the news that, as of April 
2, Brazilians may apply in any of our four issuing consulates -- 
Rio, Sao Paulo, and Recife -- and no longer just in Brasilia.  To 
dispel some of the other common myths of the process, Econoff 
informed the inquirers that the majority of visas were approved last 
year -- 76.8 percent, according to consular section-provided 
statistics -- and reassured people that Brazilians were not being 
unfairly singled out; rather, that the new processing requirements 
were put into place worldwide following September 11.  She 
emphasized the need for strong economic and social ties to Brazil 
for non-immigrant visa applicants. 
 
¶7. (U) ICBEU's gracious hospitality enabled Econoff to speak for 20 
to 30 minutes at a time with four separate English classes, with an 
audience ranging from adults to high-school level students.  She 
answered their questions on a wide variety of topics:  everything 
from the usual visa questions, to the words of a nursery rhyme that 
one girl liked to sing to her little sister (Econoff was exhorted to 
actually sing the rhyme for the other students who did not know it 
and unfortunately for them, she did); studying and living in the 
U.S.; her own background; how different some of our states are; the 
electoral college process; biofuels cooperation; environmental 
issues; and finally, the tragedy at Virginia Tech and related 
questions on gun control.  Only a few students in each class had 
traveled to the U.S. before, and many of those trips had been 
limited to Disneyworld.  A tour of the facilities revealed a 
well-equipped library, innovative instructional tools, and even a 
little museum of sorts filled with pictures and memorabilia of the 
founders and events held by ICBEU during the past 50 years, 
including several photos of former U.S. Ambassadors and other 
visiting American dignitaries. 
 
¶8. (U) In media interviews on 19 April with local newspapers "A 
Critica" and the "Jornal do Commercio," as well as the Globo 
network's Portal Amazonia webchat and a subsequent on-camera 
interview, Econoff discussed visas, USG-GOB cooperative information 
exchange on biofuels and third-country efforts, and the positive 
impacts of the visits of President Bush to Brazil and President Lula 
to Camp David.  Not surprisingly, most of what made it into print 
centered on the visa process. 
 
¶9. (U) Finally, Econoff was the featured speaker at a meeting of the 
 
BRASILIA 00000759  003 OF 005 
 
 
U.S. Chamber of Commerce-Amazonas, held at the Genius Institute of 
Technology in the Industrial Sector.  She presented a PowerPoint 
slideshow that briefly recapped her visit to Manaus, provided 
information and general advice on the visa application process, and 
discussed cooperative efforts on ethanol before taking a number of 
questions.  Despite a relatively small turnout -- only 20 or so 
people were able to make it due to other events that evening  -- the 
audience was welcoming and appreciative, and asked some questions. 
The hosts, Genius Institute, offered to host someone from the 
Embassy for another talk in the future (they provided the venue free 
of charge to the U.S. Chamber.) 
 
Environment-Related Meetings 
---------------------------- 
 
¶10. (SBU) Environmental organization representatives commented on 
the oft-repeated assertions by the GOB that sugarcane cannot be 
grown in the Amazon region and therefore, the expansion of Brazil's 
ethanol production poses no environmental threat or impact to the 
rainforest.  While the different environmentalists and ecologists 
agreed with the viability of sugarcane cultivation in the Amazon, 
they felt that it was not a given that there would be no impact. 
Two interlocutors, from the Instituto de Pesquisas Ecologicas (IPE) 
-- a USAID Environment Program partner-and the Fundacao Vitoria 
Amazonica (FVA), indicated that there are still other significant 
concerns.  Ethanol, they asserted, would promote areas of 
monoculture in Brazil.  Additional worries they expressed were: 
that by virtue of development of sugarcane fields, fewer resources 
would be designated for other crops and agricultural prices would 
rise; that a job-related migration would ensue which would have 
other unforeseen economic and ecological effects; and finally, that 
sugarcane labor on some plantations is tantamount to slave labor, 
with large-scale employers that are far from the "heroes" that Lula 
has recently called them. 
 
¶11. (SBU) Eduardo Badialli from IPE, a former State International 
Visitor and USAID contact, talked about strategic planning needs, 
and defined a few principal threats to the region.  First, he said, 
there has been a general lack of success in inhibiting illegal 
logging. "Many poor people cut down and work with illegal wood 
because they don't see any alternatives for earning a living," he 
said.  He admitted that education and conservation efforts are a 
difficult balance to achieve; the indigenous peoples who live in the 
Amazon region are gatherers, not planters, and IPE and other 
organizations are trying to respect and not change that culture as 
much as possible.  That said, his organization is involved in 
education efforts, primarily with elementary school kids and 
teenagers, but also with university students.  They are also 
investigating ways to develop and sustain ecotourism while 
minimizing its impact, taking lessons from Ecuador and Costa Rica. 
Badialli cited as another significant problem the lack of 
integration of the public policies of the various governments 
involved in the region-federal, state and municipal.  IPE relies on 
assistance from the World Bank, German banks, and the WWF. 
 
¶12. (U) Carlos Durigan, an interlocutor from the Fundacao Vitoria 
Amazonica, indicated that the majority of their support to date has 
come from WWF-Brasil, Ford Foundation, and the Moore Foundation, but 
that it is always a continual fight for resources.  They have 20 to 
25 technicians contracted, and those technicians take monthly trips 
out to the remote parts of the region.  There are also demands on 
their time to participate in fora in other cities.  The FVA has 
enjoyed a very close relationship with the Instituto Nacional de 
Pesquisas Amazonicas (INPA) for funding and for training (many FVA 
scientists were trained by INPA for their master's or doctorates.) 
Like the other environmental interlocutors, Durigan believes that 
while ethanol development may not encroach upon the forest, it will 
still impact other land development and have social ramifications. 
 
¶13. (U) For example, Durigan is worried by the increased development 
of large-machinery farms rather than those employing manual labor. 
As he said, it promotes inequality and leads to a further 
concentration of people into the cities.  He agreed with Badialli 
that policy coordination is important, and said that even if 
something is guaranteed protected by law, the reality can be 
 
BRASILIA 00000759  004 OF 005 
 
 
different or have detrimental, unforeseen effects.  He cited a 
petroleum refinery near the Meeting of the Waters as an example, 
saying there has been some pollution problems, and that some 
regional environmental measures have either been enacted too slowly 
to avoid problems, or in contrast, so quickly that they were not 
well thought out. 
 
¶14. (U) Another group, the Fundacao Paulo Feitoza (FPF), would like 
to develop biofuels from babacu (pronounced bah-bah-SOO) (palm nut) 
indigenous to the region, and foresees good benefits for several 
indigenous communities in terms of employment.  They would be 
culling a naturally occurring product which can be used for various 
purposes in addition to the oil for biodiesel.  This sustainable 
development project has, unfortunately, become a victim of lack of 
funding.  The project is estimated to cost only R$160,000 
(US$80,000) but there does not seem to be significant hope right now 
in attracting any more GOB investment, or from their usual sources 
of support in the region, manufacturing and high-tech companies. 
Foreign investment has so far not materialized for this project. 
The foundation, which also has other research and development 
projects related to computer voice processing for the deaf from sign 
language and cell phone voice recognition and game software, was 
recently forced to lay off staff.  Even our interlocutor is only 
employed there part-time on a consultant basis. 
 
Highway to . . . ? 
------------------ 
 
¶15. (U) Environmentalists also view warily the planned resurrection 
of the BR-319 highway between Manaus and Porto Velho, the capital of 
the State of Rondonia (the route between the two has been washed out 
and the only major paved road from Manaus leads north, to Boa Vista 
and eventually, Caracas).  It is feared the reconstruction of this 
road will create a "fishbone effect" of development along the sides 
of the highway, thereby creating some increased settlements, and 
related deforestation due to illegal logging and mining.  While 
parks have been created along the sides to try to protect the land, 
enforcement is difficult and people, particularly those who already 
live in the interior, just tend to move in and plant their families 
and makeshift dwellings.  In addition, the long-term viability of 
this road is seen as suspect, particularly when combined with 
current practice in Brazil of awarding construction and paving jobs 
to the lowest bidder without much forethought as to the quality and 
durability of the final product, along with a lack of funds for 
continued maintenance.  The U.S. Chamber interlocutors indicated 
that they have heard that mega-trucks -- extremely long, heavy 
trucks resembling mini-trains -- were being proposed to carry goods 
on this highway, and that there was significant doubt that the 
highway would be able to handle the traffic or weight of the trucks. 
 Many people are clamoring for a railroad to be built instead, but 
even if that were to occur, it could also suffer problems due to 
heavy rains and associated issues. 
 
Helping Hands Needed 
-------------------- 
 
¶16. (SBU) SUFRAMA, the free trade zone ("zona franca") authority in 
Manaus, indicated its desire for increased dialogue with Mission 
Brazil.  They want to increase U.S. investment and also educate 
potential investors about how a free trade zone can help them.  The 
list of international companies that already operate there is quite 
impressive, and includes Nokia, Philips, Siemens, Brastemp (a 
Whirlpool subsidiary), and even -- surprisingly -- Harley-Davidson. 
The latter's motorcycles made in the zona franca are only sold in 
Brazil, but still sport the crucial logo and name-brand that 
motorcycle aficionados crave.  That said, operations for these 
companies can cease and move very quickly due to tax incentives 
offered by areas like Sao Paulo. 
 
¶17. (SBU) The U.S. Chamber of Commerce-Amazonas also indicated it 
needs support to maintain its membership and, hopefully, grow.  A 
planned visit from the U.S. Chamber of Commerce-Sao Paulo on April 2 
had to be canceled due to aviation delays and bad weather, and now 
has been tentatively rescheduled for June 5.  They hope that the 
much larger organization in Sao Paulo can essentially take them 
 
BRASILIA 00000759  005 OF 005 
 
 
under their umbrella, and help them with contacts, PR, and support, 
particularly as some of the manufacturing in Manaus has been 
siphoned away to Sao Paulo due to various tax incentives that the 
latter is offering to businesses. 
 
Travel Challenges . . . 
----------------------- 
 
¶18. (U) Flights have gotten better from Manaus to some places. 
Miami now has daily direct flights on TAM and another option with a 
stop in Panama City, on Copa.  That said, domestic travel, just as 
everywhere in Brazil these days, can be problematic and may involve 
one or more stops.  Econoff thus experienced first-hand what visa 
applicants may deal with.  She arrived in Manaus nearly two hours 
late, at 1:30 AM.  The return overnight flight to Brasilia entailed 
a missed connection, two stops, and arrival two hours later than 
scheduled.  Rest on these overnight flights is difficult due to 
frequent take-offs and landings. 
 
. . . But a Very Positive Experience Overall 
-------------------------------------------- 
 
¶19. (U) Manaus may be isolated, but it is warm in more ways than 
just its physical climate.  Econoff found the people there friendly, 
welcoming, and eager for more contact with the U.S. 
 
CHICOLA