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S E C R E T SANTIAGO 000983 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/15/2017 
TAGS: PGOV PREL KDEM KCRM AR BO BR PARM UY VE CI
SUBJECT: A SOUTHERN CONE PERSPECTIVE ON COUNTERING CHAVEZ 
AND REASSERTING U.S. LEADERSHIP 
 
REF: ASUNCION 396 
 
Classified By: AMBASSADOR CRAIG KELLY; Reasons 1.4(b), (d) 
 
 
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Summary 
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¶1. (C) Hugo Chavez,s effort to expand his influence into the 
Southern Cone was the subject of ref A.  This, part two in a 
series of joint cables from Southern Cone embassies, looks at 
ways the U.S. can counter Chavez and reassert U.S. leadership 
in the region.  From posts' perspectives, there are six main 
areas of action for the USG as it seeks to limit Chavez's 
influence: 
 
--Know the enemy:  We have to better understand how Chavez 
thinks and what he intends; 
--Directly engage:  We must reassert our presence in the 
region, and engage broadly, especially with the "non-elites"; 
--Change the political landscape: We should offer a vision of 
hope and back it up with adequately-funded programs; 
--Enhance military relationships: We should continue to 
strengthen ties to those military leaders in the region who 
share our concern over Chavez; 
--Play to our strength:  We must emphasize that democracy, 
and a free trade approach that includes corporate social 
responsibility, provides lasting solutions; 
--Get the message out: Public diplomacy is key; this is a 
battle of ideas and visions.  Septel provides detailed 
suggestions. 
 
¶2. (C) We should neither underestimate Chavez nor lose sight 
of his vulnerabilities.  Many of the region's leaders and 
opnion makers appreciate the importance of relations with the 
U.S. and generally want to see us more deeply engaged.  They 
reject the notion that Chavez best represents the region's 
interests.  We must convince not only government leaders but 
civil society - the person on the street - that we are 
committed to a progressive and democractic vision for the 
Americas and to helping our neighbors meet their challenges. 
If we can, we will make quick inroads into marginalizing 
Chavez' influence, bolster democracy and reassert our own 
leadership in the region.  End Summary. 
 
-------------- 
Know Thy Enemy 
-------------- 
 
¶3.  (S/NF) Notwithstanding his tirades and antics, it would 
be a mistake to dismiss Hugo Chavez as just a clown or old 
school caudillo.  He has a vision, however distorted, and he 
is taking calculated measures to advance it.  To effectively 
counter the threat he represents, we need to know better his 
objectives and how he intends to pursue them.  This requires 
better intelligence in all of our countries.  Embassy 
Asuncion,s getting hold of Chavez's MSP equivalent, for 
example, and then sharing it with policy makers and 
implementers in Washington and the region helps inform and 
coordinate our response. 
 
¶4. (S/NF) When we have concrete intelligence on an issue 
about which our friends in the region share our concern -- 
e.g., Venezuela's relationship with Iran -- we should share 
it to the extent we can.  And when Chavez's programs feed 
local elite appetites for corruption or otherwise fail to 
deliver on their promises, we need to make it known. 
 
--------------- 
Directly Engage 
--------------- 
 
¶5. (SBU) We must challenge the mistaken notion that the U.S. 
is absent and aloof from the region.  President Bush's visit 
to five countries in the region in March, and his follow-on 
meeting with President Lula at Camp David, made a hugely 
positive impression.  A/S Shannon's April visit to Chile and 
Paraguay was similarly applauded by local leaders and the 
press.  We need to build on this good will with a regular 
stream of senior-level visits, including by Cabinet members, 
speaking to our positive agenda for the region and producing 
concrete programs and agreements that respond to its 
 
problems. 
 
¶6.  (SBU) To obtain the greatest return on these visits, we 
encourage Washington to explore multiple-country itineraries. 
 When we make these visits, it is important we be seen not 
just with government officials and elites, but also with 
those who have been marginalized or are on the fringes of 
society.  We need visits not only to those countries where 
leaders praise us, but even more 
importantly where governments have distanced themselves from 
us.  In these places, showing the flag and explaining 
directly to populations our view of democracy and progress 
can change views about the U.S. that may have become 
distorted or out of date. 
 
------------------------------ 
Change the Political Landscape 
------------------------------ 
 
¶7. (C) Chavez' agenda is about expanding his influence and 
power, using the "Bolivarian Revolution" as his vehicle. 
This rubs a lot of the region's governmental and 
non-governmental leaders and opinion makers the wrong way -- 
particularly those who don't want to be associated with his 
methods or regard Chavez as a growing threat to their own 
leadership.  We have to play to that resentment by 
strengthening our ties with these leaders, praising their 
governance, and fostering broad public respect for the 
progressive models they are seeking to build within their 
societies.  Fortunately, local "case studies" of countries 
that are leftist-led but are democratic and fiscally 
responsible offer glistening counterpoints to Chavez's 
retrograde project. 
 
-- Because of its sheer size and economic weight, Brazil has 
outsized influence over the rest of the continent.  In this 
regard, it can be a powerful counterpoint to Chavez's 
project.  We should help present Brazil's course -- i.e., 
pursuit of fiscal responsibility and strong democratic 
institutions, openness to the global the community, and 
mature engagement with both its neighbors and the U.S. -- 
as a progressive and hopeful model for the region. 
 
-- Chile offers another excellent alternative to Chavez.  FM 
Foxley seeks to integrate Chile more fully into the global 
economy.  Chile has not only stated but demonstrated -- e.g. 
Bachelet's letter to House leader Nancy Pelosi expressing 
Chilean support for congressional ratification of FTAs with 
Peru, Colombia, and Panama -- its willingness to help bring 
along other Latin American countries into the global economy. 
 We should look to find other ways to give Chile the lead on 
important initiatives, but without making them look like they 
are our puppets or surrogates. 
 
-- Argentina is more complex, but still presents distinct 
characteristics that should inform our approach to countering 
Chavez's influence there.  Argentina has a large middle class 
and a vibrant civil society open to our ideas and vision of a 
market-based democracy and wary of Chavez's "revolutions." 
Venezuela does not appear to have provided Argentina any 
significant subsidies or outright grants, but Chavez has been 
able to exploit Buenos Aires, lack of access to investment 
capital and international financing.  Domestic and foreign 
investors are not providing adequate long-term investment 
capital to quickly develop needed infrastructure.  And still 
unresolved post-crisis defaults on official Paris Club and 
private bondholder debt are restricting Argentina's access to 
the volume of new sovereign credits in global capital markets 
it would need to fund infrastructure development on its own. 
The obvious counter to the influence that Chavez' financial 
support has bought him in Argentina is to help the GoA regain 
direct access to international financial markets and to work 
with the GoA to develop the kind of investment climate that 
will attract the volume of domestic and foreign investment 
needed to build new foundational infrastructure at 
competitive costs.  This needs to be complemented by engaging 
actively with civil society and key non-economic actors in 
the government on areas of shared concern (anti-crime, 
anti-terror, peacekeeping, etc.). 
 
-- Our growing economic relationship with the pragmatic 
leftist government in Uruguay puts the lie to the claim that 
greater trade and investment with the U.S. is tantamount to 
 
betrayal of local populations.  This is critical because poor 
countries, like Uruguay, are vulnerable not so much to 
Chavez,s ideology but to his petrobolivars.  We need to draw 
attention to and build on these success stories borne out of 
engagement with the U.S., as alternatives to Chavez' vision 
of a region cut off from the U.S.  Even Paraguay's leftist 
priest-turned presidential candidate Fernando Lugo has stated 
he is closer to Bachelet or Lula than to Chavez. 
 
¶8. (C) Of course, we also need to make sure that the truth 
about Chavez -- his hollow vision, his empty promises, his 
dangerous international relationships starting with Iran) -- 
gets out, always exercising careful judgment about where and 
how we take on Chavez directly/publicly.   While it remains 
preferable that we take the high road focusing attention on 
our "vision of hope of hope and prosperity for the region," 
there will continue to be times we need to speak out on the 
concerns his authoritarian bent raises.  However, we 
shouldn't be alone nor necessarily always in the lead. 
Rather the NGO 
community and local civil society groups, the region's 
leaders and international organizations, the UN and OAS in 
particular, must assume a greater role in addressing this 
problem and put Chavez on the defensive -- not by 
exaggerating the threat but speaking to the facts. The recent 
closing of RCTV is one such area where international 
organizations and local media and civil rights groups could 
have been more vocal. 
 
¶9. ( C) With regard to Mercosur, we should not be timid in 
stating that Venezuela's membership will torpedo U.S. 
interest in even considering direct negotiations with the 
trading bloc, and in questioning when and how Mercosur plans 
to apply its democracy clause strictures to Chavez's regime. 
Without voicing hostility to Mercosur per se, we can continue 
to pursue FTA's with interested countries, and encourage 
alterative arrangements, such as Chile,s "Arco del Pacifico" 
initiative. 
 
----------------------------- 
Play to our Mil-Mil Advantage 
----------------------------- 
 
¶10. (C) Southern Cone militaries remain key institutions in 
their respective countries and important allies for the U.S. 
These militaries are generally organized and technically 
competent.  Their desire to maintain interoperability, access 
to U.S. technology and training are something we can turn to 
our advantage.  As they seek to modernize, professionalize, 
and transform, they seek closer relations with the US to 
assist in those processes.  Over the past several years we 
have seen a steady decrease in funds for critical programs 
such as International Military Education and Training (IMET) 
and traditional Commander Activities (TCA) and the 
elimination of other important programs such as Foreign 
Military Financing (FMF) and Excess Defense Articles (EDA) 
due to sanctions under ASPA.  To effectively maintain our 
mil-to-mil relations and guide pol-mil events in the region 
in support of our interests, we must reverse the slide.  Now 
is precisely the time we need to be increasing our pol-mil 
engagement 
and programs vice decreasing and limiting them. We also need 
to revisit some long-held and frankly rigid positions on SOFA 
agreements and insistence on certain privileges and 
immunities with a view to gaining flexibility to negotiate 
new defense cooperation agreements with regional militaries. 
 
¶11. (C) An increasingly unifying theme that completely 
excludes Chavez, and isolates Venezuela among the militaries 
and security forces of the region, is participation in 
international and regional peacekeeping operations.  The 
Southern Cone is doing very well in this area, with all 
countries active contributors to PKO missions worldwide. 
Argentina and Chile have even formed a combined peacekeeping 
brigade, which is expected to be available for deployment 
sometime in 2008.  Uruguay is the highest per-capita 
contributor of PKO troops.  We should make more GPOI funds 
available to Southern Cone countries to increase and 
strengthen their peacekeeping capabilities and cooperation. 
Additionally, we should explore using the mechanism that the 
region's contributors to MINUSTAH (Haiti) have established to 
discuss ways of increasing peacekeeping cooperation on a 
broader scale. 
 
 
-------------------------- 
Stress Our Winning Formula 
-------------------------- 
 
¶12. (C) Chavez has made significant inroads, particularly 
with local populations, by providing programs for the 
underprivileged and by casting the U.S. as elitist and only 
interested in promoting free trade to the benefit of big 
business.  The slogans are facile: Neoliberalism makes the 
rich richer and the poor poorer; the Bolivarian Revolution 
guarantees our region's sovereignty and dignity.  But they 
ring true with some local populations and make others feel 
better about their own lack of progress. 
 
¶13. (C) Transforming our image does not mean we walk away 
from our commitment to free trade and the promise it delivers 
to impoverished populations.  However, it does mean we should 
do a better job of promoting free trade by pointing to local 
and global success stories, making it easier to forge FTAs, 
and by expanding access to U.S. markets, and by promoting 
investment.  Concluding the Doha Round is critical to 
revitalizing more local trade negotiations and bolstering our 
own credibility.  In the meantime, we should support programs 
that promote regional exports, particularly favoring small 
and medium-size enterprises, and emphasize good corporate 
citizenship. 
 
¶14. (C) We must also emphasize social responsibility among 
corporations and investors, and as a USG priority. President 
Bush's March 5 speech about social justice struck a chord 
throughout the region.  We should be seen standing with local 
populations, delivering programs that speak directly to their 
economic and social needs, particularly in the areas of 
health and education.  This is vital not only in the poorer 
countries, but equally in places like Chile and Argentina, 
where our very small community and youth action programs are 
welcomed and receive excellent media attention. 
 
¶15. (C) Projects which foster greater transparency and 
democracy are important; they empower local citizens, 
strengthen democratic institutions, and contribute to a 
foundation for growth. When it comes to programs, there is no 
getting around the fact that we must back up policies with 
more resources to counteract Chavez,s easy walking around 
money, which is making a huge impact in countries like 
Uruguay.  Chavez isn't waging his campaign simply on 
rhetoric.  He is investing millions in his campaign for the 
hearts and minds.  We can use greater discretion and use our 
funds in a more strategic, targeted manner, but we aren't 
going to transform the perception that we are not committed 
seriously to this region by waging our own campaign on the 
cheap. 
 
----------------------- 
Getting the Message Out 
----------------------- 
 
¶16. (U) Public diplomacy will be absolutely vital to our 
success.  We cannot win in the marketplace of ideas unless we 
have active and effective outreach, especially to the young 
and those active in addressing social ills and education 
needs. Embassy Santiago septel addresses many PD areas in 
which we could be more active.  People-to-people contact at 
the grassroots level with local leaders, NGOs, youth groups, 
community activists, and cooperatives is key. 
 
------- 
COMMENT 
------- 
 
¶17. (C) As Chavez seeks to take on the mantle of this 
generation,s Castro, he starts with built-in advantages, not 
the least of which is a whole lot of money.  Add to that the 
bluster of his anti-imperial, anti-U.S. rhetoric, and a 
certain squirrelly charisma, both of which continue to find a 
sympathetic audience in much of Latin America, and he 
presents a formidable foe.  But he certainly can be taken. 
Washington policy-makers have already hit on one sure-fire 
tactic:  Don,t fire back at every provocation, especially 
when it,s clear that Chavez,s mouth has opened before his 
brain has engaged.  His recent dust-ups with both the 
Brazilian and Chilean senates over the RCTV closure are 
 
examples where Chavez,s ranting lost him points with 
ostensible friends without our having to lift a finger. 
 
¶18. (C) But we cannot hope for Chavez,s blunders alone to 
derail him in the Southern Cone.  Hence the package of 
measures we propose:  A more muscular USG presence in the 
region that builds on high-level visits, underscores the 
strengths of viable, successful alternatives (i.e., Brazil 
and Chile) to Chavez,s brand of socialism, targets enhanced 
resources to regions and populations beyond the elites, and 
which uses public diplomacy to make our message loud and 
clear - democracy, freer trade and investment, work and that 
along with that come active and effective programs to address 
social ills and the needs of the region's youthful 
population.  Enough said.  End comment. 
 
KELLY